[Ip-health] US pressure on India - Note on Release of 2016 US Trade 301 Watch List Report

leena menghaney leenamenghaney at gmail.com
Thu Apr 28 01:55:04 PDT 2016

April 27, 2016 - The United States Trade Representative’s (USTR) 2016
“Special 301 Report” was released yesterday. Many countries - including
India - are targeted and put on a ‘Priority Watch List’ for using legal
tools to protect generic competition and access to affordable medicines.
The USTR’s press release and the 2016 301 Report is available at
http://tinyurl.com/jdmlbw7 and

Many US industries, in particular the pharmaceutical industry, use the
report to condemn and pressure governments which employ intellectual
property (IP) systems that do not match intellectual property laws and
practices in the United States.

This 301 report comes amidst growing criticism in the U.S. itself of an
ever-upward spiraling of drug prices for products protected by lengthy IP
monopolies, which threaten people’s access to treatment and the
sustainability of health services. Current US intellectual property laws
enable drug makers to charge exorbitant prices for medicines, such as
Gilead Sciences, which charge up to US$1,000 a pill for new hepatitis C
drug sofosbuvir.

India remains on the Priority Watch List, and continues to be singled out
for what the USTR considers to be inadequate protection of intellectual
property for its pharmaceutical industry. Over the past two years, pressure
has been built up on the agency that administers IP laws and policy — the
Department of Industrial Policy & Promotion (DIPP) to ensure stringent IP
enforcement,  fast track examination of patent claims of its companies and
a moratorium on compulsory licensing. There has also been intense US
scrutiny of the Indian judiciary of its handling of patent disputes
including its decisions on patentability (Novartis vs. Union of India),
compulsory licensing (Bayer Corporation vs. Union of India) and finally on
any failure to secure injunctions to shut down generic competition.

The 301 Report clearly attacks section 3(d) of the Indian Patent Act and
the fact that through the application of a stricter patentability standard
a number of evergreening claims have been denied patent protection.

Yet India’s laws and policies vis-a-vis IP, promote generic competition and
limit abusive pharmaceutical industry practices, including patent
'evergreening', are entirely compliant with WTO trade rules, and these
actions save lives.

India—the world’s principal producer and supplier of quality generic
medicines, including for US-funded treatment programs like PEPFAR that
support antiretroviral treatment in developing countries. Indian generic
companies supply affordable, life-saving medicines used to treat
communicable and non-communicable diseases in many developing countries;
these medicines are essential to continue scaling up treatment programs.
For example, two thirds of all the drugs MSF purchases to treat HIV, TB and
malaria in our medical humanitarian operations are generic medicines made
in India.

It’s clear India will keep facing intense pressure to undermine its role as
‘pharmacy of the developing world’. In June 2015 MSF launched a campaign
using #HandsOffOurMeds, to urge Indian Prime Minister Narendra Modi to
stand strong in the face of intensifying pressure from the United States to
change India’s laws and policies in ways that would severely restrict the
country’s ability to produce affordable medicines, upon which millions of
people around the world rely. For more, visit handsoff.msf.org.

Recent developments:

On 25th April 2016, Minister Nirmala Sitharaman, Commerce & Industry,
issued the following statement regarding the US Trade 301 Watch List Report
in response to a parliamentary question on the issue:

"The Special 301 Report issued by the United States under their Trade Act
of 1974 is a unilateral measure to create pressure on countries to enhance
IPR protection beyond the TRIPS agreement. Under the WTO regime, any
dispute between two countries needs to be referred to the Dispute
Settlement Body of the WTO and unilateral actions are not tenable under
this regime. Special 301 which is an extra territorial application of the
domestic law of a country is inconsistent with the established norms of the
WTO. The government is committed to fully utilizing all the flexibilities
provided under the TRIPS agreement to protect domestic pharmaceutical
sector from pressure exerted by the foreign countries.”

 Other recent disconcerting developments concerning IPR in India negatively
impacting access to medicine:

-       Last month the Indian media revealed that a US industry lobby group
– the US India Business Council (USIBC) and US Chamber of Commerce – has
received verbal, private assurances from Indian officials that it will not
grant compulsory licences on medicines - overriding a patent to allow for
the marketing of affordable generic versions - in the future. The U.S.
pharmaceutical industry seemed confident that it has successfully created a
chilling effect on Indian authorities who will not process any more CLs on
their patented blockbuster medicines.The Indian government quickly issued a
clarification that it has the freedom to grant compulsory licences and to
determine the grounds upon which such licences are granted. Not
surprisingly the 301 Report states – “the United States also continues to
monitor India’s application of its compulsory licensing law”, making it
clear that it will keep pressurizing India against CLs.

-  Indian patent office is in process of amending the patent rules - under
pressure from industry and law firms – to introduce fast track patent
examination, which will undermine the ability  which will undermine the
efforts of public interest organisations and patient groups to file
pre-grant oppositions against the grant of 'evergreening' patent claims on
medicines. The patent system is not transparent enough and it takes years
to do a patent landscape to identify multiple patent applications on each
drug including the ones that seek to attempt patent term extensions through
ever greening.

 - The draft national IP policy pending before the cabinet may include
proposals that are detrimental to access to medicines and reforming the
biomedical innovation system to meet the needs of developing countries.

-  The USIBC, a group that also receives funding from pharmaceutical
companies, has revealed in its 2016 submission to the US Trade
Representative that it had conducted training for India’s patent examiners,
a move that compromises the independence of the patent examination system
which was designed with the social objective of stopping drug giants from
indulging in ‘evergreening’. Evergreening covers simple changes in the
chemistry or formulation of existing pharmaceutical products - a lucrative
game for the pharmaceutical business, but also a deadly one for patients:
preventing generic competition for these medicines.

 - The IPR Working Group, established by President Obama and Prime Minister
Modi, operates under the United States-India Trade Policy Forum.
Establishing such bilateral Working Groups is part of the US strategy.
They are troubling, they are a form of continuous negotiations and pressure
as it allows closed door discussions on key issues which in practice could
lead to the increase of enforcement and other TRIPS Plus provisions or
their application in a way that suits foreign right holders rather than
local conditions and as such is an attempt to limit the policy space of
developing countries including India.  The 301 Report on page 52 clearly
states – “The United States continues to press India in our bilateral
dialogues, including through the IPR Working Group, to address the concerns
identified in this Report”.

 - With the passage of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Bill in December 2015, IP
cases including disputes on pharmaceutical patents have been moved to
commercial courts. These specialized commercial courts can narrow a judge’s
view and could undermine the critical role the judiciary can play in the
future to protect the constitutional right to life, and in particular
establishing a balance between the enforcement of private IP rights with
the need to implement safeguards in the patent law that protect generic

Leena Menghaney
Mobile: 9811365412

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