ICA: Marketing Ethics: India’s Bitter Pill India’s Supreme Court delivered what
ID: 381967 • Letter: I
Question
ICA: Marketing Ethics: India’s Bitter Pill
India’s Supreme Court delivered what might be the final nail in the coffin of pharmaceutical innovation in India by rejecting Novaritis’ attempt to win patent protection for a potentially life-saving drug. The ruling comes after more than six years of legal battles. Other multinational pharmaceutical companies have suffered setbacks related to patents as well. Bayer’s patent for its expensive cancer drug was revoked after being challenged by an Indian generic drug manufacturer, and Bayer was even ordered to issue a license to the Indian company so it could copy Bayer’s drug and sell it for one-thirtieth the price Bayer charged. Roche also had a patent revoked after challenges from local companies and health organizations. India reluctantly agreed to offer patent protection after joining the World Trade Organization in 1995, but it seems reluctant to grant or maintain patent protection to multinational pharmaceutical firms. India is a fast-growing market, with its pharmaceuticals demand expected to reach almost $50 billion by 2020, an increase from its current $11 billion. However, this market is dominated by low-cost Indian generic drug producers, and India’s government seems bent on protecting that industry. The Supreme Court ruling was praised by public-health advocacy groups, such as Medicins Sans Frontieres (MSF), who see this as a way to get low-cost drugs in India and other developing nations, since India is the largest supplier of low-cost HIV and other drugs to these nations. Novaritis’ drug, Glivec, costs almost $2,000 per month compared with $200 per month for comparable generic versions in India, which didn’t help the company’s case. However, the company claims that 95 percent of 16,000 patients taking Glivec in India receive it free of charge through a company support program.
Should pharmaceutical companies be granted patents in less developed countries? Debate both sides of this issue by providing two arguments in favor and two in opposition..
Discuss another example of multinational companies having difficulty expanding into India (be specific with details about the difficulty faced).
Explanation / Answer
1 - The Patents are the proprietary and exclusive rights given by the sovereign state to an individual or a company for a limited period of time in exchange for detailed public discloser. The Pharma companies should be given right to get a patent even in the less developed country, but with a condition. Let us see two each why it should be given and why not.
In Favour of patent
Against granting Patent
2 - Entering in India for business includes lots of red tapes, where many permissions from the regulatory authority and government departments are needed. There are many companies who have faced issues entering the Indian market due to such red tape, some left the business as it is and even some were left bankrupt.
The recent case of General Motors leaving the Indian market is the biggest talk of the market. The GM although has a huge manufacturing plant in India and yet exports, it has shut its half the business. This is due to the localization of the product and the price-sensitive Indian market. The Indian consumer is a very price sensitive consumer plus the various complex tax structure in India makes it difficult to earn profit from the Indian market. Plus the red tap involved in taking various permissions which mostly used to get delayed. this factors forced GM to shut is a business in India.