[Ip-health] PhRMA's take (and lies) on Modi's visit to the US

Baker, Brook b.baker at neu.edu
Fri Sep 19 08:59:45 PDT 2014

The number of lies and misrepresentations in this piece is hard to calculate, but three stand out:

LIE 1:  South Korea and China's economic development were predicated on foreign direct investment secured by strong intellectual property rights:  Truth:  South Korea and China were both famous and rampant copiers of other countries' technologies as they built their industrial base and built their technological capacity.  It is a total rewrite of history to hold them – or virtually any other developed economy – up a paragons of IP-virtue when going through the development process.  They all stole, borrowed from, and copied each other, but now they want to pull up the imitation/adaptation/incremental-innovation ladder from countries that have not completed, or in some cases even started, their technological advancement.

LIE 2:  India is hostile to intellectual property rights, has invalidated patents on a significant proportion of innovative drugs, and has issued multiple compulsory licenses:  Truth:   Between 2005 and 2013, India has granted 161 patents to Pfizer, 333 to Sanofi SA, 243 to F. Hoffman La Roche, 200 to Novartis AG, and hundreds to other foreign drug companies as well.  The number of oppositions pales in comparison.  A higher percentage of pharmaceutical patents are rejected in India than in the US because it has used its TRIPS-compliant flexibilities to adopt higher patentability standards to avoid the proliferation of secondary patents on minor variations to and new uses of existing medicines.  India may be hostile to the US's low standard of patentability and to the demands of PhRMA for every more relaxed standards and for longer and stronger forms of patent and data monopolies, but that does not mean that India is hostile to its current minimum-standard obligations under the TRIPS Agreement.  Rather than having issued multiple compulsory licenses, India has issued one, famously on Gilead highly overpriced cancer medicine Glivec.

LIE 3:  Compulsory licenses are limited to public health emergencies:  Truth:  This old canard – a flat out lie – has been used by PhRMA over and over again for 20 years, despite the fact that the Doha Declaration clarified what was already obvious on the face of Article 31 of the TRIPS Agreement – countries have complete sovereignty to determine the grounds upon which compulsory licenses might be issued.  There are special, expedited procedures for emergencies, but compulsory licenses are certainly available for ordinary health needs as well.

People reliant on India for affordable access to life-saving medicines can only hope that Prime Minister Modi does not fall prey to this nonsense.  India's generic industry is vital to India's economy and to the health and well being of billions in low- and middle-income countries.  He shouldn't capitulate to ruthless multinational pharmaceutical giants that think nothing of charging dollars for what costs pennies.

Hindustan Times

The PM must walk the talk on FDI
Rod Hunter
Sept. 19, 2014 - In Prime Minister Narendra Modi’s Independence Day speech, he called on international businesses to deepen their investment in India. He’s right to focus on foreign direct investment (FDI), but fundamental to India’s ability to attract more capital will be overhauling public policies that have made the country inhospitable to investment from foreign firms.

Modi’s plans build on a model of development with a record of success: Modernise infrastructure and open up to FDI. South Korea pioneered this approach. Its exemplary record of economic growth — averaging 7% annual growth over the past 50 years — was a by-product of welcoming foreign investment, protecting property rights, and integrating with the global economy.

China has pursued a similar model on a grander scale. Like South Korea, China has provided workable infrastructure, a skilled workforce, and relatively secure property rights for investors.

India should be able to replicate this progress. Given its large supply of well-educated, English-speaking workforce, relatively low labour costs, and large potential domestic market, the country is well-positioned to attract FDI. But, in addition to inadequate infrastructure, a thicket of regulatory and legal obstacles has scared off investment. From 2010 to 2012, the country’s stock of FDI totalled just 12% of GDP, while the developing country average was 30%. India attracts only 2.7% of a total $1.62 trillion in global R&D spending; China attracts 17.5%.

If Modi is serious about attracting more investment to the knowledge-intensive industries (such as the biopharmaceutical sector), his government will need to tackle three obstacles.

The first obstacle is intellectual property (IP) rights. India has been hostile to IP protection, especially for biopharmaceuticals. In recent years, India has invalidated or otherwise attacked patents on a significant portion of innovative drugs available in India in order to make way for local champions. These attacks have been implemented through ‘compulsory licences’ and state approvals of copies of patented drugs. India should clarify that compulsory licences will be confined to genuine public health emergencies (as prescribed by international agreements), and reform drug approval procedures.

The second obstacle is the regulatory system. There is an unpredictable regulatory environment for clinical trials and drug approvals. India should streamline those measures, simplify administrative procedures for review of drug approval applications, and harmonise drug review standards with international standards.

The third area is the broader healthcare system. The government’s spending on healthcare is among the lowest in the world — $55 per capita, which is less than its BRICS peers. Within this limited budget, India devotes less than 1% of its GDP to medicines and collects more in tariffs and taxes on medicines than it spends on medicines. India can increase public spending on healthcare and create  a framework for expansion of private health insurance.

It’s encouraging that as Modi is speaking out on the importance of attracting FDI. But translating rhetoric into reality will depend on overcoming inertia and confronting vested interests that are committed to the status quo. If he succeeds, India will benefit from more investment, more economic opportunity, and greater prosperity for millions of people.

Rod Hunter is senior vice-president, Pharmaceutical Research and Manufacturers of America.
The views expressed by the author are personal.


Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
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Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
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