Eli Lilly to settle dispute over drug copies
By Andrew Jack , Financial Times
June 8 2011 01:02
Eli Lilly is poised to make a cash payment to settle a long-running dispute with Indian generic drugmakers over low-cost copies of the US company’s medicines that were impounded within the European Union.
The US-based pharmaceuticals company was one of several innovative drug companies that benefited from a decision by the Dutch authorities to block shipments of low-cost rival generic versions of their products in 2008-09. The seizures at Schipol airport, followed by lengthy legal battles which prevented delivery of the drugs, were triggered by claims that the medicines violated intellectual property rules protecting the patents on the drugs within the EU.
However, the action sparked wide-ranging criticism by health and development
campaigners because the generic versions were simply being trans-shipped via the EU to developing countries where the patents did not apply.
It marked an escalation in the global battles between research-based companies trying to retain monopoly rights to sell patented drugs they have developed at high prices, and generic producers attempting to manufacture and sell them cheaply.
India and Brazil both subsequently launched appeals to the World Trade Organisation, claiming that the Dutch action violated both European and WTO rules governing the trade of medicines. Canada, China, Ecuador, India, Japan and Turkey have since also joined the consultations.
Some Indian generic companies have since retaliated by changing their distribution systems to bypass Europe, causing the Netherlands to attempt to broker a settlement and restore trade levels.
Yusuf Hamied, head of Cipla, the Indian generic producer which had drugs seized including generic versions of Eli Lilly’s psychiatric drug olenzapine destined for Latin America, said he had since diverted trans-shipments with an annual value of $100m away from the EU to Dubai and Johannesburg.
“The Dutch embassy in India has contacted companies with a view to restoring trade,” he said. “Companies involved in this dispute are now approaching Indian companies to settle.”
The European Commission has since launched its own consultation into the dispute and recently claimed proposed revisions to 1383/2003, the relevant regulation, had addressed the problem in dealing with “legitimate medicines in transit”.
But campaigners including Public Citizen, the US medicines watchdog body, have argued that the revisions do not go far enough. Eli Lilly, asked for confirmation of the settlement, told the Financial Times: “Under the requirements of EC Regulation 1383/2003, we are bound by confidentiality that prevents us from commenting.”
The US company was in 2008 on appeal required to compensate 8pm, a Turkish pharmacy, for impounding generic versions of its drugs destined via the UK