[Ip-health] Obama Administration, Congress Intensify Opposition To Global Generic Drug Industry

Riaz K Tayob riaz.tayob at gmail.com
Fri Jun 28 06:06:00 PDT 2013

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  Obama Administration, Congress Intensify Opposition To Global Generic
  Drug Industry

Posted: 06/28/2013 7:32 am EDT  |  Updated: 06/28/2013 7:45 am EDT

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WASHINGTON -- The Obama administration and members of Congress are 
pressing India to curb its generic medication industry. The move comes 
at the behest of U.S. pharmaceutical companies, which have drowned out 
warnings from public health experts that inexpensive drugs from India 
are essential to providing life-saving treatments around the world.

Low-cost generics from India have dramatically lowered medical costs in 
developing countries and proved critical to global AIDS relief programs; 
about 98 percent of the drugs purchased by President George W. Bush's 
landmark PEPFAR AIDS relief program are generics from India. Before 
Indian companies rolled out generic versions priced at $1 a day, AIDS 
medication cost about $10,000 per person per year.

But India's generic industry has also cut into profits for Pfizer and 
other U.S. and European drug companies. In response, these companies 
have sought to impose aggressive patenting and intellectual property 
standards in India, measures that would grant the firms monopoly pricing 
power over new drugs and lock out generics producers.

On Thursday, a House subcommittee held a hearing on international trade 
disputes with India that included testimony from American manufacturing 
and solar energy groups. Most of the event, however, was devoted to U.S. 
drug company Pfizer's complaints about Indian policies that have 
fostered the country's billion-dollar generics industry. The hearing 
followed Secretary of State John Kerry's trip to India earlier this week 
for the U.S.-India Strategic Dialogue, a major diplomatic mission.

Last week, a bipartisan group of 170 House lawmakers sent a letter to 
Kerry and President Barack Obama raising objections to India's patent 
system. But at Thursday's hearing, few seemed well-versed on 
intellectual property or public health issues.

"I first learned of this issue just a few short weeks ago from Pfizer, 
my largest employer in my district," said Rep. Fred Upton (R-Mich.), 
before asking Pfizer Chief Intellectual Property Officer Roy Waldron if 
his company had talked to the Obama administration about its concerns.

"We have been speaking with [the Office of the U.S. Trade 
Representative] and the administration and we're very hopeful that this 
issue has been raised during Secretary Kerry's visit to India," Waldron 

A State Department spokesperson told HuffPost that during his trip, 
Kerry "discussed a number of economic and trade issues with Indian 
officials, including ongoing issues in the pharmaceutical sector."

Kerry's involvement represents an escalation in the Obama 
administration's opposition to India's generic drug policies. Following 
two recent landmark court decisions, the U.S. Patent and Trademark 
Office and the Office of the U.S. Trade Representative have been 
the Indian government on its patent standards 

In January, India's Supreme Court rejected a patent on a Novartis 
leukemia drug called Gleevec (or Glivec) 
clearing the way for cheaper generic production. The active ingredient 
in Gleevec has been available for years, but Novartis filed for a patent 
on an updated version available in pill form. India's highest court 
turned down <http://judis.nic.in/supremecourt/imgs1.aspx?filename=40212> 
the application on the grounds that the delivery format did not 
constitute a legitimate innovation.

Gleevec is protected by multiple U.S. patents, and costs upwards of 
$75,000 a year 
domestically. In India, where annual per capita income is about $1,400, 
Novartis was charging about $31,000 a year for the medication. The 
generic version legalized by the court's decision costs around $2,100 

Last year, India also permitted a generic manufacturer to produce a 
cheaper version 
of another cancer drug patented by Bayer AG. Bayer was charging $5,000 a 
month for the drug, while only servicing about 2 percent of the 
population that needed it. The generic version was priced at $157 a month.

By securing secondary patents, as Novartis tried to do with Gleevec, 
drug companies can effectively extend monopolies on their medicines 
beyond the standard 20-year window required by World Trade Organization 
treaties. The practice is known as "evergreening," and is frowned upon 
by the World Health Organization.

At Thursday's hearing, Rep. Jerry McNerny (D-Calif.) appeared more 
concerned than other lawmakers about the public health consequences of 
altering India's existing patent system. He asked Rohit Malpani of the 
international medical aid group Doctors Without Borders to elaborate on 
problems that arise from evergreening.

Rep. Henry Waxman (D-Calif.) also extolled the importance of access to 
inexpensive medications for PEPFAR, which has seen its budget cut in 
recent years.

Otherwise, lawmakers appeared receptive to Waldron's contention that 
U.S.-style intellectual property policies in India will help develop a 
more robust and innovative medical system there. Waldron also said such 
practices would lead to the creation of more American jobs, pointing to 
a study from the U.S. Department of Commerce that was also cited in last 
week's letter from lawmakers.

That study has been widely ridiculed 
for overstating the impact of intellectual property protections on jobs, 
claiming that "IP-intensive" industries are responsible for nearly 20 
percent of all American jobs. Yet the pharmaceutical industry, which is 
largely comprised of firms dependent on government copyright and patent 
protections, accounts for a little less than 300,000 jobs, according to 
the report.

The U.S. has attacked the global generic drug industry before. President 
Bill Clinton adopted policies during his presidency that were hostile 
toward the introduction of generic AIDS medications in Africa, relenting 
only when activists disrupted campaign events over the issue. Clinton 
later came to regret his administration's position and has been very 
active on international AIDS relief efforts through the Clinton Global 

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