Pharma cheers, advocates jeer as US keeps India on list of bad patent players

The ongoing battle between global drug makers and the Indian government has, once again, landed the nation on an Obama administration list of countries that fail to protect and enforce patent rights. And the move comes two months after the pharmaceutical industry urged the administration to take this step over protracted concerns that its intellectual property is in jeopardy.

Specifically, the US Trade Representative placed India on what is known as the annual priority watch list of countries singled out for practices that are both favorable and unfavorable to American companies. India has regularly made the list for years, but some consumer advocates reacted with particular anger over fears that industry pressure will restrict access to affordable medicines.

The listing reflects sustained concerns 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 lower-cost drugs and pharmaceutical patents.

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 many generic drug makers, which patient groups view as a pharmacy for the world, given that these companies generally provide lower-cost alternatives to brand-name medicines.

India has taken “positive steps to address or avoid further erosions” of intellectual property, the Trade Rep wrote in its report, which was issued yesterday. The trade rep noted, for instance, that India participates in a trade forum with the United States. “However, at the same time, India has not taken the opportunity to address longstanding and systemic deficiencies in its intellectual property regime and has endorsed problematic policies that may leave open the door for backsliding in the future.”

The report cited a litany of concerns.

For instance, the Trade Rep pointed to the “unpredictable application” of Indian patent law, which can be used to deny additional patents for existing medicines. Famously, the Indian Supreme Court three years ago denied a patent for the Gleevec cancer drug sold by Novartis. The court ruled a new formulation was really evergreening, a tactic in which a brand-name drug maker seeks a patent for what it says 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.

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Another issue surrounds compulsory licensing. A country may grant such licenses to a generic drug maker, which allows 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. For its part, the Trade Rep wrote that there is a “lack of clarity” surrounding the issuance of these licenses. Why? A license can be granted for two different reasons — a public health emergency, or in response to pricing and access. Last month, the Indian government denied assertions made by two US business groups that there are plans to restrict the second type of license.

In a statement, India’s Ministry of Commerce and Industry rejected the listing and said the government is “committed to fully utilizing all the flexibilities provided under the TRIPS agreement to protect (the) domestic pharmaceutical sector from pressure exerted by the foreign countries.”

The Pharmaceutical Research and Manufacturers of America, the industry trade group, welcome the decision by the Trade Rep to keep India on the priority watch list.

“India’s barriers to US trade and investment, including its failure to respect intellectual property rights, continue to harm biopharmaceutical innovators and many other industries across the United States and around the world,” Jay Taylor, a vice president at the trade group, in a statement.

For their part, consumer advocates worry industry efforts to enforce intellectual property rights may come at the expense of patients who cannot afford medicines.

“It’s outrageous that the US government is once again attempting to stand in the way of India and other developing countries’ efforts to increase access to affordable, lifesaving medicines,” said Judit Rius, US manager and legal policy advisor for the access to medicines campaign at Doctors Without Borders.

“India’s policies save lives and are fully consistent with global trade rules,” she continued. “The US government should support countries, rather than penalize them, for not bowing to the persistent efforts of the multinational pharmaceutical industry to severely restrict generic competition in India and worldwide.”

One expert explained that the US government is saying that, “in some ways, (India) made limited progress in addressing widespread intellectual property concerns,” wrote Vince Suneja of TwoFour Insight Group, a consulting firm that specializes in the Indian pharmaceutical industry. And while India has agreed to discuss those concerns in public forums, the country “has not yet made any substantive changes to its policies and procedures.”