[Ip-health] GSK invests in China -- notwithstanding industry concerns over IP rules

Fri Dec 14 15:47:17 2007

It also reanswers the question of whether domestic IP regimes in
developing countries offers any needed additional incentive to R&D there
because, as is implied but not quite stated here, whatever monopoly Glaxo
(or any other Chinese "inventor") might or might not get in China, it
still has the full range of monopoly offered by the developing countries.
China's failure, or refusal, to offer IP doesn't subtract one whit of IP
any Chinese entity will still get in developed markets.

Thus not only is it a fallacy that developing countries need IP to attract
investment, but it remains a fallacy that residents of developing
countries have no incentive to invent without IP--because they still have
the right to get patents in any developed regime in which they decide to
apply.

Thus the only function IP serves in developing countries is as a drain on
their economies without either attracting investment nor motivating R&D.

Mickey

> In case anyone needs it, here is further evidence that domestic
> intellectual property regimes in developing countries have very little
> if any correlation with, or connection to, brand-name pharmaceutical
> companies' investment location decisions.
>
> Today, the Financial Times reports on a decision by GlaxoSmithKline to
> invest $100 million in pharmaceutical R&D in China. Not in production,
> but in R&D. "Within five to ten years we will be moving from 'made in
> China' to 'discovered in China'," the company's chair of R&D told the
> Financial Times. The FT reports that the GSK move follows similar R&D
> investment decisions by Roche, Novartis, AstraZeneca, NovoNordisk and
> Sanofi-Aventis.
>
> This story comes two days after USTR issued a Congressionally mandated
> report on Chinese compliance with WTO obligations. USTR alleges a host
> of IP transgressions by China -- and the United States has filed a case
> against China at the WTO, arguing that nonenforcement of IP rules
> violates WTO rules -- and details as well some specific
> pharmaceutical-related concerns.
>
> Somehow, Big Pharma isn't letting these enforcement concerns interfere
> with its investment decisions.
>
> That is because, the enormous propaganda by Pharma and its allies
> notwithstanding, the industry undertakes R&D with an eye to the global
> market. New drugs invented in China are going to be sold primarily in
> the rich countries, just like new drugs invented in New Jersey. Whether
> China offers all of the monopoly protections Pharma craves is not
> relevant to the decision about where a company will locate R&D
> facilities (or production facilities, for that matter).
>
> A link to the USTR report is available here:
>
> http://www.ustr.gov/Document_Library/Press_Releases/2007/December/USTR_Re=
leases_2007_Report_to_Congress_on_Chinas_WTO_Compliance.html
>
> Here is the key pharmaceuticals-related excerpt (page 81)
>
> In the pharmaceuticals sector, the United States continues to have a
> range of concerns. The United States has urged China to provide greater
> protection against unfair commercial use of undisclosed test and other
> data submitted by foreign pharmaceuticals companies seeking marketing
> approval for their products. The United States has also encouraged China
> to undertake a more robust system of patent linkage and to consider the
> adoption of a system of patent term restoration. In addition, built-in
> delays in China=92s marketing approval system for pharmaceuticals continu=
e
> to create incentives for counterfeiting, as does China=92s inadequate
> regulatory oversight of the production of active pharmaceutical
> ingredients by domestic chemical manufacturers. In 2007, as in prior
> years, the United States sought to address all of these issues as part
> of its broader effort to work with China to improve China=92s regulatory
> regime for the pharmaceuticals sector.
>
> The Financial Times story follows below.
>
> Robert Weissman
> Essential Action
> rob@essential.org
>
> ----------------------------
>
>
> http://www.ft.com/cms/s/0/53ba9ea4-a91d-11dc-ad9e-0000779fd2ac.html?nclic=
k_check=3D1
>
> GSK to spend $100m on R&D in China
>
> By Andrew Jack in London
>
> Published: December 13 2007 02:00 | Last updated: December 13 2007 02:00
>
> GlaxoSmithKline, the UK-based pharmaceutical company, plans to channel
> $100m by the end of next year into a neuroscience research centre in
> China which will become pivotal to its global drug development.
>
> Ahead of GSK's first presentation focused on its emerging neuroscience
> pipeline drugs which takes place today, Moncef Slaoui, the chairman of
> research and development, has said the company will build a centre in
> Shanghai responsible for all the company's work on neurodegenerative
> diseases.
>
> These include Alzheimer's, Parkinson's disease and multiple sclerosis.
>
> "For us, China is not about outsourcing and cheap labour," he told the
> Financial Times.
>
> "We don't want to give them the crumbs. It's about different science. We
> will link our fate to their fate. Within five to ten years we will be
> moving from 'made in China' to 'discovered in China'."
>
> The investment by GSK marks the latest move by a large western
> pharmaceutical company into the country not just for low-cost
> manufacturing, clinical trials and the growing sale of medicines, but
> also to tap into its fast-expanding scientific research base.
>
> Roche, Novartis, AstraZeneca, NovoNordisk and Sanofi-Aventis are all
> investing in research and development in China, with the majority
> concentrated in Shanghai.
>
> The GSK decision comes after six months of research around the world,
> co-ordinated by Mr Slaoui and designed to identify "the next seedbed for
> future discoveries".
>
> He said that "qualitatively and numerically, China came out on top",
> especially in oncology and neurology.
>
> His evaluation was based on the fact that there are an estimated 63,000
> holders of scientific doctorates in China, including 35,000 who trained
> in the west and have returned in recent years to their home country, as
> well as on publications in journals such as Science, Cell and Neuron.
>
> GSK has a centre in the Pudong district of Shanghai, which will be moved
> to provide the basis for the new centre. It aims to hire 1,000
> scientists within six years, making it a leading part of the group's
> expanding Centre of Excellence for Drug Discovery for neuroscience,
> itself one of four therapy areas on which Mr Slaoui plans to concentrate.
>
> Neuroscience centres will continue to operate in Harlow in the UK for
> neuroplasticity to treat pain, cognition and epilepsy; and in Verona,
> Italy, for psychiatry, covering depression and anxiety.
>
> In a research note yesterday, HSBC maintained its GSK rating as
> "underweight", estimating the company would be able to provide positive
> data on half of its 12 neuroscience experimental drugs in early stage
> proof of principle trials.
>
> Copyright The Financial Times Limited 2007
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Mickey Davis
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