E-DRUG: The Wire: India Assures the US It Will Not Issue CL on Medicines
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[Warning: long message]
by Amit Sengupta
http://thewire.in/2016/03/12/india-assures-the-us-it-will-not-issue-compulsory-licences-on-medicines-24621/
In what is widely being hailed as an extraordinary victory for the
multinational pharmaceutical industry over the Indian government, the
US-India Business Council (USIBC), in its submission to the United States
Trade Representative (USTR), reports that the Indian government has
'privately assured' the industry that it would not use compulsory licences
(CLs) for commercial purposes. Since it came to power in 2014, it has been
speculated that the NDA government is keen to accommodate objections of the
USTR and the US based pharmaceutical industry regarding the use and
implementation of a number of health safeguards in domestic laws on
intellectual property rights designed to promote affordable access to
medicines in India.
We now have confirmation that the government is willing
to travel the extra mile in order to placate the US and that the Big
Pharma's vicious campaign after the first CL was granted in India has been
a success.
Striking at the heart of India's Patent Act
Mukesh Aghi, president of the USIBC that claims to represent 'more than 350
of the largest global companies investing in India', writes in his submission
to the office of the USTR
<http://www.regulations.gov/contentStreamer?documentId=USTR-2015-0022-0034&attachmentNumber=2&disposition=attachment&contentType=pdf>
on February 5, 2016, 'Overall, the U.S.-India Business Council believes there
have been important developments related to the Intellectual Property
policy in the last 12 months in India that have paved the way for
substantive improvement in India's IP environment'. He further adds, 'the
level and frequency of engagement between the U.S. and Indian governments
was encouraging and many have noted that they had not seen this level of
engagement with the Government of India before'.
Aghi goes on to compliment Prime Minister Narendra Modi for 'several public statements reaffirming his commitment to a strong and robust intellectual property regime'
and also notes with approval that '(the) Government of India has denied several
compulsory license applications'. Particularly disturbing is his assertion
that 'the Government of India has privately reassured India would not use
Compulsory Licenses for commercial purposes'.
Curiously, David Hirschmann, the senior vice president of the US Chamber of Commerce, uses exactly the same phrase regarding 'private reassurance' in his submission to the USTR
<http://www.regulations.gov/contentStreamer?documentId=USTR-2015-0022-0026&attachmentNumber=1&disposition=attachment&contentType=pdf>
.
That these are not isolated reactions becomes clearer when similar
sentiments are echoed in the deposition by Patrick Kilbride
<http://www.regulations.gov/contentStreamer?documentId=USTR-2015-0022-0026&attachmentNumber=2&disposition=attachment&contentType=pdf>
of
the US Chamber of Commerce's Global Intellectual Property Centre. Kilbride
in his deposition to the USTR on March 1, 2016 notes, 'The U.S. and Indian
governments have re-opened a formal dialogue through the bilateral Trade
Policy Forum, with the creation of an Intellectual Property Working Group
as a core element'. He goes on to say, 'The election of Indian Prime
Minister Sri Narendra Modi in 2014 provided an important opportunity to
re-establish a collaborative and productive working relationship on
intellectual property issues between India and the United States'.
One may legitimately ask if it is bad news that the US and India are
talking to each other. The issue is not that they are talking but what the
substance of their talks indicate. Let us not forget that the US and India
are traditional adversaries in the area of IP protection and India has been
on the USTR's Special 301 'watch list' for over a quarter of a century
<https://ustr.gov/sites/default/files/1989%20Special%20301%20Report.pdf>\.
In such a situation, a 'private' assurance that compulsory licences will be
denied is abject surrender, not dialogue. The compulsory licensing
provisions in the Indian Patents Act
<http://ipindia.nic.in/ipr/patent/eversion_actrules/sections-index.htm>
are a critical part of India's attempt to prevent monopolies and assure access
to new medicines of public health importance. A compulsory license allows
domestic companies to produce cheaper generic versions of drugs under the
patent monopoly of MNCs (many of them US based). When CL provisions are
used, prices decreases can range from 50% to 97%
<http://www.citizen.org/documents/CL%20chart%20short%20version-final.pdf>,
resulting in massive cost savings to governments and
patients, and a significant increase in the number of patients able to
access the medicines. This is the option, embedded in our national law,
which is being gifted away by the 'private assurances'.
It is a disingenuous attempt to strike at the very heart of the legislative intent
embodied in the Indian Patents Act.
*Why is compulsory licensing important?*
A recent study <http://www.isid.org.in/pdf/WP170.pdf> identified 140
patented products being marketed in India. Information about if they were
manufactured in India was available for 92 products, but only four of these
were manufactured in India and the remaining 88 were being imported. Thus,
we see a growing trend of imported drugs forming a significant portion of
the domestic market. The table below provides the prices of some of these.
Page 14 of the following publication by Sudop Chaudhuri
<http://www.isid.org.in/pdf/WP170.pdf>
provides a list of Cost of patented protected drugs available in India but not made in India
Attempts to regulate the prices of these patented medicines have yet to
bear fruit.
A 'Committee on Price Negotiation of Patented Drugs' was set up
to recommend ways in which the prices of patented drugs could be controlled.
The committee's report
<https://www.pharmamedtechbi.com/~/media/Supporting%20Documents/Pharmasia%20News/2012/August/India%20Patent%20Drug%20Pricing%20Report.pdf>,
submitted in 2013, suggested the ceiling prices of patented drugs be fixed
by factoring in their prices in a select group of reference countries (a
practice known as reference pricing), and the comparative per-capita GNP of
India and the reference countries. No headway has been made since as the
industry, especially the Organisation of Pharmaceutical Producers of India
(OPPI) - representing drug MNCs in India - has opposed the formula
suggested. Concerns have also been raised that reference pricing would push
up costs enormously given that patented drugs are exorbitantly priced in
all countries and have no relation to real manufacturing costs.
The best method of controlling the prices of patented drugs would be by
breaking the monopoly of the patent holder through the grant of CLs to
domestic generic manufacturers.
The 'assurance' to eschew the grant of compulsory licences for 'commercial' use is at variance with the Make in India rhetoric of the current government
<http://www.makeinindia.com/sector/pharmaceuticals> .
The Indian generic industry, now a 200,000 crore rupees
commercial enterprise, was a product of the Patents Act of 1970
<http://ipindia.nic.in/ipr/patent/patent_Act_1970_28012013_book.pdf>,
which rejected the high patent protection enshrined in the British patent regime
and did not allow patents on pharmaceutical products.
Since 2005, with the implementation of the India's commitments under the World Trade
Organisation's Agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS), India now grants 20-year product patents on pharmaceuticals.
The TRIPS Agreement incorporates the right of all WTO members including
India, to issue CLs on any grounds, a right that was re-iterated in the 2001
Doha Declaration on TRIPS and Public Health
<https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm>
that was signed by all WTO members, including the US thus: 'Each member has the
right to grant compulsory licences and the freedom to determine the grounds
upon which such licences are granted.'
By promising not to grant CLs for commercial purposes, the only possible
lifeline to keep the domestic industry competitive and capable of
challenging the monopoly power of foreign companies over patented medicines
is sought to be denied.
Possibly this is a sneak peek into the real intentions of the Make in India campaign - opening up Indian infrastructure and technological capacities for foreign companies to exploit our cheap labour and lax regulations, and repatriate super profits to their home
countries.
The Indian Patents Act provides clearly that CLs can be issued if commercial activities in India are prejudiced.
Clause 84.7 a (iv) states: 'the reasonable requirements of the public shall be deemed not to
have been satisfied if the establishment or development of commercial
activities in India is prejudiced'.
International legal experts have confirmed that CLs can indeed be issued to ensure local working of a patent.
Compulsory Licence provisions remain unused
It is noteworthy that the CL provisions in the Indian law have remained
virtually unused and only one CL has been issued till date. In contrast,
several low income countries - Zambia, Zimbabwe, Eritrea, Ghana, Mozambique - have issued CLs to promote the access to high-priced patented medicines.
The only CL issued in India (to NATCO in 2012 for Sorafenib, an anti-cancer drug marketed by Bayer as Nexavar) indicates the power of a CL. NATCO's price for Sorafenib is 8,800
rupees for a month's treatment, in contrast to 2,80,000 rupees for Nexavar.
Although several patented drugs have started entering the Indian market,
there have been few CL applications. Intuitively this would indicate a link
between the new strategy of domestic Indian companies to 'collaborate'
rather than to 'oppose' pharmaceutical MNCs.
In large measure, this is related to the chilling effect of the government's overt manoeuvre directed at appeasing foreign drug companies and the USTR. As submissions to the
USTR indicate, CL applications are being actively discouraged, especially
over the last two years.
The most recent case is the denial of a CL
<http://www.ipindia.nic.in/iponew/compulsoryLicense_Application_20January2016.pdf>
for anti-diabetic drug Saxagliptin.
Abandoning popular consensus to safeguard public health
The pursuit of market-based reforms has 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.
While domestic demand for medicines has stagnated due to poor
public investment in healthcare, the major source of expansion for large
Indian companies is this export market in the EU and the US. Given this
backdrop, it should come as no surprise that the present government appears
bent on decisively abandoning the earlier consensus of adherence to public
health goals, which the previous UPA government had nominally retained.
The latest revelation on the 'private assurances' is another link in a long
chain of events heralded by the installation of the NDA government. The
shift in stance of the Indian government's policy towards IP was signaled
by the joint communique
<https://www.whitehouse.gov/the-press-office/2014/09/30/us-india-joint-statement>
at the end of Modi's visit to the US in 2014, which agreed 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'.
In January 2015, the government unveiled its Draft Intellectual Property Policy
The draft policy enunciates a vision that proactive promotion of IP
protection is in harmony with India's developmental goals and claims that
it is designed to 'Stimulate large corporations, both Indian and foreign,
that have R&D operations, to create, protect and utilize IP in India'.
Nary a mention of the possible negative effective of strong IP protection on the
access to health services and other basic needs, or of the benefits of open
innovation systems and non-exclusive licences.
India is now perched on a slippery slope where decades of effort to promote
a liberal IP regime, which allowed easier access to medical products,
stands to be frittered away. It will really be a sad day for millions
across the world if India continues to walk this talk and succumbs to the
designs of Big Pharma. At stake are poor patients in three continents, who
look towards India with hope for medicines that are cheap and effective.
Surely 'national interest' demands that public health be privileged over
the interests of foreign governments and foreign corporations.
Amit Sengupta is Associate Global Co-ordinator,
People's Health Movement.
Shailly Gupta
MSF Access Campaign
New Delhi
Shailly <shailly.17@gmail.com>