US President Barack Obama with Indian Prime Minister Manmohan Singh. Official White House Photo by Pete Souza
30 September 2013Americas

India urged to improve its drugs patent policy

India’s drug patent policy has been slammed by US companies who are insisting that action be taken in order to improve trade relations.

In an open letter to US President Barack Obama, The Alliance for a Fair Trade with India (AFTI), a specially formed coalition, highlights India’s “harmful trade policies” including revocations of medical patents and issuing compulsory licenses.

Attacking the “unfair policies” the letter claims they are designed to benefit Indian corporations at the expense of manufacturing and jobs in the US and other countries around the world.

The AFTI was jointly set-up by the US Chamber of Commerce’s (UCC) IP centre and the National Association of Manufacturers (NAM).

The letter, sent on September 26, is co-signed by 18 businesses and pharmaceutical manufacturers and calls on Mr Obama to address the issue with the Indian Prime Minister Manmohan Singh.

Linda Dempsey, AFTI co-chair and vice president of international economic affairs at NAM, said the business community and elected officials were “united in their concern” at India’s “protectionist” policies.

“India’s discriminatory trade policies put American businesses at a disadvantage, place manufacturing jobs at risk, and jeopardise India’s ability to grow its economy,” Dempsey said in a statement.

“We urge President Obama to seek immediate and concrete solutions that can lead to growth in the American and Indian economies alike.”

Compulsory licences, which allow local manufacturers to produce cheaper versions of a patented drug, can be granted on the grounds that reasonable requirements of the public are not met, the drug is not available at an affordable price or the invention has not been worked in the jurisdiction in question.

If a compulsory licence is approved, permission from the original patent holder is not required.

In March 2012, India granted its first compulsory licence, allowing local manufacturer Natco to legally make and sell a low-cost version of Nexavar, a drug made by Bayer to treat kidney and liver cancer.

The AFTI says that 12 times in the last three years the Indian government has denied or revoked pharmaceutical patents or approved generic versions of drugs prior to patent terms expiring.

“In the last 18 months, India has consistently failed to recognise international IP rights, hindering India’s path to an innovative and knowledge-based economy,” said Mark Elliot, co-chair of AFTI and executive vice president of the UCC’s global IP centre.

In April this year, the Indian Supreme Court ruled that Novartis’ cancer drug Glivec was not significantly more effective than alternatives and that its active ingredient was already known.

Ravi Bhola, partner at K&S Partners in Bangalore, India, said that, despite many decisions going against traditional global innovator pharmaceutical companies, it was not a reflection of bias from Indian authorities.

“These judgements are objectively based on relevant provisions in the Indian Patents Law. Also, the stand of the Indian Government on this issue is that these provisions are fully compliant with the World Trade Organization TRIPS agreement,” Bhola said.

“In view of aforementioned facts, I feel that most of the concerns showcased in the letter appear to be bit of an overstatement.”

Earlier this month, the Health Ministry in India also recommended a compulsory licence be issued for US-based Bristol-Myers Squibb’s (BMS) anti-cancer drug Sprycel  while in August, Roche Holding AG also decided not to pursue a patent for its anti-breast cancer drug Herceptin.

The decision to recommend the licence for Sprycel centred on its price, which the government says is too high. It currently costs more than Rs.100,000 (US $1,540) for a one month dosage.

“The issuance of the compulsory licence to Natco helped the generic players cross the mental barrier to seek compulsory licence,” said Bhola.

“Since the prerequisites to qualify for issuance of a compulsory licence are fairly straightforward, it essentially becomes a fact-based, almost a mechanical exercise to determine whether it should be issued in a case or not.

The letter is signed by business organisations including: American Business Conference (ABC), Biotechnology Industry Organization, Pharmaceutical Research and Manufacturers of America and the US Chamber of Commerce.

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