Dr.

Narendrans Dilemma

Written Analysis and Communication - 1

To Prof. Mukul Vasavada Academic Associate: Amruta Dave On 2nd July 2011

By Indranil Hansda Section C

Letter of Transmittal

From Indranil Hansda

To Dr. Narendran Indian Medical [Siddha] College Chennai, Tamil Nadu

Date: 2nd July 2011 Subject: Patenting and commercialization of the Siddha formulae.

Dear Dr. Narendran, I have looked into the different options available that will help to build the reputation of Indian Medical College [IMC] and give recognition to the Siddha system of medicine among other systems by patenting and commercializing the formula. As a first option you can file the patent and sell it for a onetime fee, or second filing the patent a pharmaceutical company can be asked to manufacture the formula and the marketing can be done by the Institute. Another option is that after getting the patent an agreement is arranged with an entrepreneur who will produce and sell the formula and give royalties to the Institute. After analyzing all these options I have reached at the best option available. The report is enclosed.

Yours sincerely Indranil Hansda

Executive Summary
Indian Medical [Siddha] College [IMC] has to take the decision that if it should file a patent and commercialize the new formula that has been researched by a faculty member. The faculty members at IMC are of the opinion that IMC should do such patents as it will help Siddha gain some recognition in other systems of medicine. The effects on profitability, reputation and recognition were analyzed and three options were derived, amongst which it is recommended that IMC obtains the patent and then enter into a contract with an entrepreneur who will manufacture and sell the formula and give royalties to IMC.

[103 words]

Contents

Executive Summary. 1

Situation Analysis. 3

The Dilemma/Problem. 4

The Options4

Criteria for Evaluation.. 4

Evaluation of Options... 4

Recommendation. 6

Action Plan 6

Situation Analysis
Dr. Narendran has to take a decision on the research done by one of his faculty members Dr. Ramkumar, who despite being a good practitioner and researcher, is also a very secretive and selfish individual and has proposed to patent and commercialize the formula. Dr. Narendran on the other hand has never been concerned about the financial gains but has always given priority to developing the Siddha system. Thus it seems that till now IMC has only thought about the development of Siddha and never considered the possibility of patenting their discoveries. IMC has been an Institute that has been working towards educating more people in the Siddha system of medicine and is dedicated towards providing medical care to the patients. IMC is also inclined towards the social cause of serving people to the extent that they provided free treatment and diet to the patients admitted in the IPD. It has also conducted special OPDs during outbreaks of diseases. IMC is also very keen at researching various aspects of Siddha and wants to promote and propagate the science. The Head of Departments at the Institute have concluded that in order to promote and propagate the Siddha system they need to validate the therapies and drugs used with quantifiable evidence, so that the other systems of medicine would acknowledge their practices. They have also shown a key interest in the patenting of new formulas as practiced by other systems of medicine and also want to commercialize them. Dr. Ramkumar has approached with his formula soon after these conclusions were made, although he had developed the formula before joining IMC. However at this stage IMC does not have the expertise to file a patent or to commercialize their product.

The Dilemma/Problem
Should Dr. Narendran go ahead with Dr. Ramkumars proposal and how should he commercialize the formula.

The Options
The patent is obtained and sold for a onetime fee. After obtaining patent IMC outsources the manufacturing of the formula to a pharmaceutical company, but does the marketing by itself. y IMC obtains the patent and enters into a contract with an entrepreneur who will pay royalties on sales of the product.

y y

Criteria for Evaluation

y y y Financial viability of commercializing the patent. IMC receives academic recognition. Siddha system gains recognition among parallel systems of medicine.

Evaluation of Options
Sell Patent for onetime fee By obtaining the patent, IMC would be the first amongst the other three postgraduate Siddha Institutes in the country to do so; thus it will gain a reputation for itself. This will also motivate the faculty members who are conducting various researches in the institute, as it will also bring 4

recognition to the researcher. The Siddha system will also receive some amount of recognition among other systems of medicine as this research has quantifiable preclinical [animal toxicity] and clinical test results. By gaining this reputation and recognition it is possible that other systems of medicine might refer their patients to IMC; moreover the cost effective and no surgery required features of this formula should itself attract more patients; it will also encourage students to pursue postgraduate education in the Siddha system. Thus filing the patent should create more awareness about the Siddha system of medicine in the country. By selling the patent for a onetime fee IMC can earn a minimum of Rs 50,000 or a maximum of Rs 75,000 and will not have to do any other activity for commercialization and can concentrate on providing medical service to its patients. However, it is not clear as to how much exposure this formula will get to the other systems of medicine. Thus this option cannot be considered to be the best.

Formulae is outsourced for manufacturing but marketed by IMC The benefit of the patent has been mentioned earlier. If IMC does the marketing themselves, then the exclusivity of the product will remain with the Institute. According to the profit projection, IMC should make at least Rs 58,000 in 5 years and probably it will also be able to gain some amount of exposure to the other systems, as it is said that 10% of the sales will be from outside the system. However, IMC will have to setup a marketing team for this purpose by hiring new people, as it does not have anyone in the Institute with any prior experience of marketing. Thus it seems that this option will require a lot of effort from IMC. 5

Entrepreneur sells formulae and IMC earns royalties After getting the patent if IMC enters into a contract with an entrepreneur, then it has been estimated that IMC will earn at least Rs 55,200 in 5 years and it is also estimated that 20% of sales might come from other systems of medicine. In this arrangement IMC does not have to put in much effort, but will earn considerable amount of money and Siddha will also gain considerable exposure in the other systems of medicine, which will help to popularize Siddha as a quantifiable practice of medicine. However, IMC will have to find for itself a trust worthy partner for this venture, for which it will have to conduct back ground checks of the interested parties and ask for references before entering into a contract. IMC could probably use the help of the other Institutes in the State for this purpose. Thus it seems that this option is the most workable amongst the other two.

The Recommendation
File the patent and enter into a contract with an entrepreneur who will pay royalties on sales of the product.

Action Plan
y y Hire a lawyer who will take care of the patenting process. The funds required for this purpose can be taken from the development funds for now, which can later be reimbursed with the money earned by commercializing this patent. y Issue a tender after the patent has been obtained, so as to enter into a contract with interested entrepreneurs. By issuing a tender it is also possible for that IMC might be able 6

y y y

to receive more than 6% as royalty, which will depend on the negotiations. Conduct a background check of the interested parties. Ask help from other Siddha Institutes if required, to find a suitable partner.

[1048 words]