Events & Issues

New Delhi, 12 October 2009

Drug Seizures In EU

INDIA MUST PROTEST TO WTO

By Dr. P. K. Vasudeva

In the past 16 months, over 20 shipments of generic drugs manufactured by Indian companies - including Aurobindo, Cipla and Dr Reddy’s - have been seized by the European Union customs officials while in transit in the Netherlands, France, Germany and the UK on their way to customers in Asia, Africa and Latin America. These seizures have resulted from claims by drug majors that the products were in violation of their EU intellectual property (IP) laws.

The confiscations are also to be the subject of a formal complaint by New Delhi to the World Trade Organization (WTO) dispute settlement body. The complaint, currently being prepared by the Ministry of Commerce, claims that the EU has allowed drug majors to misuse the region’s customs regulations and initiatives to combat the trade in counterfeit drugs in order to stop the medicines getting to their lawful destinations, such as Brazil, Colombia and Peru.

The Indian Drug Manufacturers Association (IDMA) has sought the intervention of the law makers in the country to save the Indian generic drug industry from internal as well as external forces, which are hell-bent to victimise the industry which is recognised as the source of quality affordable drugs worldwide.

In a memorandum sent to all the Members of Parliament (MPs), the IDMA President, NR Munjal, has said that the Rs 90,000 crore Indian pharmaceutical industry with exports of Rs 45,000 crore is currently facing serious crisis. If immediate corrective measures and required support from the Government is not forthcoming, the growth rate of the industry will be very severely affected thereby depriving the poor and needy patients of quality affordable medicines.

Munjal regrets that a very disturbing trend had emerged last year when export consignments of Indian generic medicines in transit to Latin American countries were confiscated at the EU ports. It was clearly a case of imposing Trade-Related Aspects of Intellectual Property Rights (TRIPS) Plus provisions on affordable generic drugs from India. The products had no Patent or Trade Mark problem either in India (origin country) or the destination country. But, according to allegations, there was a suspicion that the product infringed an IPR according to the Dutch law and, therefore, the Dutch customs authorities confiscated it. This action, however, is against the WTO rules.

Another major move has been to pressurise African countries, such as Kenya, who were dependant on Indian quality affordable generics, to enact vague and strange laws under economic and political threat. These laws being enacted stipulate that any generic product (including drug) will be treated as 'counterfeit' if a patent on that product exists even in one country anywhere in the world.

This will deny the poor patients, who are surviving on affordable medicines from India, access to these medicines. This issue is of life-and-death importance in Kenya and much of the rest of Africa, where HIV/AIDS patients can usually only afford generic drugs such as from India, which are up to 90 per cent cheaper than their 'Branded' counterparts. The international donors who fund some drug distribution, including the US PEPFAR and the Global Fund to Fight AIDS, Tuberculosis and Malaria, rely mostly on generic manufacturers from India.

Critics of the seizures claim that drug majors are particularly misusing EC Regulation 1383/2003, which is designed to protect the IP rights of EU member state citizens and allows seizure of medical shipments if they are suspected of containing counterfeits or infringing IP rules.

The World Health Organisation (WHO), which has condemned individual seizures, has been asked, with the WTO, to examine the issue by a group of 16 non-governmental organisations (NGOs). Under WTO rules, IP rights apply at a shipment’s point of origin and its destination only, the NGOs point out, and they claim that the drug majors’ actions represent a direct violation of the WTO Doha Declaration on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement and Public Health.

One international aid agency, Medecins Sans Frontiers (MSF), has noted its concerns for its own supplies, as it regularly transports and stores medicines in Europe on a temporary basis, while another, Oxfam International, said it was “nonsensical that a regulation intended to save lives could instead be jeopardizing the ability of doctors and nurses in developing countries to protect them.”

The EU is refusing to re-examine Regulation 1383/2003 and could now be pushing, according to Oxfam, for the rule to be extended globally through free trade agreements and the proposed Anti-Counterfeiting Trade Agreement (ACTA), currently being drawn up by 12 nations plus the EU, and which is due to start its sixth round of negotiations in South Korea in November 2009.

India’s Department of Pharmaceuticals has also recently signed an agreement with Nigerian regulators, which aims to curb Nigeria’s trade in counterfeit medicines. Recently, Nigerian officials have seized quantities of fake drugs made in China but labelled “made in India.” Also, any unregistered drugs seized in Nigeria are automatically classified as counterfeit.

The Government has no option but to approach the dispute settlement body of the WTO against such frequent seizure of Indian legitimate low-cost generic drugs by the European ports. The argument being that these were not meant for the EU markets; affected India's generic exports (drug exports from India between April 2008 and January 2009 totalled Rs 31,608 crore, according to the commerce ministry), and denied patients in South America access to cheaper medicines.

Experts say India could argue specifically on WTO’s Article 7 and 8 of the TRIPS agreement. While Article 7 says the enforcement of intellectual property rights should be done "in a manner conducive to social and economic welfare," on the other hand Article 8, gives members permission to adopt measures to protect public health and nutrition, and other public interest goals. However, legal activists feel the free trade agreement (FTA), which India is negotiating with the EU, might force it to water down any complaint.

According to Government officials, Indian drug makers shall be reimbursed by the concerned Ministry for the extra costs of shipping their products to developing nations without going through the EU, where a number of shipments have recently been confiscated. This is no solution. New Delhi needs to be firm and stand up against EU bullying tactics. ---INFA

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