According to the Canadian analyst Veronika Litinski many sizeable biotechnology companies attending the Bio.org conference held in Boston in May 2007 have plans for entering India and China. Both India and China are attractive for biotechnology players because of their large markets, high number of science graduates and low labour costs.
Both the Chinese and the Indian governments are keen to promote biotechnology. Since 2000 the Indian government, together with the private sector, has provided seed funding for biotechnology start-ups and in 2005 drew up a strategy to provide tax concessions, industrial grants and motivate greater patenting and foreign investment. The aim of the policy is to achieve an annual turnover of US$ 5 billion by 2010, reaching annual sales of $25 billion in 2015. Similarly since 2006 the Chinese government has given biotechnology startups priority status for bank loans and grants as well as research and development tax breaks. In May 2007 the Chinese government announced its first five year plan for biotechnology, with the aim of achieving a revenue of 500 billion yuan (US$65 billion) by 2010 and 2 trillion yuan by 2020.
The biotechnology industry is growing in both places. In 2004 the Chinese government reported that its biological product market (gene engineering drugs, vaccines, antibodies, and blood products) was $2.5 billion and was growing 13% a year. Statistics from the Indian government showed that the Indian biotechnology industry grew by 39 percent between 2003 and 2004 to a value of $705 million, and the total investment in the sector had increased by 26 percent to $137 million. In 2006 the Indian Department of Biotechnology indicated that the country’s annual sales for its biotechnology industry was $1.5 billion and that between 2005 and 2006 the total revenue rose by 37.5%. Approximately 70% of this revenue came from biopharmaceuticals.
Despite increasing government promotion of biotechnology and some growth of the industry, biotechnology patenting remains modest in India and China. Silico’s analysis of patents from the OECD (which covers patents from the EPO, JPO and USPTO) in classes 424, 435, 514, 530 and 536 (drugs, molecular biology and microbiology, natural resins or derivatives and organic compounds) indicates that the number of patents filed by Indian and Chinese inventors rose in the years between 1999 and 2005. In India the number increased from 42 in 1999 to 93 in 2005, an rise of 97%. The number in China jumped 121% from 14 to 28. The overall number of patents for India and China, however, remains tiny by comparison with those for the United Kingdom and the USA, which in the same years saw a decline in their patents. The number of patents for the United Kingdom dropped 42% from 583 in 1999 to 339 in 2005, and 39% in the USA from 7788 to 4710.
Silico’s analysis of patents filed (in classes 210, 264, 424, 435, 514, 530, 536, 549, 800) at the USPTO reveals that 60% of the total 746 patents filed Indian resident inventors were assigned to government or research institutions. Of these 51% (n=383) were assigned to the government’s body the Council of Scientific and Industrial Research (CSIR). Biopharmaceutical generic manufacturers were assigned 131 (18%) of the patents. Patents assigned to the generics pharmaceutical company Dr Reddy’s constituted the next largest proportion after CSIR totaling 31 (4%). Closely following were Dabur Research Foundation, part of the multinational Dabur Group, with 29 patents and the generics pharmaceutical company Ranbaxy Laboratories with 28 patents. Very few biotechnology companies were assigned patents. Panacea Biotec had 15 patents (2%) and Biocon 9 (1%).
Government and research institutes were assigned fewer patents in the case of China, accounting for 68 (28%) of the 228 patents filed by Chinese resident inventors at the USPTO. Of these 34 patents (15%) were assigned to the government bodies the Chinese Academy of Science and Chinese Academy of Medical Sciences, and 32 (14%) to universities (Chinese University of Hong Kong, 11 patents; Tsinghua University, 7 patents; Hong Kong Polytechnic University, 5 patents; Fudan University, 4 patents; Peking University, 3 patents, and Beijing Medical University, 2 patents). The companies assigned patents in this space included China’s largest gene sequencing company Shanghai Bio Road Gene Development Ltd (6 patents) founded in 1998; the generic pharmaceuticals companies GenMont Biotech Inc (4 patents), Shanghai Bio Road Gene Development Ltd (4 patents), Jiangsu Kanion Pharmaceutical Co Ltd (3 patents), Nanning Maple Leaf Pharmaceutical Co Ltd, part of Wex Pharmaceuticals (3 patents) and Hong Kong based Bright Future Pharmaceutical Laboratories Limited (3 patents); and the Beijing based genomics company CapitalBio Corporation (3 patents).
There are distinctive patterns for the types of patent filed at the USPTO by Indian and Chinese resident inventors. Patent abstracts containing the word “pharmaceutical” were more prominent among patents filed by Indian resident inventors (n=167, 22%) than Chinese ones (n=33, 15%), as were patent abstracts containing the word “diabetes” which were (n=44) 5% for Indian inventors. The high number of diabetes associated patents for Indian resident inventors may reflect the country’s growing diabetic epidemic. In 2005 the World Health Organization (WHO) estimated India had the highest number of diabetic suffers worldwide, with 33 million people. None of the patent abstracts registered by Chinese based inventors had the word “diabetes”, which is surprising given that China came second after India in the WHO statistics for 2005, with 23 million diabetic suffers. The USA ranked third after India and China with 18 million diabetic sufferers.
The word “DNA” was more common in patent abstracts filed by Chinese inventors (n=32, 14%) than among Indian ones (n=14, 2%). Both countries had very few patent abstracts containing the words “HIV” or “obesity”. China had proportionately slightly more patent abstracts with the word “vaccine” (n=5, 2%) and “cancer” (n=9, 4%) than India where it was 1% for “vaccine” (n=9) and 2% (n=18) for “cancer”.
If patenting is taken as measure of innovation, India and China seem to have some way to go to catch up with other countries such as the USA and Britain in the commercialisation of new innovative biotechnology products and become worldwide biotechnology players.