Once wedded to patent, the government should take all steps to ensure that holder’s rights are fully protected In recent times, MNC pharmaceutical companies have approached Indian courts seeking to prevent regulatory authorities from granting market approval to generic companies for drugs they hold patent. Thus far, the courts have acted in a denial mode. In the 2010 Bayer-Cipla case, a division bench of the Delhi High Court had refused to ask the government to link the patent status of a drug to grant of market approval for generic version. Recently, US drug giant Merck Sharp & Dohme petitioned the court to restrain an Indian firm Glenmark from making and selling anti-diabetes drugs which violated its patents in India. Like...
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Articles
Don’t kill the goose that lays golden eggs
Though TRIPS allows patent laws to take care of public interest, this should not be pushed to a point whereby the very incentive to innovate is stifled The Supreme Court verdict in the Glivec case – the cancer treatment drug for which the Swiss major Novartis had sought a patent – has generated an air of exuberance amongst the ‘generic’ producers. It is good news for lakhs of patients who will have access to this drug at a fraction of the treatment cost offered by Novartis (already some generic companies are offering at one-tenth; this will go down further). Millions of patients in other parts of the developing world, especially Africa, also have reasons to rejoice even as Indian companies...
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Why bail out private power producers?
In his address at the CII AGM, Rahul Gandhi exhorted the powers-that-be to listen to the voice of a billion people. Clearly, he meant that that the ruling dispensation had thus far not listened seriously enough. Even before his exhortation could die down, the establishment has come out with a decision that ignores people’s concerns and can have the effect of further impoverishing them. FLOODGATES OPENED The Central Electricity Regulatory Commission (CERC) has allowed a ‘compensatory tariff’ for Adani Power Ltd’s (APL) imported-coal-based power project in Mundra, Gujarat. This has been done to neutralise the increase in price of imported coal following the decision of the Indonesian Government in September 2010 to impose a minimum ‘benchmark’ price below which coal...
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Don’t play around with gas allocation
The woes of the fertiliser industry do not appear to be showing any signs of easing. Already battered by the financial squeeze, due to grossly inadequate Budget allocation, it may now face a huge shortage of gas. Gas is a ‘clean’ and ‘environment-friendly’ fuel. It is the most preferred feedstock for production of fertilisers. About 80 per cent of production capacity for urea in India is based on gas (balance 20 per cent on naphtha and fuel oil). Gas being a resource of national importance, the Central government allocates available gas to various sectors — fertilisers, power, petrochemicals, sponge iron, and household consumption. Historically, this job was performed by the Gas Linkage Committee (GLC) — an inter-ministerial platform chaired by...
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A fertiliser plant closing near you
After netting the carryover subsidy from FY13, just Rs.30,000 crore is left in FY14 for fertiliser subsidies Finance minister P Chidambaram has achieved a fiscal deficit of 5.2% of GDP for 2012-13, thereby redeeming government’s commitment to contain it within the 5.3% target—though the latter, by itself, is higher than the 5.1% provided for by Pranab Mukherjee in the last Budget. Further, true to exhortations he made during his road-shows to demonstrate that India is serious about fiscal consolidation, he has budgeted the deficit at 4.8% during 2013-14. He also intends to reduce it to 3% by 2016-17. The achievement is more fortuitous rather than being a result of credible efforts made on ground zero. A substantial compression in Plan...
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No effort to rein in subsidies
In the Budget for 2012-13, then Finance Minister Pranab Mukherjee had targeted fiscal deficit at 5.1 per cent of GDP, which was subsequently revised to 5.3 per cent. P. Chidambaram has delivered; the revised estimate is 5.2 per cent. For 2013-14, he is aiming at 4.8 per cent. However, the Government has failed to deliver on its commitment to rein in subsidies. Subsidies on fuel, fertilisers and food were budgeted at 1.9 per cent of GDP. The revised estimate is 2.26 per cent. Budget estimate for 2013-14 is even higher at 2.3 per cent. Juxtapose this with Pranab Mukherjee’s exhortation that subsidies will be reduced progressively to 1.75 per cent within three years. Far from that, subsidies are rising. This...
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Price controls and fiscal cliffs
The department of fertilisers (DoF) is working on an arrangement with a consortium of PSBs for a loan amounting to R25,000 crore to pay outstanding fertiliser subsidy dues to the manufacturers. Urea manufacturers receive subsidy under the new pricing scheme (NPS) to cover the differential between the cost of production and distribution, and maximum retail price controlled at a low level. DAP and complex fertiliser manufacturers receive subsidies under the nutrient-based scheme (NBS)—a ‘fixed’ amount linked to nutrient content, viz nitrogen, phosphate and potash. The budget for 2012-13 provided for an allocation of around R60,000 crore towards fertiliser subsidies. These funds were exhausted in the first 4 months of the current fiscal. DoF needs an additional Rs 40,000 crore to...
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Urea pricing – Government must walk the talk
About six months back, the Committee of Secretaries (CoS) had recommended that the MRP of urea be raised by 10 per cent. However, this was stoutly opposed by the Fertiliser Minister. Even the Agriculture Minister, who is Chairman of the Group of Ministers on urea pricing and other related issues, is not favourably disposed towards this proposal. However, Prime Minister Dr Manmohan Singh is keen to accept the CoS recommendation. Having taken some baby steps (diesel price, etc), he would like to do more to bolster the reform credentials of the UPA Government. POLICY STEPS For close to five decades, the Government has kept urea under pricing and distribution control. In the 1950s and 60s, it operated a Central Fertiliser...
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Can’t do gas pricing in a vacuum
Barely a few months after the news of allowing RIL to increase the price by 3.5 times the current level on the supplies from its KG fields, the spectre of a steep hike has come to haunt users again. A committee under C Rangarajan, mandated to suggest the design of future contracts for exploration and production of oil and gas, has also recommended a basis/formula to price domestically produced gas. It has suggested price to be benchmarked to four series of international prices, viz Henry Hub (HH) in the US, National Balancing Point (NBC) in the UK, netback prices of sources of LNG supply for Japan, and netback price of Indian imports of LNG at well head of exporting countries....
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Crippling effects of oil subsidies
A lesser known aspect of the much talked about oil subsidies is the unprecedented ‘liquidity crunch’ that oil PSUs viz., IOC, HPCL and BPCL, face perennially. Subsidies are administered through these undertakings. Under instructions from the Government, these PSUs sell kerosene, LPG and diesel at low prices (prior to June 2010, price of petrol was also regulated). How is the excess of cost over selling price covered? Oil and gas PSUs contribute 40 per cent of differential amount by way of discount on crude supplies. The Government is supposed to reimburse 60 per cent as subsidy. However, it rarely meets its commitment in full! RISING UNDER-RECOVERIES Thus, during the first nine months of 2012-13 fiscal (April-December 2012), these PSUs had...
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