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The battle between global drug makers and the Indian government shows no sign of abating as an industry trade group is urging the Obama administration to keep India on its annual list of countries that fail to protect and enforce patent rights.

Specifically, the pharmaceutical industry wants India to remain on what is known as the priority watch list of countries singled out for practices that are both favorable and unfavorable to American companies. The list is maintained by the US Trade Representative and updated in a report each spring (this is the 2015 report).

The request reflects ongoing anger among brand-name drug makers over laws and court rulings in India that, in some cases, have made it easier for their generic rivals to sell lower-cost, copycat versions of their medicines. As a result, the list has become part of the contentious interplay in an ongoing struggle over access to affordable medicines and pharmaceutical patents.


“India’s legal and regulatory systems pose procedural and substantive barriers at every step of the patent process,” the trade group wrote in comments submitted to the US Trade Rep in advance of a hearing next month concerning trade issues and the forthcoming report. “Not only is this a concern in the Indian market, but also in other emerging markets that may see India as a model to be emulated.”

Such concerns have kept India on the industry radar screen for several years.


In particular, the industry remains angry over a 2013 Indian Supreme Court decision denying a patent for the Gleevec cancer drug sold by Novartis. The court ruled that a new formulation essentially amounted to evergreening, a tactic in which brand-name drug makers seek a patent for what they argue is a new invention, but which may actually be just a slight modification to an older medicine. Industry critics call this a ruse for extending patent protection.

There is also ongoing angst over compulsory licensing. Countries may grant such licenses to a generic drug maker, allowing it to copy a patented medicine without the consent of the brand-name drug company that owns the patent. This right was memorialized in a World Trade Organization agreement known as Trade-Related Aspects of Intellectual Property Rights, or TRIPS.

The pharmaceutical industry argues the threat of such licenses impedes investment in innovation. But drug makers have encountered pushback from some countries, as well as consumer advocacy groups. They counter that some industry efforts to enforce intellectual property rights may come at the expense of patients who cannot afford medicines.

This tactic has yielded a mixed record in India. The Supreme Court rejected a bid by Bayer to block the Indian government from allowing a lower-cost version of its Nexavar kidney cancer medication from being sold. But the patent office has also rejected attempts by different generic drug makers to obtain licenses to sell copycat versions of drugs by AstraZeneca and Bristol-Myers Squibb.

In general, the pharmaceutical industry believes the Indian government is unwilling to bolster patent protection because there is concern about protecting its domestic pharmaceutical industry. India is home to numerous generic drug makers, which patient groups view as akin to a pharmacy for the world, given that these companies generally provide lower-cost alternatives to brand-name medicines.

But the industry argues India imposes high tariffs and taxes on medicines, discriminates against foreign drug makers through price controls, and creates a “burdensome environment” for clinical research, among other things. For these reasons, the trade group wants the US Trade Rep to conduct an “out of cycle” review, or an additional review of patent policies beyond placing India on its watch list.

The makers of brand-name drugs also argue that regions where patent protection and enforcement is weakest also contribute to the highest incidence of counterfeit medicines.

For its part, the Indian Pharmaceutical Alliance, a trade group for Indian drug makers, filed its own comments in which it argued that the current patent system complies with World Health Organization rules and “and strikes the appropriate balance between the grant of monopoly patent rights and public health imperatives.”

And Public Citizen, a consumer group based in Washington, D.C., also filed comments, arguing that the US Trade Rep’s annual report “is a form of sanction and an inappropriate warning against countries exercising established rights to promote public health.”