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IBSA: Pro-Western Mindset Hinders India-Brazil Pharma Deals

Ranjit Devraj

NEW DELHI, Jun 15 2011 (IPS) - Cooperation between India and Brazil in pharmaceuticals and medical biotechnology has begun to falter, because Indian authorities would rather collaborate with western counterparts than those in developing countries, new research shows.

As a result, cooperation between the two countries, once touted as capable of solving public health problems in the developing world, has failed to come up with marketable products.

The study by the Research and Information System for Developing Countries (RIS), a publicly funded think tank based in New Delhi, cited as a reason for product failure the lingering perception in concerned Indian ministries and departments that “collaboration with the North (referring to developed countries) is much more valuable than South-South collaboration.”

India lags far behind Brazil and China in the number of papers co-authored with scientists from developing countries, in spite of frequently heard Indian rhetoric over the importance of South-South collaboration.

“India has to put its money where its mouth is in order for collaborations to succeed,” said Sachin Chaturvedi, a senior fellow at RIS who led the study. “This means that key ministries and agencies, especially the Department of Biotechnology, must genuinely ‘de-West’ themselves and start seeing the real potential of South-South collaborations.”

Leena Menghaney, a lawyer working with the Campaign for Access to Essential Medicines of the non- government organisation Médecins Sans Frontieres (Doctors Without Borders) told IPS concerned ministries in both India and Brazil need to build innovative mechanisms to facilitate access and sharing of products and technologies with developing countries.


“Particularly, these two emerging countries must steer away from the disadvantages of the northern intellectual property (IP) system which has traditionally been associated with blocking access not only to medicines and diagnostics but research tools as well,” she said.

The study, which is due for release this week, said India-Brazil collaborations have given Indian pharmaceutical firms increased market access in Brazil, as well as in other Latin American countries. The Brazilian market alone is expected to reach a value of 18.3 billion dollars by 2012.

A significant impact of the India-Brazil health biotech collaboration has been increased availability of cost-effective health products. Indian biotech firms have proven their abilities in process innovation, lowering the prices of such products as the vaccine against Hepatitis B.

Brazilian firms could also contribute cost-effective health products to the Indian market, given proper official support. In Brazil, for example, diagnostic kits for AIDS and leishmaniasis (a disease caused by a parasite spread by sand flies) are available at prices 30 to 40 percent lower than in India.

“Research collaboration has the potential to make these technologies available to the public in a way that would increase accessibility through affordability,” said Chaturvedi, adding however that poor product development was denying the public such benefits.

For instance, a leishmaniasis kit, ready in 2003 with the technology transferred to the Brazilian Centro de Produção e Pesquisa de Imunobiológicos (CPPI or Centre for Research in Immunological Products) in Parana State, is only now being adapted in India. A tuberculosis diagnostic kit developed in Brazil has also met a similar fate.

A joint team from the CPPI and the Jamnalal Bajaj Tropical Disease Research Centre (JBTDRC) at the Mahatma Gandhi Institute of Medical Sciences at Sevagram in India is now working to produce TB and leishmaniasis kits suited for India.

The RIS study said the driving force behind successful joint venture deals between Indian and Brazilian pharmaceutical firms has been a desire to tap the large Latin American markets.

“India’s success has depended on an ability to provide high quality drugs and intermediates at cost- effective prices,” Chaturvedi said. “The focus for now is on importation and marketing in Brazil, although research and development are on the cards for the future.”

Indian participation in Brazil began in 1997 when then Brazilian health minister Jose Serra invited Indian companies to invest in his country and use it as a production hub for pharmaceuticals rather than as a mere export destination.

Ten years later, however, Brazil increased import duties on pharmaceutical products, making it difficult for Indian firms to rely solely on exporting their products to Brazil, pushing them to set up local operations or go into collaborations.

Yet, Indian pharmaceuticals in Brazil have expanded over the last decade. In 1999, India’s pharmaceutical exports to Brazil were worth seven million dollars, but by the end of the decade, the figure had grown to 115 million dollars.

Items exported by India to Brazil include antibiotics, vitamins, corticosteroids, vaccines, reagents and surgical instruments.

Brazil accounts for roughly three percent of India’s total pharmaceutical exports, which in 2010 stood at nine billion dollars. India is the world’s fourth largest exporter in terms of volume.

The RIS study quoted an Indian entrepreneur saying that collaborations with Brazil were catalysed by the promulgation of Brazilian rules promoting the manufacture of generics.

Indian entrepreneurs employed a variety of strategies to penetrate the Brazilian market, ranging from setting up manufacturing plants to forging joint venture alliances, and pursuing acquisitions and mergers.

For example, the Indian company Glenmark acquired the Brazilian firm Laboratories Klinger in 2004, and set up a subsidiary in Brazil. Indian companies with subsidiaries in Brazil include Cellopharm, one of the fastest growing firms in the generics field with business valued at 98 million dollars.

India-Brazil entrepreneurial linkages cover various high-tech areas. Brazil, for example, has emerged as a major centre for organ transplants requiring immunosuppressant drugs which Indian companies like Biocon have readily supplied.

India and Brazil became natural partners in the healthcare and pharmaceutical sector, especially when multinational companies all but abandoned research for newer drugs for TB and malaria pandemics.

To be truly meaningful, Menghaney said, collaboration between India and Brazil must, in addition to generics, take on the production of drugs against infectious diseases urgently needed in developing countries.

 
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