[Ip-health] Op-Ed in Hindu Business Line: A Flimsy Case Against Indian Pharma
mpalmedo at wcl.american.edu
Mon Mar 10 06:32:42 PDT 2014
A flimsy case against Indian pharma
India has issued just one compulsory license in all these years. But to
US drug companies, even this is unacceptable
Trade tensions between the US and India are on the rise. Multiple trade
organisations have asked the US Trade Representative to designate India
a Priority Foreign Country in its annual review of countries that "deny
adequate and effective protection of intellectual property rights." This
would trigger an investigation under the Trade Act that could ultimately
lead to sanctions.
Additionally, the US International Trade Commission has been instructed
by Congressional leaders to investigate "Indian industrial policies that
discriminate against US imports and investment for the sake of
supporting Indian domestic industries".
Much of the controversy surrounds flexibilities in Indian patent law
designed to promote access to generic medicines.
The medicines at issue tend to be expensive cancer treatments priced far
out of reach for most of the Indians.
The policy pill
Health advocates argue that the policies - including a strict standard
for patentable subject matter and the availability of compulsory patent
licenses - are precisely the types of policies protected by
flexibilities in the WTO's Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS).
These flexibilities are emphasised by the Doha Declaration, signed by
all WTO members in 2001, which reaffirms all countries' right to
structure their intellectual property rights laws in a way that promotes
"access to medicines for all."
American pharmaceutical companies have opposed the use of these
flexibilities when countries have used them in the past. They currently
claim that weak intellectual property protection in India is hurting
their business interests. However, data on exports by U.S.
pharmaceutical firms to India tell a different story. Overall
pharmaceutical exports increased from $39 million to $225 million during
the period 2000-2012 - an increase of 470 per cent.
Furthermore, US pharmaceutical exports to India are growing at a faster
rate than US pharmaceutical exports to the world as a whole.
At a hearing held by the International Trade Commission last week, some
of the witnesses discussed positive experiences enjoyed by particular
American branded drug companies doing business in India.
Ron Somers from the US-India Business Council testified that "many
pharma companies are thriving in India: Abbott, GSK, Gilead, to name
just a few" and he noted that Indian courts have also ruled in favour of
Western pharmaceutical companies, just as they have ruled against them.
DG Shah from the Indian Pharmaceutical Alliance testified that "there is
a long list of granted patents" for new uses of known products that meet
India's rules for patentable subject matter.
The debate over compulsory licensing is the most dramatic example of the
disconnect between the industry's rhetoric and its experience as
observed through data. To date, there has not been a single compulsory
license granted on an American medicine patent.
There was an application for a compulsory licence for Bristol
Myers-Squibb's drug Sprycel, but it was rejected by the courts. Many
patents have been granted: the Indian Patent office reports it granted
3,520 pharmaceutical patents from 2007 to 2012. But to date, there has
been one compulsory license issued for a patent held by Bayer, a German
Why then, do the American drug companies argue so strongly against
India's intellectual property policies?
The most likely reason is that they are afraid that India will establish
a global norm for countries seeking to maximise the flexibilities in
TRIPS to promoting access to generic medicines.
A recent report published jointly by the World Trade Organisation, World
Health Organisation, and World Intellectual Property Organisation
highlighted both strict standards for patentable subject matter and the
use of compulsory licensing as measures that countries can take to
maximise the provision of medicines.
Emerging markets such as Brazil and South Africa are considering these
measures as they debate reform to their patent laws.
US industry representatives have begun to call this a "contagion" of
weakening intellectual property. It is this perceived threat of future
loosening of intellectual property norms that has companies worried, and
has led them to petition the US government to exert pressure India in
order to change its drug patent policies.
On the other hand, the inaccessibility of important medicines is an
immediate health problem. The one compulsory licence issued on Bayer's
product - Nexavar, a medicine used to treat late stage cancers of the
kidney and liver - illustrates this.
Representatives from Bayer and PhRMA have noted that Bayer was making
the drug available at a lower "access price" in India.
However, if one converts the full price and access price to US dollars
(based on a January 2013 exchange rate) and compares them to the average
annual income-by-quintile as reported by the World Bank, the data shows
that both prices exceed annual income of even the top 20 per cent of
It drives home the point that the current trade dispute between the US
and India is about more than bland-sounding global norms regarding
patents. It is about whether or not people in India (and elsewhere) will
be able to access important new medicines as they enter the market.
The author is a researcher at the American University Washington College
Program on Information Justice and Intellectual Property
American University Washington College of Law
4801 Massachusetts Ave., NW, Washington, D.C. 20016
W: 202-274-4442 | M: 571-289-3683
wcl.american.edu | infojustice.org | pijip-impact.org
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