The Financial Express Wednesday, May 08, 2002
USTR Warns India On Trips Compliance Issues Sanjay Sardana New Delhi, May 7: The US Trade Representative (USTR) has flayed India for being less protective on intellectual property rights (IPR) and for having "overly broad" compulsory license provision. USTR report has also warned India of strict action if it fails to resolve various issues relating to Trade-related Intellectual Property Rights (Trips). India has already been put on the priority watch list in USTR '2002 special 301 report.' "USTR will continue to consult with the Indian government to resolve the outstanding Trips compliance concerns. But, if these consultations do not prove constructive, we will consider all other options available, including WTO dispute settlement, to resolve them," the report says. Interestingly, USTR is under attack within the US itself. Its agenda is "not easily distinguishable from the agenda of the brand pharmaceutical industry," according to Tom Allen, member of the US House of Representatives. In his address to the International Generic Pharmaceutical Association last month, he said, "USTR has sided with the brand-drug manufacturers, and against the generic industry associations, European Union, developing countries and consumer activists." Mr Allen said the companies of the Pharmaceutical Research and Manufacturers Association (PhRMA) had tilted the system in two way - first by spending more than $200 million in the last four years on lobbying, campaign contributions and political ads. The report released last week says that India's patent system and protection of exclusive test data appear far from compliant with its obligations under the Trips agreement. The term of protection for pharmaceutical process patents is only seven years. India fails to provide patent protection for pharmaceutical and agricultural chemical products and the compulsory licensing system seems overly broad. On China front, though the country has been put under the 'priority foreign country' status the US has raised concerns with regard to high-level of piracy and counterfeiting, and has asked for a more effective and coordinated action. Apart from India, Argentina, Brazil, Colombia, Egypt, European Union, Hungary, Indonesia, Philippines, Russia, Taiwan and Uruguay have also been put under the 'priority watch list' by USTR. As far as China is concerned, the US has also complained that certain US companies have experienced difficulties in obtaining administrative protection for their products. The US will continue to closely monitor China 's implementation of its WTO commitments. The reports says, "India's over-generous opposition procedures often allow competitors to delay patent issuance until the patent has expired, resulting in de-facto removal of patent protection. It has expressed fears that pending legislation meant to rectify India's Trips deficiencies may fall short. The inadequate patent protection currently available is difficult for innovators to obtain. India's patent office has a huge backlog of 30,000 patent applications and severe shortage of patent examiners. In addition, India's copyright law, which is generally consistent with international standards, was weakened by amendments, enacted in 2000, that undermine protection for computer programmes. Enforcement against piracy remains a growing concern for the US copyright industries, especially given the fact that pirated imports are entering the market from Southeast Asia and that there is growing Internet piracy. While announcing the results of the 2002 Special 301 review, Ambassador Robert B Zoellick has reiterated that USTR would not change the present approach to health-related intellectual property issues. MNCs & Local Pharma Firms Slug It Out On Patents Bill Our Corporate Bureau The deep divide between multinational and domestic pharma companies over certain provisions relating to the amendments in the Second Patents Bill came to the fore at a brainstorming session on Impact of Patents Bill on Healthcare. Parliament is expected to debate the Second Patents Bill on Wednesday. Indian Drug Manufacturers Association (IDMA), membership of which is dominated by domestic small and medium companies, is rooting for broadening the scope of compulsory licensing provisions to include widespread diseases as the current provisions are not adequate. On the other hand, the MNCs-backed Organisation of Pharmaceutical Manufacturers of India says that the introduction of broad-based compulsory licensing would only help the copier and not the patient. At the session, organised by Associated Chambers of Commerce and Industry of India (Assocham), it was basically IDMA and Indian Pharmaceutical Alliance (IPA) lined up against the Organisation of Pharmaceutical Manufacturers and officials of MNCs like Pfizer and Eli Lilly. The MNCs have been trying to allay fears that in the post-patent regime, there was likely to be a sharp rise in the prices of pharmaceutical products. Organisation of Pharmaceutical Manufacturers' director-general, Dr Ajit Dangi, made out a case for restricting the definition of the term 'national emergency' to cover only "true" national emergency situations. He said manufacturing activities cannot be spread across the globe. They have to be consolidated to achieve economies of scale. "Although India has time up to 2005 to introduce product patents under the World Trade Organisation (WTO) agreement, a declaration to this effect, this year, will go a long way in giving positive signals to domestic and foreign investors," said Dr Dangi. MNCs also argue that the Indian pharmaceutical industry will flourish as it begins to focus its resources and efforts on value-added innovations and development of new drugs rather than stagnant imitations. IDMA's secretary-general G Wakankar, however, said adequate safeguards were needed to check the "greed of multinational companies" and incorporate provisions to balance the rights of consumers and patent holders. IDMA has also said that the deadline of 2005 for reintroduction of product patents was inadequate and sought a foolproof definition of the term 'patentable invention' to exclude holders from extending the term of patent beyond the proposed 20-year period. IPA's secretary general DG Shah, suggested that the amendment Bill should specifically mention public health crisis as a ground for compulsory licensing. He said healthcare costs were skyrocketing and cited the formation of a coalition Business for Affordable Medicine comprising 12 governors of US states, 11 companies including General Motors, Wal-Mart Stores, Marriott International and Eastman Kodak to oppose loopholes in a 1984 drug patent law that allows brand name companies to delay the introduction of lower cost alternatives. Domestic pharma companies seeking further amendments to the Bill aimed at ensuring that Indian consumers' interests were protected. The main concern here was that the gains from the Doha Declaration on healthcare should not fritter away due to a piece of legislation that is unduly stringent. The fear was not only of higher prices that would result from the effective patent protection and create virtual monopolies of the MNCs, but also of cheaper imports from China, which will affect relatively smaller companies. But, MNCs were of the view that India needs a patent regime that encourages foreign direct investment (FDI) and research and development (R&D) from the domestic pharmaceutical companies. The key issues that emerged were FDI, R&D and revenue inflows and the consensus was that we need to send out the right signals so as to attract sizable FDI into the sector. © 2002: Indian Express Newspapers (Bombay) Ltd. All rights reserved throughout the world.
