THE head of Europe’s biggest drugmaker is to demand that China and India ban copycat manufacturers, warning them that overseas investment will stall unless laws enforcing intellectual property rights are reformed, The Times has learnt.

J-P Garnier, chief executive of GlaxoSmithKline, will call on the Government today to make new laws in China and India a condition of trade with both countries. In a speech to international business leaders in London he will press home his demand by giving warning that further intransigence on patent protection will derail globalisation efforts.

Speaking to The Times last night, the GSK chief said: “If China and India would give us true protection on our pharmaceuticals we would have bigger investments there. Frankly, at the moment we are holding off a bit. We could have a network of deeper collaborations and R&D work, but we won’t do that unless these countries show respect for our intellectual property.”

Dr Garnier said that counterfeiters in China were particularly worrying, adding that some pirates work out of factories that dwarf the size of GSK’s regulated production facilities. Although China has signed up to a World Trade Organisation treaty that specifically calls for laws to protect drug patents, the country is plagued by counterfeit drugs including large numbers of hepatitis B medicines that contain no active ingredient and antibiotics that contain serious impurities.

The chief executive said: “Gucci bags are one thing, but phoney drugs that kill people is extremely serious. Why should we put our best efforts into those countries if they haven’t given any tangible proof that they are going to be supportive of what we do? “India and China have benefited enormously from globalisation by importing jobs from Europe and the US. They now have to play by the rules, and one of those rules is to respect intellectual property. These countries have signed treaties to enforce patent rights. What we are asking is for them to honour their pledges so that we can compete on a level playing field.”

He conceded that India, which pushed through temporary laws in order to comply with the WTO treaty by the January 1, 2005, deadline, was making a step in the right direction.

But he cautioned that the real test would rest with the way in which the legislation is enforced: “There are thousands of people lodging patents in India and the authorities have not yet allocated sufficient resources to process all these filings. This will be a good test — are they going to process these patents rapidly so that we can enforce them or is there going to be such a bottleneck that it’s going to be meaningless?”

The GSK chief moved to calm fears that the flow of jobs to India and China would quicken: “The UK is not going to win the war over low-cost jobs — we have a new financial services centre in India and there’s no doubt that it will expand in the future. But the UK will remain our anchor. There is an understanding of what it takes to win in the global market here and the UK, in terms of its competitive edge, is gaining further ground over the rest of Europe.”

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