Generics Dispute EU-India Trade Negotiations - Pharmaceutical Technology

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Generics Dispute EU-India Trade Negotiations
The recent India–EU summit was expected to bring news about the upcoming Free Trade Agreement between the EU and India; however, a dispute regarding the supply of generic drugs from India to developing countries has taken centre stage.


Pharmaceutical Technology Europe
Volume 23, Issue 2

Hidden agenda?

Indian companies believe that resentment from multinational companies stemming from a number of legal decisions going against them in India has led to them seeking other ways to decrease the competition by lobbying governments in their home markets.5 During 2009, Indian companies were angered by frequent seizures of their products at EU transit points by European authorities under the pretext of patent protection.

One such incident in 2009 led to the Dutch authorities detaining a shipment of Indian generics destined for Brazil and Colombia. The reason given by the Dutch authorities was that the products infringed EU patents, even though the companies pointed out that the products were off patent in India and not meant for sale in the EU. The Indian government became involved and commented that developing countries lacked the capability to manufacture these essential medicines and could not afford the patented alternatives. The Dutch Foreign Minister, on a trip to India, was drawn into the dispute and admitted that patent protection should not have been used to interfere with the distribution of generic drugs to poor patients across the world.7

Although the Dutch government and other EU officials promised to try and resolve the issues prompting the seizures, this did not stop Brazil and India from filing complaints against the EU at the WTO over the shipment seizure.8 According to EU officials the dispute centred on how member states interpreted EC Regulation 1383, which allows a rightholder to ask customs to detain shipments under suspicion of being counterfeits, pirated goods or goods infringing intellectual property rights.9,10 The rules permit detainment even where goods are in transit through the EU. According to the Indian media, complaints from sanofi aventis SA, Novartis AG and Eli Lilly led to the European seizures.9

By associating the Indian generics with patent infringement, critics of multinational pharma argue that the EU is effectively labelling the products as counterfeits, which was considered insulting in India, as the products came from wellestablished domestic companies such as Dr Reddy's and Aurobindo Pharma. Critics believe that special interest groups, supported by the multinationals, are content for there to be confusion over the concept of counterfeiting, as defined by law, and what constitutes legitimate generics.11

Meanwhile, Indian companies have little faith in EU promises to address its legislation.12 Initially, the EU offered to send notes to all customs authorities to refrain from making seizures of Indian generics, but it was only when the Indian government insisted on stronger action that it considered amending EC Regulation 1383.9 The Indian media has now reported that domestic companies are rerouting their products through ports in South Africa rather than using Europe for transit. Although this route is more expensive, it is believed to be more secure.12

No resolution

Although EU and Indian negotiators say that a deal regarding the transit of Indian generics was reached at the December 2010 summit, this has not satisfied concerns about the impact on access to medicines in developing countries.2,5 Furthermore, despite the statements from Indian officials, the complaint to the WTO has not been withdrawn. Another issue that has not been addressed by the EU is how to deal with the separate complaint from Brazil.13 In the past, Brazil has taken a strong line with pharma multinationals over their prices and has favoured its own active generics sector to provide cheap medicines to patients.

MSF continues to take a highprofile stance in the EU–India dispute, arguing that the transit issue cannot be considered in isolation of other discussions around the future FTA framework. It holds the view that pressure is being exerted behind the scenes by multinational pharma manufacturers to introduce measures that prolong data exclusivity for their products.5 EU officials have insisted that the FTA will not restrict India's right to produce generic drugs and have suggested that MSF and its supporters are spreading irresponsible rumours.13 In response, MSF has asked the EU negotiators to specifically state that data exclusivity and other related intellectual property details are not being considered as part of the FTA discussions. EU officials have refused to do this because they are still negotiating the terms of the FTA. To exert further pressure, MSF has launched a high profile campaign called Hands Off Our Medicine.14 In December 2010, to coincide with the EU–India summit, MSF organised protests in Nairobi (Kenya), Bangkok (Thailand), Jakarta (Indonesia), India and Brussels (Belgium) in opposition to the impact of EU's trade policies on access to medicines.

The EU needs to tread carefully. Considering its usual role in battling with the pharma industry for better pricing for patients in Europe, it would be highly embarrassing if the EU were to be seen as having a different opinion when it comes to patients in developing regions. It also has much to lose by annoying major trade partners such as India and Brazil. The pharmaceutical industry must also be wary because its image has been heavily tarnished in the past regarding patient access issues. In 2001, for instance, it was at the centre of a battle with the South African government, which was examining ways to source generics to help tackle its HIV crisis.15 Public opinion was firmly against the pharmaceutical multinationals.

Although a provisional timeframe of Spring 2011 has been set for the EU–India FTA, it is unlikely that the side issues concerning generics will have been resolved. It seems likely though that EU officials and representatives of the pharmaceutical multinationals will be forced to reveal their position on global access to medicines by MSF and others supporting its views.


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