Newspaper reports are now abuzz with various industry groups’ hustle to lobby before the ‘Modi Government’ on their expectations from the new regime. This includes the pharmaceutical industry too. The reports mention that the industry groups, including some individual companies, have started getting their presentations ready for the ministers and the Prime Minister’s Office as soon as a new government takes charge on May 26, 2014.

Conflicting interests on IP:

While the domestic pharma industry reportedly wants the new Government to take a tough stand on the Intellectual Property (IP) related issues with the United States (US), the MNC lobbyists are raising the same old facade of so called ‘need to encourage innovation’ in India, which actually means, among others, for India to:

• Amend its well-crafted IP regime

• Change patentability criteria allowing product patents for even ‘frivolous innovation’ by scrapping Section 3(d) of the Indian Patents Act

• Introduce Data Exclusivity

• Implement patent linkages

• Re-write the Compulsory Licensing (CL) provisions and not bother at all, even if patented drugs are priced astronomically high, denying access to majority of Indian population.

Interestingly MNC Lobby Groups, probably considering rest of the stakeholders too naive, continue to attempt packaging all these impractical demands on IP with unwavering straight face ‘story telling’ exercises, without specificity, on how well they are taking care of the needs of the poor in this country for patented medicines.

This approach though appears hilarious to many, MNC lobbyists with their single minded purpose on IP in India, keep repeating the same old story, blowing both hot and cold, nurturing a remote hope that it may work someday.

Recent views:

On this score, along with a large number of independent experts from across the world, very recently, even the former Chairman of Microsoft India reportedly advised the new ‘Modi Regime’ as follows:

“While the new government must work hard to make India more business friendly, it must not cave in to pressure on other vital matters. For instance, on intellectual property protection, there is enormous pressure from global pharmaceutical companies for India to provide stronger patent protection and end compulsory licensing. These are difficult constraints for a country where 800 million people earn less than US$ 2 per day.”

The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.” 

Other domestic pharma trade bodies and stakeholder groups in India reportedly expect similar action from the ‘Modi Government’.

Strong India matters:

India is the largest foreign supplier of generic medicines to America, having over 40 percent share in its US$ 30-billion generic drug and Over-The-Counter (OTC) product market.

Thus, expecting that Indian Government would wilt under pressure, the 2014 ‘Special 301 Report’ of the US Trade Representative (USTR) on Intellectual Property Rights (IPR) has retained India on its ‘Priority Watch List’, terming the country as violators of the US Patents Law. It has also raised serious concern on the overall ‘innovation climate’ in India urging the Government to address the American concerns in all the IP related areas, as mentioned above. 

My earlier submission in this regard:

In my blog post of February 5, 2014, I argued that patentability is related mainly to Section 3(d) of the Patents Act. and India has time and again reiterated that this provision and all the sections for invoking CL in India are TRIPS compliant. If there are still strong disagreements in the developed world in this regards, the Dispute Settlement Body of the ‘World Trade Organization (WTO)’can be approached for a resolution, as the WTO has clearly articulated that:

“WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgments. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations.”

Thus, it is quite intriguing to fathom, why are all these countries, including the United States, instead of creating so much of hullabaloo, not following the above approach in the WTO for alleged non-compliance of TRIPS by India?

How should the new Government respond?  – The view of a renowned pro-Modi Economist:

Subsequent to my blog post of February 5, 2014, as mentioned above, a recent article dated March 4, 2014 titled “India Must Call The US’ Bluff On Patents” penned by Arvind Panagariya, Professor of Economics at Columbia University, USA, who is also known as a close confidant of Prime Minister Narendra Modi, stated as follows, probably taking my earlier argument forward:

“Critics of the Indian patent law chastise it for flouting its international obligations under the TRIPS Agreement. When confronted with these critics, my (Arvind Panagariya) response has been to advise them:

• To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.

• But nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now.

• Why?

• There is, at best, a minuscule chance that the USTR will win the case.

• Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.

• Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.

• Even more importantly, it will open the floodgates to the adoption of the flexibility         provisions of the Indian law by other countries.

• Activists may begin to demand similar flexibilities even within the US laws.

On possible actions against India under the ‘Special 301’ provision of the US trade law, Professor Arvind Panagariya argues:

• “Ironically, this provision itself was ruled inconsistent with the WTO rules in 1999 and the US is forbidden from taking any action under it in violation of its WTO obligations.

• This would mean that it couldn’t link the elimination of tariff preferences on imports from India to TRIPS violation by the latter.

• The withdrawal of preferences would, therefore, constitute an unprovoked unilateral action, placing India on firm footing for its retaliatory action.”

US power play on IP continuing for a while:

United States, pressurized by its powerful pharma lobby groups, started flexing its muscle against India for a while. You will see now, how this short video clip captures the American ‘Power Play’ in this area.

Conclusion: 

It is undeniable that there is moderately strong undercurrent in the current relationship between the United States and India, mostly based on differences over the Intellectual Property Rights (IPRs).

The resourceful MNC pharmaceutical lobby groups with immense influence in the corridors of power within the Capitol Hill, are reportedly creating this difference for unfair commercial gain.

All these are being attempted also to blatantly stymieing India’s efforts to ensure access to affordable medicines for a vast majority of the global population without violating any existing treaty commitments, as reiterated by a large number of experts in this area.

Professor Arvind Panagariya reportedly calls it: “The hijacking of the economic policy dialogue between the U.S. and India by pharmaceutical lobbies in the U.S.”

That said, while cordial relationship with the United States in all economic and other fronts must certainly be rejuvenated and adequately strengthened with utmost sincerity, the newly formed Federal Government at New Delhi with Prime Minister Narendra Modi as its bold and strong face, should not hesitate to call the US bluff on IP… for India’s sake.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.