[Ip-health] Why the Modi government’s rollback of drug price control is worryingly anti-people

K.M. Gopakumar kumargopakm at gmail.com
Fri Sep 26 02:22:12 PDT 2014

Why the Modi government’s rollback of drug price control is worryingly
 By G Pramod Kumar <http://firstbiz.firstpost.com/author/pramod>
 [image: Why the Modi government’s rollback of drug price control is
worryingly anti-people]

Representational image. Thinkstock images

   -  1

 Following the Drug Price Control Order in 2012, which brought 348 drugs
under essential list of medicines, when the Narendra Modi government capped
the prices of another 108 medicines in July 2014, it was considered a bold
step indeed.
 The decision, despite stiff resistance from the pharmaceutical industry,
brought down the prices by at least 25 per cent because the logic employed
was to cap the drug-prices if they exceeded the average market price by 25
per cent. With the new move, the government had brought 58 per cent of
cardiac medicines and 21 per cent of anti-diabetic drugs under price
Now with a retrograde decision, the union government seems to be giving it
all away. While civil society and access-to-medicine activists demand for
more such price controls, the government has removed the price controlling
powers of the National Pharmaceutical Pricing Authority (NPPA), which had
capped the prices of 108 drugs. The Department of Pharmaceuticals of the
union government has instructed the NPPA to revoke the guidelines issued on
29 May that gave it the power to fix prices of drugs that are not on the
national list of essential medicines.
The decision will not affect the July price control that reduced the prices
of cardiac and anti-diabetic drugs, however without the powers, the NPPA
will not be able to do such capping any more.
Although no reasons have been given for this drastic step, it’s clear that
the government is yielding to the pressure of the pharmaceutical industry
and international lobbies that have been complaining against government
interventions, including the use of TRIPS flexibilities such as compulsory
licensing, to make life saving medicines accessible to people. That it came
ahead of Narendra Modi’s maiden visit to the US, which has been making a
lot of noise on India’s intellectual property situation, is alarming.
The words of Rod Hunter, senior vice-president, Pharmaceutical Research and
Manufacturers of America, who wrote an article
<http://www.hindustantimes.com/StoryPage/Print/1265781.aspx>in the *Hindustan
Times*, are revealing: one of the obstacles to investment in
knowledge-intensive industries in India *“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.” *
Not that the government decision is directly related to intellectual
property rights, but it certainly pleases the pharmaceutical industry.
Perhaps this is the first step towards placating the industry at the cost
of its people’s interest. “It’s encouraging that 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,” Hunter further wrote.
There is also considerable fear among public health activists and civil
society organisations that the Modi government may tinker with India’s
Patents Act. They point to the statement made by Commerce and industry
minister Nirmala Sitharaman that the government would roll out a revised
policy on Intellectual Property Rights (IPR). She also indicated that this
policy would focus on boosting innovation and tone up the overall
administration, besides setting up a think tank to strengthen the country's
patent regime.
Countering the minister’s claim that India doesn’t have an IP policy, a
group of activists have said that “the current Indian IP legal regime
represents the policy framework on IPRs which was adopted after
considerable debate inside and outside Parliament. The strength of this IPR
policy is reflected well in the successful establishment of the Indian
pharmaceutical industry within three decades”.
Sitharaman’s statement is indeed worrying because India had followed the
Indian Patents Act 1970 till 1995 and then made use of the 10-year
transition period provided by the WTO agreement on TRIPS. The compulsory
licensing provision, that the US and its pharmaceutical industry object to,
is a flexibility provided by the WTO.
The US’s objection, expressed both officially and through its lobbies, is
the Indian patent system because it’s not suitable for its interests. As
the activists point out, the “Global Intellectual Property Centre of the US
Chamber of Commerce accused India of harbouring the ‘weakest’ IP
environment among countries that it studied. Further, the US International
Trade Commission (ITC) has initiated an investigation on India’s industrial
policy, which is primarily focused on India’s intellectual property regime
and its impact on the US economy. Similarly, the United States Trade
Representative (USTR) continues to make illegitimate threats (inconsistent
with the principles of the multilateral decision making and dispute
settlement processes of the WTO) of unilateral trade sanctions against
India through the Special 301 process.”
The roll-back of the price control powers of the drug pricing authority or
yielding to the pressure of the US are against the interests of the
millions of people in India. There is a risk of India giving away its
rights, obtained through multilateral platforms, through bilateral treaties
with the US. Indians need to be vigilant.


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