Targeting the world’s pharmacy

In the wake of US President Barack Obama’s visit to India in January 2015, business moguls in both countries have announced how bullish they are about economic relations between the two countries.

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Published: Sat 21 Feb 2015, 10:37 PM

Last updated: Thu 25 Jun 2015, 7:48 PM

The views of big business tend to be over-optimistic, no doubt because it is good strategy to be so and thereby present ambitious politicians with both tools and excuses. But in the case of the Obama visit, political analysts in India have pointed to two major breakthroughs that appear to vindicate the exuberance of the industry heads — the easing of what was called the “nuclear logjam”, and a big push in defence cooperation.

But there is another subject, which is intellectual property rights and which has a long history of disagreement between the two countries. Less visible in the media hoopla surrounding the Obama visit compared with the tangible items of cooperation, intellectual property (IP) figured prominently during the India-US CEO Forum (which was attended by both Obama and Indian Prime Minister Narendra Modi) and was also referred to in a joint statement issued by the governments of both countries.

The statement has also referred to a proposed bilateral investment treaty, which is being viewed in industry circles as an important building block for expanding the relationship between India and the US. However, generic drug manufacturers in India on the one hand and health activists on the other are anxious about what this means for a country that is known as the ‘pharmacy of the world’.

This is because India is the largest provider of generic high quality medicines at affordable rates to patients within the country as well as other developing countries — in particular those in Africa. This was possible because in the 1970s, faced with patents owned by powerful multi-national companies and prices for medicines which were amongst the highest in the world, India introduced significant changes in its patent law. In particular, it did away with product patents and only preserved process patents. This, along with the industrial policy, gave a huge boost to the Indian generic industry. From being a minor partner to the Western pharmaceutical companies, the Indian generic industry became a dominant force in the market and the pharmacy of the poor across the globe.

It is well-known that the US has been exerting increasing pressure on India to adopt intellectual property measures similar to those common in the US and in the European Union. To raise that pressure was one of the objectives of the recent Obama visit, and the flexibilities in international IP law which allowed Indian generic drug manufacturers to become the pharmacy of the poor are now under attack by the US government, at the behest of their industry. The multi-national pharmaceutical companies (many based in the US and Europe) want to dismantle India’s existing IP regime but also introduce measures detrimental to public interest safeguards allowed presently under Trade-Related Aspects of Intellectual Property Rights (TRIPS) and India’s patent law.

What is most troubling about the Indian government’s apparent willingness to consider favourably the American demand is that any change would only benefit the pharmaceutical MNCs, while severely damaging the Indian generic drugs industry and moreover risking the health of millions of patients. To underline the concerns of many in India and in developing countries, a letter to the US President on the eve of his visit to India signed by health activists around the world reiterated that India’s laws fully comply with the TRIPS Agreement of the World Trade Organisation, and that millions around the world depend on affordable generic medicines that would disappear if India acceded to US proposals. Judging from the content of the joint statements, neither Obama nor Modi read this letter.

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