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European Union-India FTA may hit generic medical industry

Times of India

European Union-India FTA may hit generic medical industry

By Rema Nagarajan, TNN

21 March 2013

The free trade agreement that European Union is pushing India to sign could put an end to India’s status as the pharmacy of the developing providing affordable medicines, especially HIV drugs to countries like Brazil, Thailand, South Africa, Zimbabwe and several others. The negotiations with EU are on at a feverish pace this week in Brussels even before the parliamentary standing committee looking into the free trade agreements (FTAs) has submitted its report.

So far, the text of the FTA has not been made public, but the leaked text of the agreement is widely available on the internet. The provisions in the leaked text show that the free trade agreement with EU has provisions which will force intellectual property (IP) rights enforcement beyond what is stipulated in the World Trade Organisation agreement on patents ( TRIPS) that India signed in 2005 which would severely affect the functioning of India’s generic medicines industry.

The department-related parliamentary standing committee on commerce, which is supposed to examine all FTAs that India is negotiating, is the only way to ensure that parliament is kept informed of what India is signing onto through these FTAs. While in most other countries, including in the EU, any FTA signed has to be ratified by its parliament, such ratification is not required in India. The committee hearings are the only way parliament can ensure that the interest of the Indian people is not compromised. These FTAs are signed in the name of enhancing trade.

"How can you keep a document which will affect public interest away from public knowledge? The text ought to be made available so that people know what EU is pushing India to agree to through this FTA. If the FTA is actually beneficial for India, why such secrecy?" asked Dr Mira Shiva, of the All India Drug Action Network (AIDAN).

"Once the FTA is signed it cannot be rolled back even if the parliamentary standing committee report raises objections to its provisions. Hence, it is very important that India does not get pressurized into signing the FTA," asks Leena Menghaney, manager of Medicins Sans Frontieres’ (Doctors Without Borders) Access Campaign.

India-EU FTA negotiations started in 2007. During the last five years, health activists have pushed hard to keep intellectual property (IP) and matters related to patents on medicines out of the FTA. As a result, two of provisions relating to IP have been dropped- one provision which would extend patents beyond the 20 years granted to patent-holding companies. The other provision would have prevented Indian companies from registering a generic medicine based on clinical trial data submitted by the patent-holding company. This would have meant that each generic manufacturer would have to conduct clinical trial for generics all over again, a waste of resources and not a requirement under Indian patent law.

However, there remain several provisions in the FTA potentially detrimental to Indian interests. "Aggressive IP proposals will in the long run undermine the constitutional right to life; dismantle public health safeguards enshrined in national laws, and significantly reduce the local capacity to produce price-lowering generic medicines. Yet FTAs attract little public attention, as they are negotiated in secret, despite repeated requests from public interest groups to open them to public debate and parliamentary scrutiny," said MSF’s statement on FTAs called "Trading Away Health".

FTA provisions that will affect access to medicines

*Indian courts balance commercial and public health interests in IP cases related to life-saving medicines. FTA provision will not allow courts to differentiate between different kinds of IP and force it use injunction even in yet-to-be-proved patent infringement cases of medicine.

*Third party liability- suppliers of ingredients for generics, generics stockists and even generics buyers like MSF can be made party to the case and injunctions passed immediately against them even if case proved baseless later.

*Precautionary seizure of goods and third party liability to stop production of generics suggested in FTA could dissuade prospective third parties from working with generic producers affecting entire production and supply system of generic medicines

*TRIPS only mandates against import of drugs that infringe patent. But FTA would force Indian customs officials to ensure that drugs exported from India do not violate any patent. India’s export of generic medicines to developing countries will be hit.

*Broader definition of investment to include IP. Then, an IP dispute will be decided not in Indian court but by arbitration outside India where public interest and public policy of India will not be considered unlike if Indian courts decide.