Editorial 1 : Patent Injustice
Context: Tweaks in drug formulations to extend copyrights is a public health challenge
Biopharmaceuticals
- Biopharmaceuticals are medicines made from living cells, such as yeast and bacteria, as against conventional drugs that are made from chemicals.
- Application: They have revolutionised the treatment of chronic diseases like cancer, diabetes, cardiovascular disease, and serious inflammatory autoimmune diseases.
- Biopharmaceuticals include biologics and biosimilars.
- Biosimilars refer to a biologic that is very similar to the one that has been cleared by the authorities for prescription by doctors. That is why they are also called follow-on biologics.
- They have the same efficacy, are as safe as the reference biologic and are used to treat the same disorders as the first biologic drug.
Indian Biopharmaceutical Sector
- Rapid Growth: Indian biopharmaceutical industry is one of the fastest growing globally and is valued at $60 billion.
- Global Innovation Ranking: India is now ranked 39th in the Global Innovation Index, up from 81 in 2015.
India's Position in the Global Biosimilars Market
- Market Leader
- India is a pioneer in the global biosimilars market.
- It was the first country to approve a biosimilars product for Hepatitis B.
- Today, there are 98 approved biosimilars in India, with at least 50 in the market, the most in any country.
- Many India-made biosimilars have been approved in markets like the US.
- Market Data
- Current Size and Growth Forecast: The Indian biosimilars market was valued at $349 million in 2022 and is estimated to expand at a growth rate of 25.2 per cent per annum from 2022 to 2030 to reach $2,108 million by 2030.
- Global Patent Expirations: By 2030, biologics worth around $170 billion will lose patent protection, presenting an opportunity for Indian biosimilar expansion.
National Biopharma Mission (NBM) and Government Support
- Objective: The National Biopharma Mission, under the Make in India initiative, aims to advance biopharmaceutical development in India.
- Funding and Collaboration
- Investment: A $250 million initiative co-funded by the World Bank.
- Industry-Academia Link: Supports 150 organizations and 300 MSMEs with 21 shared infrastructure facilities.
- Outcomes: The mission has supported over 200 grantees, leading to 18 successful product launches, contributing to long-term healthcare improvements in India.
Patent Evergreening: Barrier to Biosimilars Market Growth
- Patent Purpose: Patents offer a 20-year exclusive market period to encourage R&D investment.
- Evergreening Strategy
- Definition: Extending the exclusivity of drugs through minor modifications or new formulations to delay biosimilar entry.
- Impact Example: Roche extended trastuzumab’s exclusivity by introducing a subcutaneous version when the original patent was near expiration.
- Cost Implications: This practice is estimated to cost the U.S. healthcare system $700 million annually, with similar consequences in other markets.
India’s Legal Framework Against Evergreening
- Section 3(d) of the Patents Act, 1970: Prevents patents for minor modifications without significant technical improvement.
- Example: Novartis' patent for Glivec was rejected due to lack of significant advancement.
- Section 3(e) and 3(i)
- Section 3(e): Restricts patenting mixtures of known compounds unless a synergistic effect is proven.
- Section 3(i): Prevents patents on treatment methods.
- Challenges Despite Regulations: While India’s legal framework curbs evergreening, studies show that around 72% of pharmaceutical patents granted are for secondary modifications, posing a challenge to biosimilar access.
Global Comparison and Potential Solutions
- United States: 74% of new patents are associated with existing drugs and nearly 80 per cent of the top 100 best-selling drugs have received patents, extending their monopoly beyond the initial patent’s duration.
- European Union
- Biosimilar Guidelines: The European Medicines Agency established biosimilar guidelines in 2005, making the approval process more accessible and encouraging biosimilar adoption.
- Successful Adoption: Countries like Germany, the UK, and Nordic nations have achieved substantial cost savings and greater access to biosimilars due to these policies.
Way Forward
- To safeguard public health and promote genuine innovation, India needs to strengthen its patent opposition mechanisms, ensuring that the patent system serves its intended purpose rather than extending monopolies through minor modifications.
- Only then can all patients suffering from serious diseases like cancer, who require biopharma drugs, be assured of access to affordable biosimilars.
Editorial 2 : TOP Crops, price volatility & RBI
Context: Why inflation on prices of tomatoes, onions, and potatoes particularly remains a pain point for RBI
RBI’s Stance on Inflation
- Repo Rate Unchanged: RBI Governor Shaktikanta Das has indicated that reducing the repo rate is not feasible due to persistent inflationary pressures.
- Inflation Rates
- Overall CPI Inflation: As of September, CPI inflation stands at 5.5%.
- Food Inflation: Surging to over 9.2%, driven largely by the rise in vegetable prices.
- Key Concern: Vegetables, with a 36% inflation rate, dominate CPI inflation due to their high weighting in the CPI basket.
Impact of Food Inflation on CPI and RBI's Limitations
- CPI Composition
- Food and beverages account for 45.9% of the CPI, with food alone contributing 39%.
- This is based on data from a 2011-12 survey, which needs updating to reflect current consumption patterns.
- Outdated CPI Weights: A revision based on the 2022-23 survey is overdue, potentially reducing food's weighting by 5-6 percentage points, which could align inflation measures more closely with reality.
- RBI's Record: Despite challenges, RBI has maintained inflation below many emerging markets. For example, India’s inflation in 2024 was 4.4%, compared to the EMDE average of 7.9%.
Rising Food Inflation: Causes
- Vegetable Inflation: Contributed 63% to overall food inflation (CFPI) in September 2024.
- Major drivers
- Tomatoes: Prices surged 42.4% YoY due to a delayed kharif harvest and pest infestations in Karnataka.
- Onions: Prices increased by 66.2%, impacted by storage loss and adverse weather affecting the kharif crop.
- Potatoes: Prices spiked by 65.3% due to a decrease in mandi arrivals and a low base effect from the previous year.
- Structural Issues: These increases reflect inefficiencies in agricultural supply chains and the vulnerability of perishable goods to climate and storage issues.
Existing Agricultural Policy Measures and Shortcomings
- Operation Greens: Launched in 2018 to stabilize prices, initially focused on tomatoes, onions, and potatoes (TOP), but was later expanded to all fruits and vegetables, diluting its impact.
- Post-Harvest Losses: Significant losses, including 18-26% for potatoes, 25% for onions, and 11.6% for tomatoes, continue to drive up prices.
- Export Duties: A recent 40% export duty on onions reflects a reactionary approach rather than a strategic one.
Long-Term Solutions for Reducing Vegetable Inflation
- Value Addition and Processing: The solution lies in processing a portion of TOP crops during surplus periods
- Converting at least 10 to 15% of tomato production into paste and puree.
- Dehydrating onion into products like flakes and powder.
- Example: Jain Irrigation’s onion dehydration partnership with farmers, demonstrate how such initiatives can reduce wastage and boost farmers’ income.
- Specialised Agency: A dedicated agency, staffed with experts focused exclusively on tomatoes, onions, and potatoes is needed.
Way Forward: Without specialised oversight and long-term strategies, RBI will remain in a bind on the repo rate. It needs to press for the long-term strategies with the government as this goes beyond its jurisdiction. Only then RBI can heave a sigh of relief from veggie inflation.