The ministry's proposal, ironically, is totally inconsistent with even the American patent laws (The Bolar Waxman Convention). These laws permit the manufacture and sale of patented substances, by other drug firms, for R&D purposes only, during the patent life of the drug.

It further permits such companies to market the product concerned (using materials purchased during the patent life of a drug) for commercial purposes as soon as the drug is off patent.

"When American laws accept an abbreviated new drug application (ANDA) prior to the date of patent expiry (but effective only on the date of patent expiry),it is baffling why the ministry is trying to stifle such Indian drug exports. It is becoming increasingly difficult to believe that external pressures have no hand in these proposals," sources say.

Analysts say that the move, if it fructifies, may cast doubts on the long-term viability of a host of Indian drug firms who supply such substances to firms in the US for say bioequivalence studies, testing etc. "It may also force re-location of such operations to other countries which allow such R&D-based activity during the patent life of a drug," he added. Certain European healthcare firms have even moved out to nations which permit such work, they claim.

The proposed move would, in effect, block exports of a host of drugs like atorvastatin, valcylovir, celecoxib etc for reserach and development purposes in the US and some other drug markets.

Sources also add that the DTAB which could decide on such key issues of exports, has scant industry representation. Key members include an ex-official from the CentralDrug Research Institute (CDRI) and a management official of mid-sized Mumbai-based pharmaceutical firm, besides the Drugs Controller General of India (DCGI).

The latest thinking comes atop an already existing "unwritten ban" imposed by the health ministry in the second half of 1998 on exports of new drug molecules not registerd in India. Exports of new drug molecules, estimated to be worth Rs 100 crores, have been affected following the imposition this bar. New drug molecules like sildenafil citrate (for erectile dysfunction), celecoxib (for arthritis), trovafloxacin (an anti-bacterial) have all been hit following this diktat.

"Take the case of doxazosin mesylate made locally but not allowed for export, even when it is well-known in industry that the orginal patent holder is unlikely to market the drug in India. The government does not seem to be interested in forex," an industry observer said.

The domestic industry has, all along, alleged that the ministry's move smacks of multinational pressure andhas no legal sanctity. Besides, industry says that such exports had been permitted for the past 20 years and that an absence of a specific provision in the Drugs and Cosmetics Act can in no way merit a ban. Such exports had, in the past, been permitted when supported by a no-objection certificate (NOC) from the DCGI.

Revamp seen in local industry

The ministry proposal to debar export of new molecules covered under international patents is strange. The issue is not merely losing a few million dollars in exports and research being done in countries which would allow exports of new molecules covered under international patents. What needs to be answered is if India requires a strong bulk drug industry which can also serve the generics market once the drug is off patent. Such a policy, which is akin to putting a non-tariff barrier in India, may lead to another round of restructuring of the local bulk drug industry. Around the same time, foreign players may also shelve plans of setting up shop here forproduction of new molecules.