Indian patent law changes will benefit Pharma multinationals

All major pharmaceutical companies that have operations in India are likely to benefit from the latest decision made by the Commerce Ministry in that country, note analysts at Zacks Equity Research. The Ministry accepted the Mashelkar committee's report, according to which India will continue to allow patents on incremental innovations if the enhancements are beneficial to patients. The decision was taken amidst severe protests from generic players and health activists who fear this will not allow cheaper generic drugs to enter the market.

On the basis of 2008 sales figures, the Indian pharmaceutical market ranks 13th in the world, with sales of $7.7 billion last year (an increase of 4% over 2007). The rapidly growing middle income group with higher disposable income makes it an attractive place for major pharmaceutical companies. The pharmaceutical market is expected to grow at 12.3% through 2014 surpassing many other economies in the emerging markets.

Many of these factors have led pharma majors to target the Indian market in a big way. Almost all international names, including GlaxoSmithKline, Pfizer, Sanofi-Aventis,  Wyeth Merck & Co have strong presences in the country.