Despite strong pressure from the European pharmaceutical industry, the European Commission has little chance of pushing India into changing its current intellectual property rights (IPR) regime in the area of generic drugs, according to experts. The lack of an agreement between the EU and India on this issue could jeopardise the conclusion of the free trade negotiations planned for this spring (see Europolitics4132). The pharmaceutical industry is “too powerful for New Delhi to put it under threat,” Hosuk Lee-Makiyama, co-director of the Brussels-based European Centre for International Political Economy (ECIPE), told Europolitics. He argued that the EU should be “firm on India and push for the general improvement of the intellectual property rights enforcement in the country,” but doubted that the Commission could be successful in including the regulatory data protection (RDP) provision in the free trade agreement. His views were shared by Pedro Roffe, senior fellow at the Geneva-based International Centre for Trade and Sustainable Development (ICTSD). “The issue is a hot question in India because of the resistance of the local industry to the introduction of data exclusivity [the RDP - Ed] and the strong support provided by NGOs in the country that see with suspicion and fear such measures,” Roffe told Europolitics. He underlined that India has “one of the most prominent generic drug industry in the developing world”.

The Indian pharmaceutical industry is a major producer of generic drugs and routinely exports them to other mainly developing countries. According to the Indian Drug Manufacturers’ Association (IDMA), exports in 2009 reached US$10 billion and are growing annually at 22%. India is ranked as third in the world in terms of generic drugs production. Due to price differentials, Indian generic drugs have become particularly popular in developing countries, offering a cheaper alternative to branded products. Médecins Sans Frontières (MSF) estimates that over 80% of the HIV medicines used to treat more than five million people across the developing world come from Indian companies.

The Indian government, backed by NGOs, argues that including the RDP in the free trade agreement with the EU will negatively affect the country’s powerful generic drug industry. It claims that it would limit India’s scope for developing and exporting life-saving medicines, as well as increase prices.

The European pharmaceutical industry has been challenging this view. In its recent position paper, the European Federation of Pharmaceutical Industries and Associations (EFPIA) argues that “the absence of the RDP is the most striking gap in India’s intellectual property regime when compared to both developed economies and other emerging economies, such as China and Russia”. Therefore it is strongly in favour of this provision being included in the EU-India FTA. “RDP is an essential legal mechanism to protect, for a limited period, huge investments in data necessary to bring a medicine to market,” says the EFPIA. According to a well-informed source, the industry favours a provision of at least five years of RDP from the date of marketing approval in India, just like in China.

NEW EU POLICY LINE

The European Union has been attaching an increasing importance to the enforcement of IPR in its free trade negotiations. In the past, the Commission did not insist on the inclusion of the RDP in such agreements. “The situation has drastically changed in the most recent FTAs negotiated with Peru, Colombia and the Central American countries, where data exclusivity is part of the deal,” said Roffe. He suggested that the Commission should pursue this new policy line during its negotiations with India.

The Commission’s approach is not shared by MEPs. The Liberals in particular are opposed to the inclusion of the RDP clause in FTAs. “We do not wish that the Commission push intellectual property clauses that go beyond the requirements of the TRIPS Agreement,” MEP Niccolò Rinaldi (ALDE, Italy) has said. Under the Lisbon Treaty, the Parliament has to give its assent to a free trade agreement with India.