Make it a criminal violation: Japan

DNA | 29 June 2009

by Priyanka Golikeri

Mumbai: A huge movement against the Indian generic drugs industry seems to be underway. And helping it seems to be the free-trade agreements (FTAs) that India is signing with different countries.

After the FTA with the European Union (EU), India is negotiating one with Japan in which there are several provisions that could hamper effective marketing and exports of low-cost generics. DNA Money had earlier reported that EU was lobbying for FTA provisions that could hurt the Indian generics industry.

Like the EU, Japan is pressing for ’data exclusivity’, a provision, if granted, could increase costs, and delay the process of bringing low-cost drugs into the market.

Usually, for the registration of generics, the Drugs Controller General of India (DCGI) refers to the clinical trials data of the innovator company. If data exclusivity is granted, the maker of the generics will have to conduct all the clinical trials required to bring the drug into the market.

This will not only push up costs but also delay the launch of the generic. But a bigger demand from Japan is stringent enforcement of intellectual property (IP) laws, including criminal procedures against patent infringement.

A New Delhi-based IP expert said, "Currently in India, patent infringement is a civil liability. Japan is lobbying to make it a criminal liability, whereby the state will be obliged to taken action and file a first information report (FIR). This would mean a massive discouragement for generics companies."

Another crucial clause Japan seeks is patents for naturally-occurring micro-organisms, which already exist in nature and are therefore not inventions but only discoveries.

The IP expert said while the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organisation (WTO) requires patenting of micro-organisms, member states have the flexibility to limit it to modified micro-organisms. "It is important to limit the patentability criteria when it comes to micro-organisms, as it leads to companies being granted patents for products and technologies that make use of the genetic materials, plants, etc, that have long been identified, and used," the expert said.

Industry watchers closely following the Japan-India FTA said negotiations are underway and are likely to be over soon. They said the government hasn’t made any efforts to share information and initiate consultations with parliament or the public. Japan is the second largest pharmaceutical market in the world, behind the US, and is valued at over $60 billion. The Japanese government has been focusing on lowering its healthcare expenditure by increasing the adoption of generics. It has been looking to increase the share of generics in the Japanese pharma industry from 5-6% now to 30% over the next five years.

Between April 2008 and February 2009, India exported drugs worth Rs 305.16 crore, shows data by Pharmaceutical Exports Promotion Council (Pharmexcil), which is under the ministry of commerce and industry.

Despite the implications, the pharma industry doesn’t seem too worried about the Japan-India FTA.

An official at a south India-based drugmaker said the finer details of the agreement are not very clear. A spokesperson for the Mumbai-based Lupin, which acquired Japanese firm Kyowa Pharmaceuticals sometime back, added that the company is confident that any trade agreement between the governments would address the interests of the pharma industry. "Japan is a key market for us, contributing 12% to our total consolidated revenues in 2008-09," the spokesperson said.

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source: DNA