When President Joe Biden announced last month that the United States was waiving vaccine patents temporarily in response to the Covid-19 pandemic, it was first seen as a major boost to the battle against the coronavirus worldwide.
However, the hard reality quickly set in that it is not enough to just waive patent rights, the major bottleneck is technology transfer to countries that have the infrastructure in place for vaccine manufacturing, like Bangladesh, India, Thailand in our neighbourhood.
For countries like Nepal which do not even have that capability, news of the US patent waiver made sense only insofar as the help it could provide for India’s manufacturers to boost production, and develop new vaccines to keep up with the emergence of new strains.
By itself, Nepal’s pharmaceutical industry – despite all the strides it has taken in the past decade -- lacks the ability to benefit from any future patent waivers or technology transfer on vaccines.
The pharmaceutical industry in Nepal has yet to show innovation, or the ability to undertake research and development of drugs and interventions that the country needs.
There are about 100 pharmaceutical manufacturers in the country, and they are all competing with each other to produce only generic drugs, whose dosage form and formulation have been in the public domain for years.
Even before the Covid-19 pandemic, none of these industries were producing the kinds of vaccines that Nepal needs the most: for example, against measles, typhoid, diphtheria, tetanus and pertussis, rabies, or even an emergency life-saving product like snake antivenom.
The reason Nepal’s pharmaceutical industry sector limits itself to generic manufacturing is purely due to the lack of investment in research and development. A brand name medicine comes in the market after years of innovation, pre-clinical studies and clinical trials of the novel dosage form of the drug molecule.
The world’s big pharmaceutical companies recoup their investment in research and development through patented sales. Some spend as much as 20% of their revenue on researching new drugs.
When the exemption period for any particular brand lapses, other industries can make a copy of the generic drug and offer it at significantly lower prices, since clinical findings are already established, and there is no need to emulate costly trials.
India is the largest manufacturer of generic drugs in the world and supplies them to the US and Europe, with 2% of the global export market share. However, India is now going into manufacturing branded medicines as well in collaboration with multinational companies, and in so doing, gains technological knowhow. Bharat Biotech’s development of its own Covid-19 vaccine brand COVAXIN is an example of innovation.
Nepal is ideally placed to be a base for the production and export of pharmaceutical drugs and vaccines. With 30 million population, it is not a ‘small’ country and has a sizeable domestic market. The total turnover of Nepal’s pharmaceutical sector is Rs55 billion a year, and medicines make up more than half of the out-of-pocket spending of Nepalis.
But with the right policies for foreign direct investment (FDI) it can also be a base for exports for companies collaborating with international pharmaceutical companies. Right next door, China and India are prime examples of what can be achieved with FDI technology transfer. Nepal’s biennial investment summits have yet to seriously offer the pharmaceutical sector as being a priority for FDI.
