Thorny clause in ripening India-European Free Trade Association deal may hit generic drug industry
The Hindu | 13 February 2024
Thorny clause in ripening India-European Free Trade Association deal may hit generic drug industry
by Jacob Koshy
A clause in a draft free trade agreement text being negotiated between India and the European Free Trade Association (EFTA) — Switzerland, Iceland, Lichtenstein and Norway — could delay access to affordable, generic versions of patented drugs in India by a minimum of six years, according to documents viewed by The Hindu.
A leaked draft of the Trade and Economic Partnership Agreement (TEPA), available on the website bilaterals.org, an organisation that tracks international free trade agreements, says that within six months of the trade agreement being signed, signatories (in this case the countries) should include a “specific duration” during which applicants (pharmaceutical companies) applying to their country’s regulators for permission to sell a drug would not rely on “undisclosed test data” (in this case data on the drug’s efficacy and impact on people) to gain market approval for at least six years.
There is also a line that suggests this should apply not only to ‘new’ chemical drugs but also a class of drugs called ‘biologics drugs,’ — monoclonal antibodies, vaccine formulations — that involve complex mixtures of organic and inorganic entities, and are harder to make copies of. Many Indian biotechnology companies are developing biologics drugs.
The Hindu has independently confirmed the existence of this clause from sources following international bilateral negotiations.
India, which has over decades, mushroomed a thriving generics drug industry has resisted attempts by foreign pharmaceutical companies to extend monopoly rights over patented drugs. This is mostly because India’s generic drug industry has over the years made affordable versions of expensive drugs and become a large global supply itself. The Indian pharma industry is the third largest in the world and produces over 60,000 generic drugs across 60 therapeutic categories and had an annual turnover of ₹3.4 lakh crore, Minister of State (Chemicals and Fertilizers) Bhagwant Khuba told Parliament in July 2023. It is also the bulwark of the government’s Jan Aushadhi Scheme that allows free drugs to be made available to the poor.
“These effectively means that drugs such as bedaquiline (for TB) under provisions of data exclusivity wouldn’t be available,” said Gopa Kumar, legal researcher, Third World Network. Medicine Sans Frontiers, which works on enabling access to medicines, has written to Prime Minister Narendra Modi on February 9 pointing out concerns over these provisions in the draft TEPA.
In the most recent round of EFTA negotiations that were held in Delhi from January 8-13, media reports suggest that officials from both delegations have moved closer to a deal.
“Balanced solutions”
Swiss Economy Minister Guy Parmelin, who heads the EFTA, posted on X last month after he flew to India on a “last-minute” invitation of India’s Commerce Minister Piyush Goel for negotiations on the TEPA, following which they had reached “balanced solutions” to concerns around the agreement.
While details of these solutions are not public, intellectual property (IPR) concerns are a major sticking point. In an interview to The Hindu in December, Helene Budliger Artieda, Swiss Director of the State Secretariat for Economic Affairs (SECO), and Norwegian Trade Minister Jan Christian Vestre said Minister Goyal had been told that securing the “best possible deal in IPR was a ‘bread and butter issue’“ for EFTA countries. “At this stage we do not wish to comment on the ongoing negotiations. We hope for the agreement to be concluded as soon as possible,” a spokesperson for the Norwegian Embassy told The Hindu.
Patented drugs give exclusive marketing rights to the inventor, or whoever files for the patent first, for 20 years. This has often resulted in essential drugs and medicines being unaffordable in several countries, including in India. Under internationally accepted provisions of compulsory licensing, Indian law allows drug maker to reverse-engineer and sell generic, or copy-cat versions of the drug, after only three years of it being patented in India. This is provided if there is a convincing case that the drug is necessary and unavailable to those who need it because it is too expensive.
‘Data exclusivity’
However this conflict between original inventors of drugs — several of whom have been European pharmaceutical giants — and Indian drug manufacturers, who have largely grown on reverse-engineering these drugs, has frequently played out as contentious litigation. Discovering effective drugs is expensive and time-consuming and pharma companies in the business of drug discovery, have moved to extend the period over which they can claim exclusive rights, and thus profitability, over their most valuable drugs. While claiming new methods of manufacture and furnishing new combinations of the underlying active chemical ingredient of a blockbuster drug are the familiar approach to extend such patentability, an emerging approach is in claiming ‘data exclusivity.’
That means all the data generated during testing the safety and efficacy of a drug — an expensive and time-consuming process — and that usually becomes public knowledge, becomes exclusive to the company. This means the current practice, whereby generic drug makers make a copy-cat, establish that it’s for all practical purposes the same drug and rely on the published clinical trial data to prove that it is safe and effective, ceases to be legal.
This could, say experts, even extend to drugs that have not been patented in India and require generic manufacturers to either wait out the exclusivity period or repeat expensive clinical trials.
For instance, Colchicine, a traditional medicine used for gout saw its price rise by 5000% in the United States after one company was granted data exclusivity rights blocking other companies’ rights to manufacture it.
“Over the last two decades, the fact that India did not have data exclusivity in its law facilitated the affordable entry of new drugs for HIV, tuberculosis (TB) and viral hepatitis, which we have been able to use to treat people in our care. Implementing data exclusivity now has the potential to jeopardise access to essential drugs in general, as well as to delay the approval of generic versions of newer medicines, such as paediatric formulations for new TB drugs for which patents have expired,” said Leena Menghaney, Global IP Adviser, Médecins Sans Frontières (MSF), and an expert on intellectual property laws governing drugs.
The India EFTA text is a broad-ranging agreement that is being negotiated between India and the four countries since 2008 to increase investment by these countries in India and reduce tariffs, on a range of exports from these countries.
