Events & Issues

New Delhi, 23 February 2009

INDIA To Take On EU

Generic Drugs’ War Hotting Up

By Dr. P. K. Vasudeva

At a meeting of the World Trade Organization (WTO) recently, the developing countries accused the European Union (EU) of seeking to use tough intellectual property laws to seize generic drugs, putting lives at risk in emerging nations, where cheaper medicines are often destined.

On February 2, both Brazil and India criticized the EU over last year’s seizure of an Indian generic drug to treat high blood pressure to Brazil while it was transiting the Netherlands. Brazil’s WTO ambassador took up the matter at the WTO’s General Council complaining that the case reflected a trend by industrialised countries to try and circumvent global trade rules by pushing tough intellectual property standards in other bodies, such as the World Customs Organization and the World Health Organization.

The case touches on a sensitive issue between the rich and poor nations i.e. of allowing access to affordable medicines. Importantly, it is being cited by the developing countries as an example of rising protectionism in the times of economic crisis.

The Indian statement to the WTO is unequivocal: We have raised the issue here with the expectation that the EC (European Commission) will urgently review the relevant regulations and the actions of the national authorities based on such regulations, and bring them in conformity with the letter and spirit of the Trips (trade-related aspects of intellectual property rights) agreement and the rules-based WTO system. However, on its part, the EU ambassador criticized the “highly emotional debate” and warned fellow WTO members against jumping to wrong conclusions or blowing the case out of proportion.

The tussle between the Indian generic drug industry and western innovative pharmaceutical firms is set to get stronger as India is considering dragging the European Union to WTO on the issue. This is so, as India's $ 12-billion pharmaceutical industry gets 40 per cent of its revenue from exports of generic drugs across the world, of which a large part goes to the EU and the US markets. However, it constantly comes under fire from large pharma companies in these regions in the name of patent infringement.

New Delhi sees the action as “a very concerted move by MNC to disrupt the growth of Indian generic industry," and is underscoring the need for unity of the developing nations on the issue. However, prior to taking the matter to the WTO and challenging it, India would seek consultation with the EU.

Under the WTO rules, before a country takes another member to the Dispute Settlement Body it gets into the process of "consultations". If the consultations do not yield into a resolution of the issues, the WTO Dispute Settlement Panel starts the proceedings. The seizure of a transiting export consignment belonging to Dr Reddy’s Laboratories by the Dutch customs authorities, barely two months after another local drug-maker Ind-Swift faced a similar situation, has the domestic pharmaceutical industry up in arms over what it says are efforts to block the movement of generic drugs.

Though the consignments were seized by the customs authorities investigating patent infringement, the domestic pharma industry smells attempts to discredit generic drugs by equating them to counterfeits. There is a major basic difference in the two. 

A counterfeit medicine is when there is a false representation of the identity or source of the drug and its packaging or labelling information. Such medicines may or may not have the active ingredients of the original medicine and they are public-health hazards. On the other hand, generic drugs are medicines chemically similar to an original medicine, but sold at a price that is much less than the original. They are, however, not counterfeits, as they sell through legal channels with approvals from regulatory authorities.

Such products involved in violations or disputes concerning intellectual property rights (IPR) are not counterfeits. Just like medicines that are not authorised for marketing in a given country, though authorised elsewhere, also are not counterfeits. In fact, counterfeiting is a problem for both branded and generic drugs.

Since the public-health issue has now cast its shadow on trade, the pharma industry has urged the Union Government to ensure an unambiguous definition of counterfeits at the executive board meeting of the World Health Organsiation (WHO) in Geneva, which is a prelude to the WHO Assembly in May that will be attended by health ministers of different countries.

In the Ind-Swift case, the consignment was for Venezuela and the DRL export was for Brazil. If the consignment was merely transiting through a country, without actually being off-loaded at that port, as per rules it cannot be seized as a counterfeit product, is the Union Health Ministry understanding.

The facts of the case are that a $50,000 consignment of bulk drug losartan  (to lower blodd pressure) to Brazil was seized in transit by the Dutch authorities on charges of patent infringement.  However, the US-based DuPont holds the patent for branded losartan in the Netherlands which is sold as the brand name Cozaar brand.

The Commerce Ministry has apparently taken up the matter with the European Commission complaining that the seizure of the consignment is an act of piracy by the European Union. The consignment was going to Latin America and was seized in Europe and what has happened is a dangerous trend, which is totally uncalled for. It is part of the strategy by these countries to target generic drugs from India,

Worse, this is the second such action in the Netherlands in three months and the Indian Pharmaceutical Association (IPA) has urged serious action by the commerce department against such seizures. It has also asked the Ministries of Commerce and External Affairs, besides the Indian embassy at Geneva to take up the issue, which is clearly becoming “a non-tariff barrier against generic drugs”. Others who have joined the protest include the SME Pharma Confederation, research think-tanks such as Centre for Trade and Development and groups like the National Working Group on Patent Laws and All India Drug Action Network.

The civil society groups have minced no words and cautioned that the European Union has been working on strengthening IP enforcement. Such enforcement was being done by amending regulations that govern national authorities including drug regulators, customs, etc. This trend could lead to public authorities seizing or delaying the movement of legitimate generic medicines, on the suspicion of being “counterfeit”. Clearly, the creation of such barriers will lead to the delay in accessing affordable medicines for patients around the world. There is no more time to waste. India must take EU to the Dispute Settlement Body of the WTO to settle the pharma patent issue once for all.—INFA

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