EU push for liberal patents finds favour with PMO

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SummaryHard lobbying by the European Union, home to many of the world’s largest pharmaceutical firms like Novartis, Sanofi-Aventis and Roche, has struck a chord with the PMO, which is now ‘putting pressure’ on a reluctant commerce and industry ministry to include a contentious IPR chapter in the proposed India-EU trade and investment pact. The EU wants India to liberalise its patenting standards exclusively for the applicants from the union’s 27 countries. It also clamours for a string of associated rewards like a defined period of ‘data exclusivity’ and Supplementary Protection Certificates...

Hard lobbying by the European Union (EU), home to many of the world’s largest pharmaceutical firms like Novartis, Sanofi-Aventis and Roche, has struck a chord with the Prime Minister’s Office (PMO), which is now ‘putting pressure’ on a reluctant commerce and industry ministry to include a contentious IPR chapter in the proposed India-EU trade and investment pact.

The EU wants India to liberalise its patenting standards exclusively for the applicants from the union’s 27 countries. It also clamours for a string of associated rewards like a defined period of ‘data exclusivity’ and Supplementary Protection Certificates (SPCs). These additional rights would enable the patent-holders to fully exploit the economic value of their inventions (including incremental ones) by enjoying the exclusive rights for longer periods, much more peacefully and to the fullest.

Agreeing to the EU demands could, however, potentially overturn India’s Patent Act --which was last amended in 2005 and arguably strikes a balance between patent rights and the access to medicines--, and hit the country’s generic drug industry hard.

Official sources on the condition of anonymity told FE that the PMO has sought to know from the department of industrial policy and promotion (DIPP) as to what it thinks of the EU demands. This is despite the fact that the DIPP has been unflinchingly dismissive of these demands citing them as ‘TRIPS-plus’ and made its position amply clear to all concerned.

During the India-EU summit in Brussels last month, Prime Minister Manmohan Singh and European Commission president JM Barroso declared their intent to conclude the trade and investment pact in March, when Singh is slated to visit Europe again. It is believed that the PMO wants the IPR issue to be addressed quickly enough for that plan to materialise.

In a recent note to the department of pharmaceuticals on the PMO communication it received earlier, the DIPP wrote, “The DIPP does not support data exclusivity and amendments suggested by the OPPI (an Indian industry body that consists mostly of foreign MNCs present here) to the Patents Act...” The department which is the nodal agency for the policy on patents, believes that so long as India continues to be a net IPR user than an IPR producer (85% of Indian patents go to non-residents), there was “absolutely no need to tinker (with) /tweak (the Patents Act) in any manner” at this juncture. The department asserts that India’s patent laws as they exist today are compliant with the WTO’s Trade-Related Intellectual Property Rights (TRIPS) agreement, and there is no need for an easing of the patenting criteria until and unless India’s capabilities on innovation are reinforced. Patenting criteria, the department believes, should be context-dependent and take into account the level of development and infrastructure of the country concerned.

Data exclusivity denotes protection of the test and other data (pertaining to new chemical entities) that is submitted to the drug regulators from unfair commercial use. This is provided for under Article 39.3 of the TRIPS agreement. But the EU wants something more than this: first, it says the regulator should not rely on the innovator data to approve generic products that are bio-equivalent to the originator’s product and secondly, it wants the facility to be available for not only NCEs but other pharma products as well. Given the time-lines of the patenting and regulatory process, data exclusivity of this nature could potentially delay the entry of generics and scupper government’s ability to invoke compulsory licence, a TRIPS-complaint policy tool that is meant to break patents under defined circumstances like public health crises. It could also result in an extended period of market exclusivity for patented drugs as the innovator can come out with “new indications” of the drug close to patent expiry and get the concomitant data exclusivity.

Although many countries, including China (at the time of its WTO entry), allow periods of data exclusivity as defined in the EU wish list, India has been dithering on this, keeping in mind the interests of the country's robust generic industry which is also big hope for under-developed countries in Africa wanting to import cheap generic drugs under the Doha Declaration on Public Health.

Similarly, the SPC provides for an extension of the patent term for up to 5 years to compensate for the “regulatory delays”- that is, the time taken to obtain the approvals for pre-clinical and clinical (human) trials and validate the data. Further, the EU wants courts in India to grant automatic injunctions as interim relief in patent infringement cases. This, it has been pointed out, is against the principles of equity. The DIPP says public interest should not be dis-served by a permanent injunction. After all, patent or any other IPR for that matter, is a private right which should be enforced by the right owner rather than the state. On patentability criteria, what the EU wants is a removal/dilution of the Section 3 (d) in India’s Patents Act that seeks to prevent patenting of incremental inventions that don't bring substantial improvement in efficacy. While the government is making up its mind over whether or not to have the disputatious IPR chapter in the proposed India-EU bilateral pact, the drug industry is divided and busy lobbying with the political establishment.

The Indian Pharmaceutical Alliance (IPA) that comprises top-notch domestic drug companies, has quoted the World Health Organization to drive home the point that the EU demands are unjust : “in bilateral trade negotiations, it is important that governments ensure that ministries of health be properly represented... (bilateral agreements) should not seek to incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.” An e-mail sent to OPPI director-general Tapan Ray elicited an automatic response that he is out of office till Jan 12 and has no access to e-mail during the period.

The industry body’s president Ranjit Sahani was also travelling and not available for comment, while its other office-bears said they are not authorised to speak on behalf of the body to the media.

As a tradeoff, what the EU offers is recognition of a clutch of India's geographical indications (a form of IPR linked to the geographical origin of a product and the distinct quality it derives from that origin) like Kanchipuram Silk, Kolhapuri Chappal, Nagpur Orange, Bikaneri Bhujia, Darjeeling Tea and Agra Petha. However, then economic gain from this for the local communities is expected to be meagre, as these reputations are largely limited to India.

Although bilateral pacts on IPRs are limited to the countries concerned, it could induce other countries to invoke the non-discrimination (most favoured nation) clause under the World Trade Organization.

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