EU-India Free Trade Agreement: pharmaceutical IP protection remains an issue

Introduction

On April 22 2013 Indian Commerce and Industry Minister Anand Sharma submitted a letter to the Indian Parliament to update it on the progress in negotiations with the European Union on a broad-based trade and investment agreement (BTIA). Sharma noted "intensified" negotiations in diverse sectors from goods and services to government procurement, competition and IP rights.

Since the BTIA negotiations launched in June 2007, the two sides have met for 15 rounds of talks, but have also missed a number of deadlines. The most recent meeting was held in Brussels on April 15 2013, but Sharma and his negotiating counterpart, EU Trade Commissioner Karl De Gucht, were unable to conclude the negotiations. The next ministerial-level meeting is scheduled for June 2013, but EU negotiators will reportedly travel to India for a preparatory meeting in May to help bridge the gaps and support a swift conclusion to the deal.

Issues

The points of contention in the BTIA negotiations arise from differences on key domestic issues in each market. The European Union is seeking tariff reductions on goods such as automobiles, wine and spirits, and dairy products. Additionally, it is seeking to increase the limits placed on foreign direct investment in the insurance sector and to promote a strong IP rights protection regime.

India has focused on more liberal norms for professional work visas, data security status and enhanced market access in the service and pharmaceutical sectors. The Indian dairy industry has also pressured the government not to give concessions without an adequate levelling of the playing field for Indian producers on sanitary and phytosanitary standards and geographical indications.

Pharmaceuticals

The key negotiating issues of each partner reveal deep differences relating to the pharmaceutical sector. The European Union's push for increased IP rights protection, which would have a major impact on pharmaceutical patents, was raised by the German minister of economy and technology as a key issue for German industry. Minister Roesler has been reported as stating that India does not sufficiently guarantee patent protection.(1) India, a major producer of generic pharmaceuticals, has sought increased market access in this sector.

These negotiations are played out against the backdrop of the Indian Supreme Court's recent rejection of a patent application for the drug Glivec by Swiss-based Novartis.(2) The decision has raised concerns not only with Novartis, but also with the pharmaceutical sector more broadly. India is perceived as not offering the IP rights protection that is required by international law, such as its obligations under the World Trade Organisation (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).

In particular, the court's apparent view that not all pharmaceutical inventions merit patent protection could be questioned under Article 27 of TRIPs, which provides that patents shall be available to all inventions without discrimination as to the field of technology. Although India claims that its Patent Act as interpreted by the Supreme Court addresses the problem of 'evergreening', it could be argued that other countries have been able to deal with this problem in a manner that raises fewer issues under TRIPs. The background of this decision includes India's historical lack of patent protection for pharmaceuticals (until relatively recently) and its recent approval to start the process of compulsory licensing for a number of other cancer drugs. These factors mean that the Supreme Court's ruling could be seen as raising systemic concerns over India's TRIPs commitments in regard to pharmaceuticals.

In the context of the EU-India BTIA, the European Union denies that it is seeking any changes to India's IP laws and claims that it is demanding of India nothing more than to implement its commitments under TRIPs. It remains to be seen whether these recent developments will play a role in the final stages of these negotiations or whether they will need to be resolved by the WTO.

EU plans to block fake drugs spark industry row

A European Union plan to tighten drug packaging rules in a bid to stamp out counterfeits has triggered a row between makers of big name medicines and those producing cheap generics, who argue the costs will be crippling. 

Bogus drugs are rare in Western markets but a spate of high-profile cases in Europe, including the recent discovery of fake versions of Roche's injectable cancer drug Avastin en route to the United States, have fuelled concerns. 

The European Commission, the EU's executive arm, is addressing the issue with a directive requiring medicines to be sold in tamper-proof packs from 2016, each with a unique identifier allowing them to be tracked through the supply chain. 

The idea has been welcomed by companies like Pfizer, GlaxoSmithKline and Roche that make expensive patented medicines, since the move is likely to reinforce the reliability of their brands. 

But Greg Perry, director general of the European Generic medicines Association (EGA), contends it is an unnecessary burden on generics companies, whose low-cost products are anyway of no appeal to criminal counterfeiters. 

"Makers of expensive branded medicines can absorb these technological costs because they have far higher margins and their products are the ones being counterfeited," he said in a telephone interview. 

"For us, it is a very different ball game ... there is not a single case of counterfeited generics being found in the EU legal supply chain."

EU Raids Pharmaceutical Companies for Antitrust Concern

European Union (EU) officials had raided a number of pharmaceutical companies for antitrust concern, the European Commission said on Friday.

The unannounced inspections were carried out on Tuesday at the premises of a limited number of companies active in the pharmaceutical sector in several EU member states.

The commission said it had reason to believe that the companies concerned may have acted individually or jointly, notably to delay generic entry for a particular medicine.

"If confirmed, this could be a potential violation of EU antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position," it said.

Unannounced inspections are a preliminary step in the EU's procedure against suspected anticompetitive practices, which the commission said do not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation itself.