Pharma dept says no to IP clauses in FTAs

Business Standard, India

Pharma dept says no to IP clauses in FTAs

By Joe C Mathew / New Delhi

21 April 2010

The Department of Pharmaceuticals (DoP) has firmly declined the commerce ministry proposal to incorporate intellectual property (IP) protection clauses, which go beyond the existing rules, as part of the free trade agreements (FTAs) being negotiated with the European Union (EU) and Japan.

At least two demands of the multinational drug companies — linking patent status of a medicine to the drug approval process and providing exclusivity to the clinical trial data generated by the innovator company — would have found way into domestic rules, if department of pharmaceuticals had agreed to the proposals mooted by EU and Japan.

The response from DoP has come at a time when official level talks on both FTAs are about to resume next month. It was the Department of Industrial Policy and Promotion (DIPP) — the administrative department for IP issues — that had sought DoP’s response before finalising the country’s views on the IP matters in FTA negotiations.

According to sources, DIPP had developed two models — the quid pro quo model and the legalistic model — for DoP’s consideration. While quid pro quo model was a give-and-take model, where mutual concessions on IP protection would have become necessary, legalistic model meant the country would not change its rules to accommodate EU or Japanese demands on higher level of IP protection.

“The department has chosen the latter, as agreeing to more stringent IP protection would have harmed the long-term interests of domestic (the) pharmaceutical industry,” a senior official said.

The industrialised nations have been asking India to introduce IP provisions that go beyond the obligations of the Trade-related Aspects of the Intellectual Property Rights (TRIPS) agreement of the World Trade Organization (WTO). Sticking on to the legalistic model, the department has rejected this demand for “TRIPS plus” provisions.

“India stands to lose in the quid pro quo model, as we are yet to develop great innovation skills. Our strength is the ability to manufacture low-cost versions of patented medicines and we have built an industry worth Rs 1,00,000 crore through generic drug manufacturing,” the official said.

DoP had also organised a stakeholder consultation, involving all drug industry associations, before finalising its views. In addition to patents, EU and Japan want India to make several changes in rules related to geographical indications (GI), trademarks, etc, as part of FTA commitments.