Thursday, August 12, 2010

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,

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

Preliminary Consultation Draft on IPR Chapter of India EU Broad-based Trade and Investment Agreement (April 2010),

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

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

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

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

EU/India trade pact could limit cheap drugs - MSF, 12 March, 2010, Reuters,,_24_Feb_2009