India-EU free trade agreement: Impact on generic drugs

Indian generic drugs manufacturers are worried about the intellectual property rights issues and trade interests arising out of the new Indo-European Union (EU) free trade agreement, which may be ready by the end of August 2010 and become effective by the end of this year. The reasonably priced generic drugs, which India exports to many developing and poor countries, may face production and trade difficulties thanks to the Anti-Counterfeit Trade Agreement (ACTA), the World Customs Organisation’s Standards to be Employed by Customs for Uniform Rights Enforcement (SECURE), and the World Health Organisation’s (WHO) International Medical Products Anti-Counterfeiting Task Force (IMPACT) that are part and parcel of the bilateral free trade pact.

It is feared that under the free trade deal, India may be persuaded by the EU to impose greater intellectual property protection on medicines—trade and production rules, which would delay the registration and marketing of generic medicines, and would extend the duration of a patent, reducing competition and making the prices of medicines higher.

In order to boost bilateral commerce, India and the 27-member EU have been negotiating the market-opening pact since June 2007. The ongoing process of negotiation faced initial hiccups when the EU tried to associate trade with climate and India’s social sector performance in areas such as child labour. India was against the inclusion of "extraneous" non-trade issues into the free trade talk.

Although the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) allows patented drugs classified as ‘essential’ or crucial to health to be manufactured in developing countries, under the proposed free trade pact between India and EU that takes into consideration ACTA's rules, there is fear that counterfeit drugs may be considered equivalent to generic drugs.

The EU has, however, proposed a clause in the negotiations to ensure that nothing in the proposed agreement would limit India's freedom to produce and export life-saving medicines in accordance with the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health, notably through compulsory licensing.

Under the "data exclusivity" regime, an Indian company making generic drugs - copies or near-copies of patented products - would be prohibited from availing itself of formulae used to develop a patented medicine for a period of five to nine years. This would result in pushing up the cost of medicine and affect access to cheaper medicines. However, the European Commission on Trade has agreed to take into account the specificities of the Indian legal system, the policy developments on this issue within India, its developing country status and the role it plays with regard to production of essential generics for the developing world.

In the past Indian shipments of generic drugs destined for various African and Latin American nations were seized by the European Union authorities on charges of counterfeiting and patents infringement. Facing India’s opposition, the European Commission on Trade is prepared to propose modifications to the Regulation that may be necessary to clarify the procedures relating to medicines in transit to ensure that generic medicines are not unnecessarily affected when merely transiting the EU. After facing resistance from Doctors Without Borders/ Medecins Sans Frontieres, which depend mostly on Indian generic drugs during its missions, the European Commission took into account the problems arising from the controversial "border protection" measures, under which generic medicines from India got seized at European ports.

Another criticism against the present free trade agreement between India and EU is that the draft has never been in circulation for public consultation. The much famous wikileaks has recently released drafts of the Anti-Counterfeit Trade Agreement (ACTA), which has been opposed by copyleft activists.

Further Readings:

Trade Talks with EU Put Drug Manufacturers on Edge by Keya Acharya, 3 August, 2010, http://ipsnews.net/news.asp?idnews=52360

EU-India FTA negotiations and access to medicines-Questions and answers, European Commision on Trade,

http://trade.ec.europa.eu/doclib/docs/2010/may/tradoc_146191.pdf

http://trade.ec.europa.eu/doclib/docs/2010/may/tradoc_146192.pdf

Preliminary Consultation Draft on IPR Chapter of India EU Broad-based Trade and Investment Agreement (April 2010), http://bilaterals.org/spip.php?article17290

India deal could kill health lifeline by David Cronin, 29 April, 2010,

http://www.atimes.com/atimes/South_Asia/LD29Df01.html

Brazil to object to Dutch seizure of generic drug, 23 January, 2010,

http://www.reuters.com/article/idUSN2327254420090123

India, EU in new bid to clinch free-trade deal, 24 July, 2010,

http://www.bilaterals.org/spip.php?article17753

Will India-EU deal make drugs dearer? by Rema Nagarajan, 27 April, 2010, The Times of India,

http://timesofindia.indiatimes.com/india/Will-India-EU-deal-make-drugs-dearer/articleshow/5861723.cms

EU/India trade pact could limit cheap drugs - MSF, 12 March, 2010, Reuters,

http://www.alertnet.org/thenews/newsdesk/LDE62B18T.htm

http://wikileaks.org/wiki/EU-India_Free_Trade_Agreement_draft,_24_Feb_2009

A Bt cotton led agri-revolution

It is usually believed by the scientific community that transgenic varieties of plants can bring about agri-revolution in the so-called developing and third world countries, which depend on food and developmental aid due to shortages and famines. Biotechnology has made it possible to grow more crops, hence, making countries of the South more self-dependent. Same is the message of a new study titled Bt Cotton in India: A Country Profile by Bhagirath Choudhary and Kadambini Gaur (July, 2010), which shows that small and marginal resource-poor Indian farmers are increasingly adopting Bt cotton so as to derive better yields and more profits. Statistics provided in the report indicates that 5.6 million small and marginal farmers in India during the year 2009 planted and benefited from 8.381 (~8.4) million hectares of Bt cotton, equivalent to 87% of the 9.636 (~9.6) million hectare national cotton crop. The usage of Bt cotton has increased due to better yields, rise in production and reduction in the application of insecticides. Within a span of six years from 2002 to 2008, Bt cotton has generated economic benefits for farmers to the tune of US$ 5.1 billion.

During the last 8 years, application of Bt cotton in India has resulted in doubling of yield from 308 kg per hectare in 2001 to 568 kg per hectare in 2009.

The number of farmers growing Bt cotton hybrid has increased from 50,000 in 2002 to 0.56 crore farmers in 2009. The report tells us that farmers prefer multiple genes over a single gene Bt cotton hybrids because multiple gene Bt cotton hybrids provide additional protection to Spodopetra (a leaf eating tobacco caterpillar) while it also increases efficacy of protection to both American bollworm, Pink bollworm and Spotted bollworm.

The report informs that 65% of India's cotton is grown on dryland and 35% on irrigated lands. In the year 2008, Maharashtra, the largest cotton-growing state, had 2.15 million farmers growing cotton, which occupied approximately 34% of India’s total cotton area.

Due to the conducive biotechnology policies of the government, which allowed private sector participation in R&D and sale of hybrid Bt cotton, area under Bt cotton production in India increased from 50 thousand hectares in 2002 to 8381 thousand hectares in 2009. In 2006-07, India overtook the USA to become the second largest cotton producing country in the world, after China. In 2006, India’s Bt cotton area (3.8 million hectares) exceeded for the first time, that of China’s 3.5 million hectares, the report mentions.

As a result of increased use of Bt cotton, exports of cotton increased from 0.05 million bales in 2001-02 to 3.5 million bales in 2008-09. Due to the boom in cotton production during the last eight years, India could become a net exporter in cotton.

Based on the literature survey of various individual studies, the report paints a rosy picture of how Bt cotton economically benefitted the farmers. The report, however, remains uncritical about the way Bt cotton adversely affected the farmers leading to suicides being committed, and loss of biodiversity. There are studies, which show that yields do not rise necessarily due to growing of Bt cotton. The quality of the cotton grown is poor in the case of Bt cotton. It provides little resistance to Pink bollworm. The economic advantage of growing Bt cotton is over-exaggerated. The present report tries to hide the fact how many of the seed companies are extracting huge royalties by selling the genetically modified seeds at higher prices to our farmers.

Further readings:

Bt Cotton in India: A Country Profile by Bhagirath Choudhary and Kadambini Gaur, July, 2010, http://www.isaaa.org/resources/publications/biotech_crop_profiles/bt_cotton_in_india-a_country_profile/download/Bt_Cotton_in_India-A_Country_Profile.pdf

Background Note on Bt Cotton Cultivation in India, http://www.envfor.nic.in/divisions/csurv/geac/bgnote.pdf

Bt Cotton or Better Cotton? by Kunal Dutt, http://www.ccsindia.org/ccsindia/policy/glob/studies/wp0008.pdf

Bt cotton has failed admits Monsanto by DC Sharma, 6 March, 2010,

http://indiatoday.intoday.in/site/Story/86939/India/Bt+cotton+has+failed+admits

Bt Cotton is a Failure by Dr. Suman Sahai,

http://www.genecampaign.org/Publication/Article/BT%20Cotton/BtCotton-is-failure.pdf

The story of Bt. Cotton in Andhra Pradesh: Erratic Processes and Results (February, 2005), Centre for Sustainable Agriculture (CSA), http://www.grain.org/research_files/Story_of_Bt_Cotton.pdf

An odd royalty calculus by Latha Jishnu, The Business Standard, 24 June, 2010, http://www.business-standard.com/india/news/latha-jishnu-an-odd-royalty-calculus/399194/

Cotton farmers opt for double-gene Bt technology by Harish Damodaran, The Hindu Business Line, 25 July, 2010, http://www.thehindubusinessline.com/2010/07/26/stories/2010072651811300.htm

Farmers earn more from organic cotton: Survey, The Hindu Business Line, 16 June, 2010, http://www.thehindubusinessline.com/2010/06/17/stories/2010061751791700.htm

Bt cotton seed firms tell states to end price control by B Krishna Mohan, The Business Standard, 9 June, 2010, http://www.business-standard.com/india/news/bt-cotton-seed-firms-tell-states-to-end-price-control/397519/

Bt cotton ineffective against pest in parts of Gujarat, admits Monsanto by Priscilla Jebaraj, The Hindu, 6 March, 2010, http://www.hindu.com/2010/03/06/stories/2010030664831400.htm