Is India pulling the leg?

Source: The Asian Age

The Modi government has abandoned the fig leaf of adherence to public health goals… The first salvo was fired by Nirmala Sitharaman, signalling prior to Mr Modi’s visit to the US that India was willing to wash its IP sins

In 2005, during the parliamentary debate on the Patents Amendment Bill, Bharatiya Janata Party leader V.K. Malhotra stated, “The government will be now responsible for the consequences of the bill and the hardships that will heap upon the people”. Senior BJP leaders Murli Manohar Joshi and Yashwant Sinha argued that the new “product patent” regime would deliver a death blow to the Indian generic drug industry and many African nations would be deprived of low cost AIDS drugs. The BJP then was expressing its concerns regarding the switchover to a “product patent” regime mandated by the WTO’s TRIPS Agreement, and its consequences on Indian generic manufacturers and their ability to continue production of low cost versions of new medicines that were patented. But, sitting in the Opposition, their utterances could be seen as a ploy to embarrass the incumbent United Progressive Alliance government. To the latter’s credit, however, the final amendments enacted by the Indian Parliament incorporated many “health safeguards” (higher patentability standards, compulsory licensing, pre and post-grant opposition provisions, etc.) designed to mitigate the impact of TRIPS compliance on patients in India and developing countries. In fact, many commentators have since labeled the Indian Patents Act as a “model law”.

This “model law”, regardless of the fact that it is TRIPS compatible and legally tenable, has, predictably, attracted adverse reactions from big pharmaceutical companies and their host countries in North America and Europe. The US, arguably the most powerful and vocal proponent of its pharma industry, has been particularly active in spewing venom against the Indian law. In its “Special 301” report for 2005, the US Trade representative (USTR) commented: “…the US pharmaceutical industry reports shortcomings in this patent legislation that we hope India will correct… we will monitor closely India’s implementation of the patent amendment…”

India, in fact, has been on the “Priority Watch List” of the USTR since 1979.

The 2014 “Special 301” report particularly singled out for adverse comments the Supreme Court’s decision upholding the denial of a patent to Swiss MNC, Novartis, for the leukemia drug Glivec and the much reviled Section 3(d), and the compulsory license on German MNC Bayer’s patent on the cancer drug, Nexavar.

The relentless pressure from the US has accompanied a continuous change in the discourse regarding intellectual property (IP) protection in India. The incorporation of health safeguards in the Indian Act in 2005 was itself fortuitous a product of the UPA government’s dependence on Left parties at that time. Thus, in a manner, India’s “progressive” patent regime, since its inception, has been out of sync with the consensus among India’s two largest political formations led by the Congress and the BJP respectively to aggressively push for neoliberal reforms. Saddled with a law that the UPA government did not entirely want itself, it never pushed for a complete realisation of the possible benefits of the flexibilities in the Indian act. In nine years, only one compulsory license has been issued. Even Zambia and Zimbabwe have done better! While some higher court judgments have been positive, there is a disquieting trend of courts granting ex-parte injunctions against generic manufacturers for alleged IP infringement, while many patents have been granted in India that shouldn’t have passed the muster of the safeguards in India’s patent law.

The pursuit of neoliberal reforms has also brought about changes in the industrial climate. Indian generic drug companies are increasingly tying up with foreign MNCs, given their interest in developed country export markets. A recent case in point is the voluntary license signed by several Indian companies, including Cipla, with the US-based Gilead Sciences for manufacture and distribution of a Hepatitis C drug, Sofosbuvir. Thirteen years ago Cipla led the charge against Big Pharma and changed the fate of millions of people living with HIV by offering AIDS drugs at a dollar a day. That Cipla chose not to do so in 2014 and instead collaborated with Big Pharma illustrates the sea change in the legal, economic and political environment in the country over the last 15 years.

Given this backdrop, it should come as no surprise that the Narendra Modi-led National Democratic Alliance government has decisively abandoned the fig leaf of adherence to public health goals, which the UPA government had nominally retained. The first salvo was fired by minister of commerce, Nirmala Sitharaman, who on September 8 said, “India does not have an IPR policy… Because India does not have any policy, developed nations are picking holes in India’s IPR laws”. Apart from the minor issue that her reference to India not having an IP policy is ahistoric, the intent was clear — to signal prior to Prime Minister Modi’s visit to the US that India was willing to wash its IP sins and tailor its IP policy based on the concerns of developed nations.

The second salvo before Mr Modi’s sojourn came from an unexpected quarter. On September 22, the ministry of chemicals issued an internal memo cancelling an earlier order (issued on May 29) by the National Pharmaceutical Pricing Authority (NPPA) that placed a ceiling on the prices of several drugs. This directly addresses a long-standing complaint by the US regarding drug price controls being harmful to the commercial interests of its pharmaceutical companies. The government, in its haste to clear the air before Mr Modi’s visit, compromised its position in an ongoing case at the Delhi high court where the NPPA’s order had been challenged by the Organisation of Pharmaceutical Producers of India (OPPI the industry lobby of foreign drug companies). The matter was sub-judice.

The icing on the cake was yet to come. The joint US-India communiqué at the end of

Mr Modi’s visit stated: “Agreeing on the need to foster innovation in a manner that promotes economic growth and job creation, the leaders committed to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the Trade Policy Forum”. Significantly, this sentence is embedded in the section on economic growth, inferring that strong IP protection fosters economic growth. In fact, the evidence is to the contrary. Historically, developed countries have used low standards of IP protection while “catching up” with others in order to achieve parity as regards economic and technological development — the US used this ploy in the late 19th and early 20th century, Japan followed suit in the middle of the last millennium, and Taiwan and South Korea did likewise in the late 20th century. Indian and US interests will continue to be different as regards IP protection, because the two countries are very differently placed as regards development.

The US has always used joint working groups to pressure countries to adopt positions that conform to US interests, and clearly the IP working group will be used for the same purpose. For 35 years, every Special 301 report of the USTR has detailed the sins of omission and commission of India’s IP system. We do not need a working group to understand this, but the US needs the working group to intensify its pressure on India.

The department of industrial policy and promotion of the ministry of commerce, in a hurriedly issued press release on October 3 stated that “India has refused to be subjected to unilateral action proposed by the US under the Special 301 report” and sought to frame the communique as “re-affirmation of India’s stand that issues need bilateral discussion and not unilateral action. The statement on the IPR issue will only strengthen the bilateral institutional mechanism.” This reflects only India’s understanding as, on October 15, the USTR, continuing its “unilateral” actions under the 2014 Special 301 report, announced an out-of-cycle review of India’s IP policies.

Regrettably these are not merely diplomatic machinations at work between two countries jostling for power in a bilateral relationship. At stake, indeed at the very heart of this fraught tale, are patients in three continents who look towards India with hope for medicines that are cheap and effective. The question really is, are we fast reaching a point of no return?

 

 

This entry was posted in Compulsory Licensing, Generics, Hepatitis C, IP Rights, IPR policy, Novartis Case, Out of Cycle Review (OCR), Patents, Right to Health, Sec 3 (d), Sofosbuvir, TRIPS, US pressure on India, USTR 301 report, WTO and tagged , , . Bookmark the permalink.

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