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Reverberations Around The Proposed New IPR Policy Of India

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“If the Obama administration succeeds in forcing India to strengthen its patent laws, the change would harm not only India and other developing countries; it would also enshrine a grossly corrupt and inefficient patent system in the US, in which companies increase their profits by driving out the competition – both at home and abroad. After all, generic drugs from India often provide the lowest-cost option in the US market once patent terms have expired.”

The above sharp, piercing and precise comment did not come from any health activist from India or elsewhere. It came from a team of highly credible academic experts working in the United States.

On February 10, 2015, Nobel Laureate in Economics – Joseph E. Stiglitz, who is also University Professor at Columbia University, former Chairman of President Bill Clinton’s Council of Economic Advisers and Chief Economist of the World Bank, made this comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’.

The article is co-authored by Dean Baker, Co-Director of the Center for Economic and Policy Research in Washington DC and Arjun Jayadev, Professor of Economics at the University of Massachusetts, Boston.

The authors arrived at the above conclusion based on some sound arguments. I am highlighting below some of those important ones (may not be in the same order):

  • A patent that raises the price of a drug a hundred-fold has the same effect on the market as a 10,000 percent tariff.
  • India’s Patents and Act and policies allow drugs to be sold at a small fraction of the monopoly prices commanded by patent holders. For example, the Hepatitis-C drug Sovaldi is sold for US$84,000 per treatment in the US; Indian manufacturers are able to sell the generic version profitably for less than US$1,000 per treatment.
  • The threat of competition from Indian generics is partly responsible for major pharmaceutical companies’ decision to make some of their drugs available to the world’s poor at low prices. If the US compels India to tighten its patent rules substantially, so that they resemble US rules more closely, this outcome could be jeopardized.
  • Multilateral approach, using the World Trade Organization (WTO), has proved less effective than the major multinational pharmaceutical companies hoped, so now they are attempting to achieve this goal through bilateral and regional agreements.
  • In the view of America’s pharmaceutical industry, TRIPS did not go far enough. The Indian government’s desire to enhance its trade relations with the US thus provides the industry an ideal opportunity to pick up where TRIPS left off, by compelling India to make patents easier to obtain and to reduce the availability of low-cost generics.
  • In September 2014, during his visit to the US, Indian Prime Minister Narendra Modi agreed to establish a working group to reevaluate the country’s patent policy. The US participants in that group will be led by the Office of the US Trade Representative, which serves the pharmaceutical companies’ interests, rather than, say, the National Academy of Sciences, the National Science Foundation, or the National Institutes of Health.

Any comparable voice in favor of changes in Indian Patents Act?

I don’t seem to have heard or read as strong arguments from as credible sources as Nobel Laureate Joseph E. Stiglitz, Dean Baker and Arjun Jayadev – the authors of the above article, in favor of the changes that American pharma companies want in the Indian Patents Act.

India at the center stage in IPR debate:

In the IPR debate, India is continuously being seen at the center stage for various reasons. The key one being the size, scale and economic efficiency that the home grown Indian pharma players have attained to cater to the needs of a large number of global population, including those residing in the United States and Europe, with a wide range of high quality generic drugs at affordable prices.

Fast evolving scenario:

It is now absolutely clear that being rattled by several refusals of India’s granting product patent to very similar molecules with minor tweaking under section (3d) of the country’s Patents Act, together with the nation’s uprightness in issuing Compulsory License (CL) for an enormously expensive cancer drug reducing its price by over 95 percent, United States now intends to directly intervene into India’s IPR policy environment.

As Nobel Laureate Stiglitz wrote, keen desire of the new dispensation of the Indian government to enhance its trade relations with the US has provided a golden opportunity to American pharma companies and their paid lobbyists to jump into the fray. They have started exerting enormous pressure on their own Government to compel India, at bilateral discussions, dilute its well-balanced Patents Act, ignoring India’s sovereign right to play by the flexibilities as provided by the WTO to protect public health interest in the country.

Both the domestic and international civil society organizations, including public health activists have expressed their serious concerns on this aggressive intent of US and India’s seemingly vulnerable position in this regard.

“The US is pushing India to play by its rules on Intellectual Property, which we know will lead to medicines being priced out of reach for millions of people,” commented the Executive Director of MSF’s Access Campaign, according to media reports.

Non-pharma American Organizations reacted differently:

14 American organizations in a letter to their President Barack Obama dated January 20, 2015, just prior to his visit to India, asked him “to support India’s central role in providing high-quality, low-cost generic medicines -which are essential for health care around the world. Recent U.S. policy stances have sought to topple parts of India’s intellectual property regime that protect public health in order to advance the interests of multinational pharmaceutical corporations in longer, stronger, and broader exclusive patent and related monopoly rights. India’s laws fully comply with the WTO TRIPS Agreement. Millions around the world depend on affordable generic medicines that would disappear if India acceded to these proposals, including many beneficiaries of US-funded programs. Instead of using your trip to promote the narrow interests of one segment of the pharmaceutical industry, we ask you to support the interests of people who need affordable medicines, whether they live in the U.S., in India, in Africa or elsewhere. Our world is safer and healthier because of India’s pro-health stance and we ask you to say so publicly while you are there.”

The letter re-emphasized at the end:

“From Detroit to New Delhi, health is increasingly interconnected. Our world is safer when it is healthier, and it is healthier because India’s laws appropriately balance health and IP.” 

An interesting development:

It is interesting to note that after Winter Session of the Indian Parliament, the Modi Government announced a number of important policy changes at the end of December 2014.

Interestingly, one more critical policy – National Intellectual Property Rights (IPR) Policy has been left open for public comments and the final IPR Policy is yet to be announced despite enormous American pressure on India in this regard.

Without any specifics, the first draft of the National IPR policy just states that India will “review and update IP laws, where necessary, and remove anomalies and inconsistencies, if any.”  It does emphasize though, the need of “more innovation” in the country, unequivocally and quite justifiably.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

It is generally believed that the National Intellectual Property Rights (IPR) Policy is undoubtedly a positive step to clarify the Government’s stand in maintaining a balanced IP regime in the country that would encourage innovation to add speed to the progress of the nation.

In just 10 years Indian IPR regime has, by and large, attracted enormous global attention mostly for balancing IP and public health interest, admirably. Experts like Nobel laureate Joseph E. Stiglitz sincerely hope that India will not change this course under pressure of any kind or form.

Be that as it may, several recent media reports also speculated, around the same time, that Government of India is probably considering putting in place ‘Data Exclusivity’ and ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act of the country.

In my subsequent articles in this blog, I shall deliberate on these two contentious issues, keeping the evolving scenario in perspective.

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.

New “National IPR Policy” of India – A Pharma Perspective

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Whether under pressure or not, is hardly of any relevance now. What is relevant today is the fact that the new Indian Government, almost in a record time of just around two months, has been able to release a high quality first draft of an important national policy for public discourse.

In October 2014, the Department of Industrial Policy and Promotion (DIPP) constituted a six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan to draft the ‘National IPR Policy’ of India and taking quick strides, on December 19, 2014, released its first draft of 29 pages seeking stakeholders’ comments and suggestions on or before January 30, 2015. A meeting with the stakeholders has now been scheduled on February 5, 2015 to take it forward.

A quick glance at the Draft IPR Policy:

The proposed ‘Mission Statement’ as stated in the draft “National IPR Policy” is:

“To establish a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and to accelerate economic growth, employment and entrepreneurship.”

Specifying its vision, mission and objectives, the draft policy suggests adopting a catchy national slogan to increase IP awareness: ‘Creative India; Innovative India’ and integrating IP with “Smart cities”, “Digital India” and “Make in India” campaigns of the new Government.

The ‘Think Tank’ dwells on the following seven areas:

  • IP Awareness and Promotion
  • Creation of IP
  • Legal and Legislative Framework
  • IP Administration and Management
  • Commercialization of IP
  • Enforcement and Adjudication
  • Human Capital Development

In the policy document, the ‘Think Tank’ has discussed all the above seven areas in detail. However, putting all these in a nutshell, I shall highlight only three of those important areas.

1. To encourage IP, the ‘Think Tank’ proposes to provide statutory incentives, like tax benefits linked to IP creation, for the entire value chain from IP creation to commercialization.

2. For speedy redressal of patent related disputes, specialized patent benches in the high courts of Bombay, Calcutta, Delhi and Madras have been mooted. The draft also proposes creation of regional benches of the IPAB in all five regions where IPOs are already located and at least one designated IP court at the district level.

3. The draft concludes by highlighting that a high level body would monitor the progress of implementation of the National IP Policy, linked with performance indicators, targeted results and deliverables. Annual evaluation of overall working of the National IP Policy and quantification of the results achieved during the period have also been suggested, along with a major review of the policy after 3 years.

Although the National IPR policy cuts across the entire industrial spectrum and domains, in this article I shall deliberate on it solely from the pharmaceutical industry perspective.

Stakeholders’ keen interest in the National IPR Policy – Key reasons:

Despite full support of the domestic pharmaceutical industry, the angst of the pharma MNCs on the well-balanced product patent regime in India has been simmering since its very inception, way back in 2005.

A chronicle of recent events, besides the seven objectives of the IPR policy as enumerated above, created fresh general inquisitiveness on how would this new policy impact the current pharmaceutical patent regime of India, both in favor and also against.

Here below are examples of some of those events:

  • At a Congressional hearing of the United States in July 2013, a Congressman reportedly expressed his anger and called for taking actions against India by saying:

“Like all of you, my blood boils, when I hear that India is revoking and denying patents and granting compulsory licenses for cancer treatments or adopting local content requirements.”

This short video clipping captures the tone and mood of one such hearing of the US lawmakers.

  • On April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘Priority Watch List Country’. Placement of a trading partner on the ‘Priority Watch List’ or ‘Watch List’ indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.
  • It further stated that USTR would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern. An OCR is a tool that USTR uses on adverse IPR issues and for heightened engagement with a trading partner to address and remedy in those areas.
  • “India misuses its own IP system to boost its domestic industries,” commented the US Senator Orrin Hatch while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) of US Chamber of Commerce on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30. The main reasons for the low score in the report were cited as follows:

-       India’s patentability requirements are (allegedly) in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.

-       Non-availability of regulatory data protection

-       Non-availability of patent term restoration

-       The use of Compulsory Licensing (CL) for commercial, non-emergency situations.

Based on this report, US Chamber of Commerce urged USTR to classify India as a “Priority Foreign Country”, a terminology reserved for the worst IP offenders, which could lead to trade sanctions.

  • In the midst of all these, international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

  • Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma trade associations globally, has reportedly urged the US government to continue to keep its pressure on India in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too. Interestingly, as reported in the media a senior representative of this lobby group would be India when President Obama visits the country later this month.
  • In view of all these concerns, during Prime Minister Narendra Modis’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.
  • Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.
  • However, the domestic pharma industry of India, many international and national experts together with the local stakeholders continue to strongly argue against any fundamental changes in the prevailing patent regime of India.

A perspective of National IPR Policy in view of Pharma MNCs’ concerns:

I shall now focus on four key areas of concern/allegations against India on IPR and in those specific areas what has the draft National IPR Policy enumerated.

- Concern 1: “India’s patentability requirements are in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.”

Draft IPR Policy states: “India recognizes that effective protection of IP rights is essential for making optimal use of the innovative and creative capabilities of its people. India has a long history of IP laws, which have evolved taking into consideration national needs and international commitments. The existing laws were either enacted or revised after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial pronouncements provide a stable and effective legal framework for protection and promotion of IP.”

A recent vindication: Just last week (January 15, 2015), Indian Patent Office’s (IPO’s) rejection of a key patent claim on Hepatitis C drug Sovaldi (sofosbuvir) of Gilead Sciences Inc. further reinforces that India’s patent regime is robust and on course.

Gilead’s patent application was opposed by Hyderabad based Natco Pharma. According to the ruling of the IPO, a new “molecule with minor changes, in addition to the novelty, must show significantly enhanced therapeutic efficacy” when compared with a prior compound. This is essential to be in conformity with the Indian Patents Act 2005. Gilead’s patent application failed to comply with this legal requirement.

Although Sovaldi ((sofosbuvir) carries an international price tag of US$84,000 for just one treatment course, Gilead, probably evaluating the robustness of Sovaldi patent against Indian Patents Act, had already planned to sell this drug in India at a rice of US$ 900 for the same 12 weeks of therapy.

It is envisaged that this new development at the IPO would prompt entry of a good number of generic equivalents of Sovaldi. As a result, the price of sofosbuvir (Sovaldi) formulations would further come down, despite prior licensing agreements of Gilead in India, fetching huge relief to a large number of patients suffering from Hepatitis C Virus, in the country.

However, reacting to this development Gilead has said, “The main patent applications covering sofosbuvir are still pending before the Indian Patent Office…This rejection relates to the patent application covering the metabolites of sofosbuvir. We (Gilead) are pleased that the Patent Office found in favor of the novelty and inventiveness of our claims, but believe their Section 3(d) decision to be improper. Gilead strongly defends its intellectual property. The company will be appealing the decision as well as exploring additional procedural options.”

For more on this subject, please read my blog post of September 22, 2014 titled, “Gilead: Caught Between A Rock And A Hard Place In India”

- Concern 2: “Future negotiations in international forums and with other countries.”

Draft IPR Policy states: “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.”

- Concern 3: “Data Exclusivity or Regulatory Data Protection.”

Draft IPR Policy states: “Protection of undisclosed information not extending to data exclusivity.”

- Concern 4: “Non-availability of patent term restoration, patent linkage, use of compulsory licensing (CL) for commercial, non-emergency situations”.

Draft IPR Policy: Does dwell on these issues.

I discussed a similar subject in my blog post of October 20, 2014 titled, “Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?”

Conclusion: 

Overall, the first draft of the outcome-based model of the National IPR Policy appears to me as fair and balanced, especially considering its approach to the evolving IPR regime within the pharmaceutical industry of India.

The draft policy though touches upon the ‘Utility Model’, intriguingly does not deliberate on ‘Open Source Innovation’ or ‘Open Innovation’.

Be that as it may, the suggested pathway for IPR in India seems to be clear, unambiguous, and transparent. The draft policy understandably has not taken any extreme stance on any aspect of the IP. Nor does it succumb to high voltage power play of the United States and its allies in the IPR space, which, if considered, could go against the public health interest.

It is heartening to note, a high level body would monitor the progress of implementation of the National IPR Policy, which will be linked with performance indicators, targeted results and deliverables. Annual evaluation of the overall working of the policy and the results achieved will also be undertaken. A major review of the policy will be done after 3 years.

That said, pharma MNCs in general, don’t seem to quite agree with this draft policy probably based purely on commercial considerations, shorn of public health interest. It is quite evident, when a senior lobbyist of a powerful American pharma lobby group reportedly commented to Indian media on the draft National IPR Policy as follows:

“Real progress will only be achieved when India demonstrates through policy change that it does indeed value the importance of intellectual property, especially for the innovative treatments and cures of today and tomorrow”.

It appears, India continues to hold its stated ground on IPR with clearly enunciated policy statements. On the other hand MNCs don’t stop playing hardball either. Though these are still early days, the question that floats on the top of mind: Who would blink first?…India? Do you reckon so?

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.

 

“India is The Biggest Battlefield for Intellectual Property Rights”

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The US Senator Orrin Hatch reportedly made the above comment while introducing the 2014 report on ‘International Intellectual Property (IP) Index’, prepared by an Israel based consultancy firm – Pugatch Consilium for the Global Intellectual Property Centre (GIPC) of the US Chamber of Commerce. In this forum, the Senator further alleged, “India misuses its own IP system to boost its domestic industries”.

Similar comment on South African IP Policy:

It is interesting to note that this ‘Battle Cry’ on IPR follows almost similar belligerent utterance of a Washington DC-based lobbying firm named ‘Public Affairs Engagement (PAE)’, reportedly headed by a former US ambassador Mr. James Glassman.

PAE, in a recent South African IP policy related context, as deliberated in my earlier blog titled, “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, had stated in January 2014, “Without a vigorous campaign, opponents of strong IP will prevail, not just in South Africa, but eventually in much of the rest of the developing world.”

The GIPC report:

That said, in the GIPC report, India featured at the bottom of 25 countries on Intellectual Property (IP) protection with a score of 6.95 out of 30. Thailand, Vietnam, Indonesia and Argentina also scored low in overall ranking on protection for patents, copyright and trademarks. The United States ranked at the top, followed closely by Britain and France.

Interestingly, no country could register a “perfect” score in the survey, which used 30 factors ranging from levels of counterfeiting and piracy to patents and legal protections for all kinds of products and services ranging from pharmaceuticals to software to Hollywood films.

Among other BRIC countries, Russia with a score of 13.28, China with 11.62 and Brazil with 10.83, ranked 13th, 17th and 19th, respectively, within the selected 25 countries.

Key reasons, especially related to pharmaceuticals, as cited for the poor rating of India are as follows:

  • “Patentability requirements in violations of TRIPS”
  • “Regulatory Data Protection (RDP) not available”
  • “Patent term restoration not available”
  • “Use of Compulsory Licensing (CL) for commercial non-emergency situation”

The ground reality in India:

The answers to all these questions are much discussed and now an integral part of Indian Patents Act, as enacted by the Parliament of the country after prolong deliberations by the astute lawmakers keeping patients’ interest at the center.

As I had indicated earlier, there does not seem to be any possibility of these laws getting amended now or in foreseeable future, despite the above ‘Battle Cry’, Special 301 Watch List of the US, and continuous poor rating by the US Chamber of Commerce. This is mainly because of humanitarian sentiments attached to this issue, which are robust and sensitive enough to ignore even politically in India. Let me try to address all these 4 points briefly as follows:

“Patentability requirements in violations of TRIPS”:

Patentability is related mainly to Section 3(d) of the Patents Act. India has time and again reiterated that this provision is TRIPS compliant. If there are still strong disagreements in the developed world, the Dispute Settlement Body of the ‘World Trade Organization (WTO)’can be approached for a resolution, as the WTO has clearly articulated as follows:

“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 challenging to fathom, why those countries, instead of creating so much of hullabaloo, are not following the above approach in the WTO for the so called ‘patentability’ issue in India?

“Regulatory Data Protection (RDP) not available”:

In this context, Commerce and Industry Minister Anand Sharma had reportedly asserted earlier at a meeting of consultative committee of the Parliament as follows:

“India does not provide data exclusivity for pharmaceuticals and agro-chemicals which is in the paramount interest of our generic pharmaceutical industry as grant of data exclusivity would have considerable impact in delaying the entry into the market of cheaper generic drugs.”

Hence, the question of having RDP in India does not possibly arise, at least, in near to mid term, which would require moving an amendment in the relevant Act through the Parliament.

“Patent term restoration not available”:

Again, this provision does not exist in the Indian Patents Act. Hence, in this case too, a change does not seem likely, at least, in near to mid term, by bringing an amendment through the Parliament.

“Use of Compulsory Licensing (CL) for commercial non-emergency situation”:

Besides situations like, national emergency or extreme urgency, the current CL provisions, as per the Indian Patents Act, specifically state that at any time after the expiration of three years from the grant of patent, any interested person may make an application to the Patent Controller for grant of patent on the following grounds:

  • Whether the reasonable requirements of the public with respect to the patented invention have been satisfied?
  • Whether the patented invention is available to the public at a reasonable affordable price?
  • Whether the patented invention is worked in the territory of India?

It is worth mentioning, the Government has no authority to direct any individual for not applying for any CL under the above provision of the statute, hence law will take its own course in this area too, unless an amendment through Parliament is made in the Patents Act, which seems very unlikely again in the near to medium term.

Eyebrows raised on methodology and motive behind the ‘IP Index’ report:

Media report indicates that IP experts in India have questioned the methodology and even the motive behind GIPC’s ‘International Intellectual Property (IP) Index’ where India has been ranked the lowest among 25 countries.

The same article quotes a well-known IP expert saying, “Underlying this report is a major paradox that protecting weak patents makes the IP regime a strong one. Countries such as India that have stood up for genuine innovation and refused to protect trivial inventions have been accused of having ‘weak’ IP regimes, while it should have been the other way round.”

The article also mentions that Pugatch Consilium, which provides advisory services to top global drug makers and their trade associations, drafted the report for the US Chamber of Commerce.

Conclusion:

Keeping aside the strong allegation that the GIPC report has some ulterior motive behind, the high profile PR blitzkrieg of the pharma multinational trade associations, quite in tandem with South African outburst on the same IP issue, as I wrote in my blog post “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, is indeed noteworthy.

However, even if one goes purely by the merits of the report with GIPC’s reasoning on ‘Why is India losing ground’, I reckon, despite so much of cost-intensive efforts and pressures by the global pharma lobbying groups, their expectation for a change in the pharma patents regime in India, any time soon, is probably much more than just a wishful thinking.

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.

 

Counterfeit Drugs and ACTA: Should the global menace related to ‘Public Health and Safety’ be mixed-up with Intellectual Property Rights?

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Here in this article, I am talking about drugs or medicines, which you may ultimately land up into buying, quite innocently though, against your doctor’s prescriptions, without having an inkling that these drugs can push you into serious health hazards, instead of addressing your ailments, as your doctor would have desired to.

These are ‘Counterfeit’, ‘Fake’, ‘Spurious’ or ‘Sub-standard’ drugs, in whatever name we may call them. Such substances in the guise of drugs are therapeutically harmful for the patients and are a global menace. This needs to be addressed urgently and with a military precision.

However, public health policy experts have been arguing since long that the issues of such dimension related to critical ‘Public Health and Safety’ needs to be addressed expeditiously by all concerned with focus, without mixing it up with any other commercial considerations or IP related matter, as is being done by some vested interests across the world. India, in this case as well, is of course no exception.

Some reports:

Following are examples of some reports regarding deliberations on this critical issue:

  • A new study published recently in ‘The Lancet’ reported that 7% of anti-malarial drugs tested in India are of poor quality and many were found fake.
  • A February, 2012 report of ‘The National Initiative against Piracy and Counterfeiting’ of FICCI highlighted that the share of fake/counterfeit medicines is estimated at 15% – 20% of the total Indian pharmaceutical market.
  • Another recent report of the US Customs and Border Protection highlighted, “India and Pakistan both made it to top 10 source countries this year due to seizures of counterfeit pharmaceuticals. Pharma seizures accounted for 86% of the value of IPR seizures from India and 85% of the value of IPR seizures from Pakistan.”

However, in this context, it is worth mentioning that the Indian Pharmaceutical Industry along with the Government has been continuously questioning the original source of fake drugs with prominent ‘made in India labels’ on the outer packaging material. It will not be difficult for many to recall that a couple of years ago consignments of ‘counterfeit or fake drugs’ wearing ‘made in India’ labels were confiscated by the drug regulator of Nigeria (Africa), which after a thorough investigation were found to have originated from China.

A contrarian report – CDSCO Survey:

Central Drugs Standard Control Organization (CDSCO) of the Government of India released the following details on ‘Counterfeit Drugs’ in India from 2006 to 2010, which shows that the issue is not as acute as it is shown above:

Year Drugs samples tested % of sub-standard drugs % of spurious drugs Prosecution for crime Persons arrested
2006 – 07

34738

5.8

0.22

115

12
2007 – 08

39117

6.2

0.19

120

122
2008 – 09

45145

5.7

0.34

220

133
2009 -10

39248

4.95

0.29

138

147

TOTAL

158248

5.66

0.26

593

414

This ‘Pan-India survey report of CDSCO’ shows that from 2006 to 2010 the percentage of both ‘Substandard’ and ‘Spurious’ drugs were quite low in India.

However, the more worrying fact, as seen in the report is, the arrests and prosecutions for this heinous crime are also abysmally low in India.

IP related ‘counterfeit’ drugs are relatively smaller in numbers: 

WHO has identified following types of counterfeit medicines:
• Without active ingredients: 32% • Wrong ingredients: 21.4% • Incorrect quantities of active ingredients: 20.2% • Right quantities of active ingredients but in fake packaging: 15.6% • High levels of impurities and contaminants: 8.5% • “Substituted ingredients of anything from paracetamol to boric acid, talcum powder, rat    poison or road paint”: 2.3%

In addition, 50% of medicines purchased online from illegal internet are ‘counterfeit or fake’

From the above data, it appears that IP related ‘counterfeit or fake’ drugs are relatively small in number.

‘Anti-Counterfeiting Trade Agreement (ACTA)’:

The subject gets more complicated when such critical ‘Public Health and Safety’ related issue is leveraged to further strengthen Intellectual Property Rights (IPR) and address commercial issues in different ways.

One such initiative was ‘Anti-Counterfeiting Trade Agreement (ACTA)’. This was signed mostly by the developed countries of the world in October 2011.

ACTA is a plurilateral international trade agreement aimed at countering more efficiently not only the menace of counterfeit goods, generic medicines and copyright infringement on the internet, but also Intellectual Property (IP) related issues, including stringent enforcement of product patents.

This agreement was primarily designed to form a new forum, outside the existing ones, like for example United Nations (UN), World Trade Organization (WTO) or the World Intellectual Property Organization (WIPO) and was signed by Australia, Canada, European Union, Japan, Morocco, New Zealand, Singapore, South Korea, and the United States. However, the agreement has not been formally approved by any of them, as yet.

According to European Commission, “ACTA is an international trade agreement that will help countries work together to tackle more effectively large-scale IPR violations. Citizens will benefit from ACTA because it will help protect Europe’s raw material – innovations and ideas.”

Two aspects of ACTA definition:

As per ACTA definition, there are two aspects for a medicine being termed as ‘Counterfeit’, which are as follows:

  1. ‘Health and safety’ issues, arising out of therapeutically harmful medicines
  2. Violation of IP rights like, patents, trademark and design

It raises more questions than answers:

ACTA definition, as mentioned above, has led to confusion mainly because, if a patent infringing product is termed ‘counterfeit or fake’ in one country, what will then the same product be called in another country where the molecule has gone off-patent? 

Moreover, countries which consider such types of drugs ‘fake’ or ‘counterfeit’, will have the full right to destroy even the in-transit consignments containing such products, not only causing economic loss to the exporter, but also jeopardizing public health interest at the destination countries. Just to site an example, in not too distant past, consignments of generic medicines exported from India to Brazil were seized at the European ports

Thus, many experts feel that ACTA poses a potential risk for global access to generic medicines endangering public health interest, as it could restrict free passage of such drugs through many ports of the world on IP grounds, as happened more than once in the past.

‘Generic medicines’ to be left unharmed:

In this context, Ellen‘t Hoen, former Policy Advocacy Director of MSF’s Campaign for ‘Access to Essential Medicines’ wrote in April 2009 as follows:

“People often seem to confuse counterfeit, substandard and generic medicines – using the terms interchangeably. But they are very separate issues and clearly defining their differences is critical to any discussion”.

Ongoing WHO debate: 

‘Intellectual Property Watch’ in May 20, 2010 reported that:

“Brazil and India claimed that WHO’s work against counterfeit and substandard medicines is being influenced by brand-name drug producers with an interest in undermining legitimate generic competition. The Brazilian ambassador told ‘Intellectual Property Watch’ there is a ‘hidden agenda’ against generics for countries like Brazil.”

“India and Brazil filed requests for consultations with the European Union and the Netherlands over the seizure of generic medicines in transit through Europe. This is the first step towards a dispute settlement case, and if issues cannot be resolved via consultations then formation of a dispute settlement panel could be requested in the coming months”.

However, as reported by ‘The International Center for Trade and Sustainable Development (ICTSD)’, after the Government of India had taken it up strongly with the EU, the issue of confiscation of in-transit consignments of generic drugs has since been resolved.

Three emerging views:

Arising out of all these, there are following three different clearly emerging views on the global issue of counterfeit drugs:

1. The innovator companies feel that the generic pharmaceutical industry and the drug regulators of the developing countries are not really very keen to effectively address and resolve the global issue of ‘Counterfeit Drugs’.
2. The generic companies and the drug regulators of the developing countries feel that the problem is not as acute as it is being projected to be and the innovator global pharmaceutical companies through their intense advocacy campaigns are trying to exploit the sentiment against spurious and harmful drugs to fight against generic medicines and cheaper parallel imports.
3. Some other important stakeholders, including a section of NGOs claim that an intense ‘Public Health and Safety’ related sentiment is being leveraged by the R&D based global pharmaceutical companies to extend IPR issues to “patients’ safety” related concerns, for vested interest.

The role of WHO:

The leadership role of the WHO is extremely important to effectively eliminate the global menace of ‘Counterfeit Drugs’ for ‘Public Health and Safety’. Across the world, patients need protection from the growing threat of ‘Counterfeit Medicines’. As a premier global organization to address such critical issues effectively, especially for the developing world, the WHO needs to play a more proactive and stellar role in future.

A Rational Approach:

The groups opposing ACTA recommend the following approaches to address the menace of ‘Counterfeit or Fake or Spurious or Harmful Medicines’:

  1. Address the issue of ‘Public Health and Safety’ by strengthening regulatory systems, related laws of the country and the stakeholder awareness program. In case of India, recently amended Drugs and Cosmetics Act needs to be properly implemented in letter and spirit.
  2. The issue of violation of IP should be dealt with through effective enforcement of IP laws of the country.
  3. There should not be any mix-up between ‘Public Health and Safety’ and ‘IP related issues’, in any way or form.

Countries already approached WHO:

Earlier, along with countries like Indonesia and Thailand, India could make the WHO realize that mixing up the above two issues could pose serious impediment for the supply of cheaper generic medicines to the marginalized sections of the society, globally. 

Weak regulatory enforcement lead to more ‘Counterfeit/Fake’ drugs:

The menace of counterfeit medicines is not restricted to the developing countries like, India alone. It is seen in the developed countries, as well, but at a much smaller scale. Thus, it is generally believed that the issue of ‘counterfeit drugs’ is more common in those countries, where the regulatory enforcement mechanism is rather weak.

A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1%. On the other hand, ‘in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits’.

Conclusion:

In the meeting of the TRIPS Council of the World Trade Organization (WTO) held in June, 2012, developed countries continued to reiterate that ‘Counterfeiting of Drugs’ being a critical issue should be deliberated upon by the council, expeditiously.

However, emerging countries like, Brazil, India and China strongly opposed this view by reemphasizing that in the name of ‘Counterfeit Drugs’ issues of IPR violations should not be clubbed with ‘Public Health and Safety’. They argued that IPR violation should in no way be confused with sub-standard drugs or therapeutically harmful medicines and any attempt to discuss the menace of harmful or substandard medicines at the WTO platform will be improper.

Developing nations, in general, have already alleged in various global forums that being unsuccessful in their efforts to use ACTA in making the IP environment even more stringent, the developed countries are now trying to use the WTO to achieve the same objective.

The debate continues and the moot question still lingers: Why should the issue of ‘Public Health and Safety’ get mixed-up with ‘Intellectual Property (IP)’ related problems?

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.