Technology transfer in the pharmaceutical industry involves sharing knowledge, skills, documents and technical know-how. It occurs between groups like research labs and factories or between companies. In India, this process has made the country a major producer of affordable generic drugs. The pharmaceutical market in India is worth over $40 billion. It exports to more than 200 countries. Technology transfer helps Indian companies produce low-cost medicines while meeting global standards. It improves production and fills gaps in innovation. It also enables partnerships with big international companies. Before 2005, the patent law in India allowed companies to copy foreign drugs which helped them learn new technologies and produce cheap generics. In 2005, India joined the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. This led to formal methods like licensing and partnerships. As a result, exports increased and India’s research efforts strengthened. India is now a key player in global healthcare.
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How Technology Transfer Evolved in India
India’s pharmaceutical industry began focusing on technology transfer in the 1970s. The goal was to achieve self-reliance. The Patents Act of 1970 allowed patents only for drug production methods. It did not cover the drugs themselves. This enabled Indian companies to replicate foreign drugs quickly. Often, they did this in just months.
In the 1980s and 1990s, new economic policies emerged. These policies permitted more foreign investment and they also reduced price controls and as a result, partnerships with global companies increased. Indian firms like Ranbaxy and Dr. Reddy’s leveraged these changes. They built their research capabilities and exported generics. However, foreign investment remained low and concerns about IP protection persisted.
In 2005, India adopted Trade Related Aspects of Intellectual Property Rights (TRIPS) which required stronger patent law. Drug products now received 20-year protections. Indian companies shifted toward original research. They also pursued formal technology transfer through licensing deals. Today, leading Indian firms invest 8-10% of their sales in research. Government initiatives, like the Production Linked Incentive (PLI) scheme, promote advanced manufacturing. They do this by introducing new technology.
Laws Governing Technology Transfer
India has several laws and policies to regulate technology transfer in the pharmaceutical industry. These laws protect intellectual property, ensure fair contracts and maintain quality standards. Given below is a breakdown:
Patents Act, 1970 (updated 2005): Patent Act, 1970 aligns with TRIPS. It allows patents for drug products. Before 2005, only processes were patented which helped companies copy drugs. Now, patents can be licensed or transferred. Rules exist for compulsory licensing during public health emergencies, like for AIDS or tuberculosis drugs. The law prevents unfair patent extensions.
Drugs and Cosmetics Act, 1940 and Rules, 1945: The Central Drugs Standard Control Organization (CDSCO) manages these laws. They regulate drug production, import and sales. Technology transfer must follow Good Manufacturing Practices (GMP). GMP includes rules for testing, equipment and quality. Contract manufacturing requires licenses for each drug and facility.
Indian Contract Act, 1872: Indian Contract Act, 1872 ensures technology transfer agreements are valid. It covers terms like offers, payments and breaches of contract.
Copyright Act, 1957 and Trademarks Act, 1999: Both of these laws protect software, drug formulas, brands and trade secrets used in technology transfer.
Competition Act, 2002: The Competition Commission of India (CCI) oversees this law. It prevents unfair practices in licensing deals. This keeps terms fair.
Foreign Direct Investment (FDI) Policy: The Department for Promotion of Industry and Internal Trade (DPIIT) manages this policy. It allows 100% foreign investment in new projects. For existing projects, 74% is permitted. This encourages global companies to share technology.
Drug Price Control Order (DPCO), 2013: This sets price limits for essential drugs. It affects payments in technology transfer deals.
Export Control Regulations: The Directorate General of Foreign Trade (DGFT) oversees these rules. They limit exports of sensitive technologies, including some pharmaceutical innovations.
WHO Guidelines: India follows World Health Organization guidelines for technology transfer. These focus on quality and proper testing.
Know about the Trademark Registration Cost in India.
How Technology Transfer Works
Technology transfer in India’s pharmaceutical industry ensures high-quality drugs and regulatory compliance. The Indian Pharmaceutical Alliance (IPA) outlines six major steps:
Evaluation and Decision: Assess if the transfer is feasible. Plan for quality and production scale-up. Create feasibility reports.
Planning: Form teams from research, quality and regulatory groups. Develop a transfer plan.
Preparation: Share knowledge about product details, such as materials and processes. Assess risks. Prepare reports and lists of critical attributes.
Execution: Produce test batches, validate processes to ensure quality and Maintain records of batches and validation.
Assessment: Review results. Test product stability. Address any issues. Write summary reports.
Closure and Post-Transfer: Confirm the transfer’s success. Monitor ongoing production. Keep training records. Track performance.
Steps and Documents
Essential documents include Product Development Reports, transfer plans and validation records. Training ensures factory staff can use the new technology effectively.
Step | Key Activities | Documents Needed |
Evaluation and Decision | Check needs, plan quality, set batch sizes | Feasibility reports, regulatory plans |
Planning | Form teams, check factory capacity | Transfer plan, team roles |
Preparation | Share knowledge, assess risks | Development reports, attribute lists, risk analysis |
Execution | Make test batches, validate processes | Batch records, validation reports |
Assessment | Check results, test stability, fix risks | Summary reports, risk plans |
Closure and Post-Transfer | Confirm success, monitor production | Transfer report, training records, performance data |
Know How to Name a Trademark in India.
Guidelines and Processes
India follows clear guidelines from the WHO, the Indian Council of Medical Research (ICMR) and CDSCO for technology transfer.
ICMR Guidelines (2021)
These rules apply to biomedical technologies, including drugs, developed with ICMR funding. They aim to help Indian companies turn research into products, supporting “Make in India.” Key points include:
Licenses: Non-exclusive licenses are standard to share technology widely, but exclusive ones are allowed for start-ups.
Eligibility: Only Indian companies (at least 51% Indian-owned) with GMP-compliant factories can get licenses. Foreign transfers are non-exclusive.
Agreements: Use Non-Disclosure Agreements (NDAs), Material Transfer Agreements (MTAs), License Agreements and Memoranda of Understanding (MoUs).
Fees and Royalties: Companies pay upfront fees based on how ready the technology is, plus royalties of 1%-5% on sales. Higher royalties apply for advanced technologies, like drugs ready for production. Discounts are available for emergencies.
Monitoring: Companies report royalties every quarter, face audits and risk losing licenses if they don’t commercialize within two years.
Focus: Covers drugs, vaccines and regenerative medicines to ensure affordable access.
CDSCO and WHO Processes
Technology transfer requires detailed records of manufacturing processes, equipment and testing. CDSCO demands validation to ensure consistency. The process includes risk checks, training and following GMP rules. For transfers involving foreign investment, the Foreign Investment Promotion Board (FIPB) or DPIIT reviews agreements. The Department of Pharmaceuticals (DoP) also checks deals. After transfer, audits and reports to CDSCO ensure everything meets standards.
Summary
Technology transfer in pharmaceutical industry involves sharing scientific knowledge and manufacturing processes. It is directed by Patents Act, 1970. Other laws include the Drugs and Cosmetics Act, 1940 and the Indian Contract Act, 1872 which ensures quality and protects intellectual property. It also meets CDSCO rules. ICMR guidelines from 2021 support transfers. These include licensing and royalties of 1%-5%. NDAs focus on Indian companies. FDI policies allow 100% investment in new projects. This encourages global partnerships. Challenges include high costs and protecting intellectual property. Opportunities arise from low-cost production. Government programs like PLI also help. The process requires careful documentation. It involves testing and audits. This helps India stay a global leader in generic drugs.
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Technology Transfer in Pharmaceutical Industry: FAQs
Q1. WHO guidelines for technology transfer in the pharmaceutical industry?
WHO guidelines ensure safe, effective and quality-focused transfer of pharmaceutical technology with proper documentation and compliance.
Q2. What is technology transfer as per ICH guidelines?
ICH guidelines define technology transfer as moving scientific and technical knowledge to produce consistent, quality medicines.
Q3. What is the technology transfer process?
It’s the process of sharing knowledge, skills and manufacturing methods to produce pharmaceuticals reliably.
Q4. What is TT in pharma?
TT (Technology Transfer) is sharing expertise and processes to manufacture drugs effectively.
Q5. What are the 4 models of technology transfer?
The four models are licensing, joint ventures, franchising and direct investment.
