GENEVA - India is famous for the Taj
Mahal, its religious ceremonies, Bollywood films
and in recent years one of the world's highest
economic growth rates in recent years. Less
famously but no less important, the country has
had a positive global impact through its supply of
vast quantities of low-cost, good-quality generic
medicines, which have saved or prolonged millions
of lives.
A decade ago, Indian
pharmaceutical company Cipla produced generic
HIV/AIDS drugs that could treat a patient for
US$300 a year, against the branded product's cost
of $10,000 per patient a year. Today the Indian
generic version is even cheaper, below $80.
This has enabled millions more AIDS
patients to be treated, since
India supplies 70% of
the HIV/AIDS drugs obtained by the United Nations
Childrens Fund (UNICEF), the Global Fund and the
William J Clinton Foundation for developing
countries.
A further 75-80% of medicines
(not only for AIDS) distributed by the
International Dispensary Association to developing
countries come from India. No wonder India has
been termed the pharmacy of the developing world.
In January 2012, the Indian Drug
Manufacturers' Association (IDMA), comprising 700
drug-manufacturing companies, celebrated its 50th
anniversary by toasting the industry's high
growth, wide range of medicines, and its
contribution to safe, affordable drugs.
Many factors may hinder the continuation
of its members' role as supplier of medicines to
developing countries.
A leading factor in
the industry's success was the government's
decision in 1970 to exclude pharmaceutical drugs
from product patents. This paved the way for local
companies to produce generic versions of expensive
foreign drugs, and within a few decades they had
taken over 80% of the domestic market while also
supplying cheap medicines abroad.
The
situation took a negative turn when the
intellectual property agreement, known as TRIPS,
was established in 1995 together with the World
Trade Organization, which disallowed countries
from excluding medicines from patentability.
However, TRIPS allowed individual
countries to determine the criteria for an
invention that can be granted a patent.
Furthermore, TRIPS gave governments the ability to
grant a compulsory licence to local companies to
produce the patented products, if their requests
to patent owners for a voluntary licence did not
succeed. To implement its TRIPS obligations,
India passed changes to its patent law in 2005 so
that drugs could now be patented. However, the new
law also contained flexibilities such as strict
criteria for patentability (trivial changes to a
patent-expired product would not qualify for a new
patent); allowance for public opposition to a
patent application before a decision is made; and
compulsory licencing.
India has one of the
best patent laws in the world that still gives
some space to its producers to make generic drugs.
It is also true that the old policy space has been
eroded because many new drugs have, since 2005,
been patented by multinational companies that are
selling them at exorbitant prices.
Indian
companies can no longer make their own generic
versions of these new medicines unless they
successfully apply to the government for
compulsory licences, a most cumbersome process; or
unless they obtain a licence from the
patent-owning multinational, which comes with
stringent conditions, especially for export.
Another worry is that India is negotiating
a free-trade agreement (FTA) with the European
Union. Such agreements usually contain provisions
such as data exclusivity and extension of the
patent term, which prevents or hinders generic
production.
Finally, six Indian companies
were recently bought up by large foreign firms. If
this trend continues, the Indian drug market may
again be dominated by multinationals. It is
uncertain whether they will continue to supply the
developing world with cheap generic medicines when
this may be in conflict with their own branded
products.
International health
organizations such as UNAIDS, UNITAID and Doctors
Without Borders have raised their serious concerns
that these recent trends may threaten India's role
as the chief supplier of affordable medicines to
Africa and other developing countries.
Millions will die if India cannot produce
the new HIV/AIDS medicines in the future - it is a
matter of life and death - said Michel Sidibe,
executive director of UNAIDS, during a visit to
India last year.
Thus, a strategy is
needed that involves the government and the drug
companies, which ensures that the local drug
industry continues to thrive; that it produces not
only existing medicines but also new medicines
even if they are patented; and that they are
supplied at cheap prices not only in India but to
the developing world.
That was the
sobering message that emerged during IDMAs 50th
anniversary conference in January, even in the
midst of congratulations on the achievements of
the past.
Martin Khor is the
executive director of the South Centre in Geneva.
(Inter Press Service)
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