Lancet confirms: Commerce Minister says no to Data Exclusivity in FTA

On the eve of further high-level talks in Brussels on the EU-India FTA, Minister Sharma reaffirmed to The Lancet, “There is no question that we will accept data exclusivity in any [free trade] agreement with any country. On [the] intellectual property rights issue, whatever is discussed has to be in compliance with the TRIPS commitment.” 


India–EU free-trade pact could stifle generics industry

Patralekha Chatterjee

Lancet, Volume 377, Issue 9774   , 14 April 2011

Health activists are concerned that a free-trade pact being negotiated between India and the European Union could hamper the production of generic drugs. Patralekha Chatterjee reports.

India and the European Union (EU) are in the midst of negotiating a Bilateral Trade and Investment Agreement—a market-opening pact that could vastly expand trade between the two in goods, services, and investments. The ambitious deal-in-the-making, however, has come under intense scrutiny for its potentially adverse effect on the health of millions in India and across the developing world.

Whatever the final shape the proposed free-trade agreement (FTA) between India and the EU takes, the ongoing closed-door negotiations have fired up the debate about trade, medical innovation, and public health. Since negotiations kicked off in 2007, protest marches, press conferences, and social media activism have whipped up pressure within and outside India, galvanising the public health community into flagging their two most pressing concerns—access to affordable drugs and access to information.

Now, as negotiators hit the last lap, it looks like the activist’s strategy is working. Two recent events—a belated but public stance by Indian Commerce Minister Anand Sharma against data exclusivity, and a lawsuit by a European watchdog, make the point.

One of the thorniest issues is whether India should tighten its intellectual property rights (IPR) regime for the FTA, specifically on the question of data exclusivity rules, which provide protection of clinical test data submitted to regulatory authorities to prove safety and efficacy of a new drug. If this happens, India’s generic drug makers will have to repeat the innovator companies’ costly and time consuming tests.

There are two sharply divergent points of view. The European Commission (EC) and some of India’s policy makers and industrialists believe that India, an emerging economic power, needs to strengthen its IPR regime to bond better with the world’s largest economy, the EU. Public health advocates, humanitarian aid organisations, civil society groups, as well as Anand Grover, the UN Special Rapporteur on the Right to Health, strongly disagree. They say that data exclusivity might delay or even prevent the registration of, and price competition through, generic drugs. Overall, according to the activists, a tighter IPR regime could bind India to stronger protections than the World Trade Organization’s trade-related aspects of intellectual property rights (TRIPS) agreement requires (so-called TRIPS plus) and not only deprive Indians of access to low-cost, life-saving generic drugs but also threaten India’s pivotal role as the cheap pharmacy of the developing world.

Until 2005, India did not allow patents on pharmaceutical products. Thereafter, it adapted its laws to conform with the World Trade Organization’s intellectual property rules. Products produced before 2005 are still not patentable. India’s generic drugs account for more than 80% of drugs to treat HIV/AIDS. India is also the most important source of generic drugs for cancer and heart disease. The Indian generic industry’s market size is estimated at more than US$20 billion, including exports, according to Dilip Shah, Secretary General of the Indian Pharmaceuticals Alliance (IPA), an association of leading Indian drug companies.

On the eve of further high-level talks in Brussels on the EU-India FTA, Minister Sharma reaffirmed to The Lancet, “There is no question that we will accept data exclusivity in any [free trade] agreement with any country. On [the] intellectual property rights issue, whatever is discussed has to be in compliance with the TRIPS commitment.”

Such statements have lifted the spirits of the activist community and India’s generic drug industry but, with the trust deficit between FTA negotiators and the other side, the response is one of cautious optimism. Médecins Sans Frontières (MSF), which heavily depends on Indian generic drugs for its programmes and has 175 000 HIV-positive people on treatment, has welcomed Minister Sharma’s statement, but Leena Menghaney, a campaigner with MSF India, pointed out that the EU is yet to make a public announcement saying that it has taken data exclusivity off the negotiating text. Paul Cawthorne of MSF’s Campaign for Access to Essential Medicines said: “We urge the minister to maintain this position in free-trade agreements that India will negotiate in the future, including ones being negotiated now with other European trade groups like the European Free Trade Association countries.”

Last month, Shah of IPA had told The Lancet that there were strong differences of opinion between different departments and ministries and the Indian Prime Minister’s Office on provisions like data exclusivity. He alleged that representatives of multinational drug companies have better access than local generic drug manufacturers to the highest levels of political power in New Delhi. When questioned about this allegation, a senior health ministry official, who did not want to be identified, told The Lancet his ministry could not “comment on ongoing negotiations”.

Activists for access to affordable drugs are watching the negotiations carefully. Loon Gangte, president of Delhi Network of HIV Positive People, is happy about the “good news” but there is little doubt that he, along with others, would step up their agitation if there was any backtracking on promises. “For us, affordable medicine is a matter of life and death”, Gangte told The Lancet.

There is some good news for health activists. “The issue of patent term extension is no longer on the table”, EU’s ambassador and head of delegation to India Daniele Smadja wrote to Gangte on Jan 14, this year. She was referring to a proposal to extend the standard life of patents from 20 years to 25 years.

But other issues such as the enforcement measures allowing the seizure of products suspected of infringing IPRs at the Indian border, which could hamper legitimate trade in generic drugs are not yet fully resolved.

Activists say that their opposition to a tighter IPR regime is based on experience, and cite the example of Jordan, where drug prices have risen by about 20% after its FTA with the USA, according to a study done by Oxfam.

Rohit Malpani, a senior campaigns adviser at Oxfam America, said that in Jordan, data exclusivity delayed generic competition for 79% of drugs launched by multinational drug companies between 2002 and mid-2006, which otherwise would have been available in cheaper generic forms. He also pointed out that there has been virtually no foreign direct investment by drug companies into Jordan during this period to develop drugs with local companies.

If the Indian generic drugs industry suffers a blow from the FTA, other countries, such as Thailand, lauded worldwide for its public health system, could be affected. “Indian generic companies have played a critical role in enabling Thailand to effectively execute ‘compulsory licences’ to ensure access to affordable, generic medicines to treat cancer, heart disease, and HIV and AIDS”, Oxfam’s project manager in Thailand Chalermsak Kittitrakul told The Lancet. “Imports from India enable the Thai Government to provide free treatment to patients in the national health insurance programmes, which cover 96% of the population. About 180 000 people living with HIV are now using antiretroviral (ARV) drugs; 45% of these are using Indian ARV drugs.”

There are more than 300 000 Thais who are living with the virus and require the treatment in the future. “If the India-EU FTA was finalised with strict IPR rules, it would not have an immediate negative impact upon the Thai public health system. But over time, the FTA will firstly undermine the development and availability of new generic medicines, and in particular new fixed dose combinations of new first and second line ARV medicines as well as paediatric ARV drugs. India is a strategic country in the context of how rich countries approach FTA negotiations with other developing countries. If the Indian Government agrees to sign an FTA with TRIPS plus IP rules, it will have a ‘domino effect’ that will have a severe, negative impact on other developing countries that are against a TRIPS-plus FTA”, he added.

Although activists are now more hopeful on the IPR front, they are still battling hard to get information about the details of the FTA. In February this year, Corporate Europe Observatory (CEO), a lobby watchdog, hauled the EC to the EU General Court over secrecy during the FTA talks. “Trade negotiations and the way lobbyists try to influence them should be fully transparent. We consider this a prerequisite for a thorough public discussion and a prerequisite for good trade deals that benefit society at large, and not just big business”, Pia Eberhardt of the Brussels-based CEO told The Lancet. “This would at least require that negotiating proposals are published (as they are in the case of World Trade Organisation negotiations, for example) before they are adopted by the European Commission or member states.”

CEO accuses the EC of discriminating in favour of corporate lobby groups in the India–EU FTA talks and thereby violating the EU’s transparency rules. According to a statement it issued, the case concerns some 17 documents, which the Commission sent to industry lobby groups in the EU and India. When CEO asked for the same documents, the EC took months and then sent just about 50% of the information CEO had sought, said Eberhardt.

The EC has argued that the censored information is sensitive, as it concerns the EU’s priorities and strategies in the ongoing trade negotiations with India, and that disclosing this information would undermine the EU’s international relations. “Our main argument is against the privileged access that the Commission grants to corporate lobby groups” during its trade policy making”, says Eberhardt.


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One Response to Lancet confirms: Commerce Minister says no to Data Exclusivity in FTA

  1. Pingback: INDIA UNDER PRESSURE TO GIVE UP ON GENERIC PRODUCTION – FTA NEGOTIATIONS AND NOVARTIS CASE | Don't trade our lives away

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