Report From India: A new patent battleground has formed over India's drug shipments through the European Union. - Pharmaceutical Technology

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Report From India: A new patent battleground has formed over India's drug shipments through the European Union.
Patent infringement claims and a lack of clear global trade distribution routes may be unraveling the country's generic-drug export industry.


Pharmaceutical Technology
Volume 33, Issue 7

Echoes around the world

Brazil joined the chorus. In its complaint to WTO, the Brazilian government alleged that multinational drug manufacturers in Europe had gone a step further by persuading African nations to enact anticounterfeit laws (4). Without these laws, Indian drug exporters could stand to lose more than $1 billion, according to trade sources.

In December 2008, Kenya passed an anticounterfeiting act to disallow the sale of generic drugs on the grounds that they were spurious (5, 6). Other African countries such as Uganda, Peru, Zambia, and Ghana are debating similar laws.

Multinational drug firms, unable to compete with the cheaper and efficacious medicines from India, are now resorting to a smear campaign, according to D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance (IPA), an association of pharmacists in the country. "Earlier, custom authorities detained generic drugs from India on the grounds that they were patented in Europe. Now, many are convincing African countries to bring in such legislations," he says.

Adding fuel to the fire is the fact that the US Trade Representative (USTR) recently raised an alarm over the proliferation of counterfeit drugs in India. "A significant contributing factor in this problem is the unauthorized use of bulk active pharmaceutical ingredients (APIs) to manufacture counterfeit pharmaceuticals," says an Apr. 30 release from the USTR's office. By bracketing India with China and Russia, as well as a few smaller countries, the USTR also put the country on a "priority watch list" (7).

Domestic backlash

"Is all this really necessary," questions Aurobindo Pharma Deputy Director Lanka Srinivas. "All of these are just maligning tactics to stave off generic imports. Multinationals are slowly realizing the tremendous growth that exists in the Asian region. They have realized that if they have to make a dent in these markets and not just feed off the US and Europe, they will need to play up their quality card. An easy way is to label Indian drugs as counterfeit."

There are severe cost implications, adds N.R. Munjal, vice-chairman of Ind-Swift. "Such attempts force exporters to look at alternative routes to send the medicines, which could impact the cost competitiveness of Indian generic drugs," he says.

The Pharmaceuticals Export Promotion Council (Pharmexcil), an agency established by India's commerce ministry, is understandably perturbed. "In the last couple of months, we have been receiving an increasing number of reports from pharma exporters about their consignments being seized in Germany, France, the UK, and The Netherlands," says Pharmexcil Executive Director P.V. Appaji. "The drugs are not substandard or of compromised quality. Besides, they are not meant for the European market but are just using EU ports while in transit. They do not violate any laws," he adds.

Sixteen global public health, consumer, and development groups voiced concern to WTO over the matter in a Feb. 18, 2009 letter (3). Noting that the seizure of drug products in transit were made under the EU's customs requirements, the groups claim that current trade rules do not protect legitimate sellers and buyers of generic medicines when those goods move through a global supply chain.

In a March response to the joint letter from concerned nonprofit organizations, Pascal Lamy, director-general of WTO, noted that creating barriers to legitimate trade in generic medicines should be avoided (8). Indeed, Lamy refers to the 2001 Doha Declaration on TRIPS, which confirms the determination of members to promote access to medicines for all. These recent actions seem to be threatening the delicate balance that exists between public policy goals and intellectual-property right holders, and widening the developing-developed country barrier. Only time will tell how far the scales tip in either direction.

A. Nair is a freelance writer based in Mumbai.

References

1. Press reports/company information.

2. NGO Letter to M. Chan, WHO Director-General, Feb. 18, 2009, http://www.keionline.org/misc-docs/seizures/WHO_seizures_18feb.pdf, accessed June 10. 2009.

3. NGO Letter to P. Lamy, WTO Director-General,Feb. 18 2009, http://www.keionline.org/misc-docs/seizures/WTO_seizures_18feb.pdf, accessed June 10, 2009.

4. Statement by Brazil to TRIPS Council, Feb.3–4, 2009, http://www.ip-watch.org/weblog/wp-content/uploads/2009/03/intervention-by-brazil.pdf, accessed June 11, 2009.

5. East African Customs Union, "Indian Drug Makers Say Kenya's Counterfeit Law Will Wipe Out Their Market," Jan. 17, 2009.

6. WTO, World Trade News, No. 1934, May 13, 2009.

7. Office of the USTR, "Special 301 Report," Apr. 30, 2009, http://www.ustr.gov/sites/default/files/Full%20Version%20of%20the%202009%20SPECIAL%20301%20REPORT.pdf, accessed June 10, 2009.

8. P. Lamy, WTO Director-General, Letter to 16 organizations, Mar. 4, 2009, http://www.keionline.org/misc-docs/seizures/dglamyresponse.pdf, accessed June 10, 2009.


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