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India on USTR’s Priority ~ Watch List again

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Will we be safeguarding our national health priorities and standards if we toe the USTR’s line or get a better rank on the GIPC IP index?

India is once again on the United States Trade Representative’s (USTR) Special 301 Report’s Priority Watch List. India makes this list for ‘long-standing IP challenges facing US businesses in India include those which make it difficult for innovators to receive and maintain patents in India, particularly for pharmaceuticals.’

India has many co-defaulters on the USTR list. Released on April 25, the 91 page report lists 10 other countries, on the Priority Watch List (Algeria, Argentina, Chile, China, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine and Venezuela.) India’s neighbour Pakistan is on the Watch List, along with Barbados, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Paraguay, Peru, Romania, Switzerland, Thailand, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan and Vietnam.

Like India, China, Indonesia and Saudi Arabia have been called out specifically for what the USTR considers pharma-related IP violations. China has ‘impediments to pharmaceutical innovation’ while Indonesia’s patent law ‘continues to raise serious concerns, including with respect to patentability criteria, local manufacturing and use requirements, and compulsory licensing’. For Saudi Arabia, the Report alleges that ‘concerns remain regarding the lack of IP protection for innovative pharmaceutical products, including the lack of adequate and effective protection against unfair commercial use, as well as unauthorised disclosure, of undisclosed test or other data generated to obtain marketing approval.’

Interestingly, for the second year running, India improved its ranking on the 2019 edition of the US Chamber of Commerce’s Global Innovation Policy Center’s (GIPC) International IP Index by eight places from 44th to 36th. India is nearing the mid mark of this index of 50 world economies representing 90 per cent of global GDP, so we do have quite a way to go.

The question is, will we be safeguarding our national health priorities and standards if we toe the USTR’s line or get a better rank on the GIPC IP index? The USTR’s remit is ‘to use all possible sources of leverage to encourage other countries to open their markets to US exports of goods and services’ and  ‘ensuring that US owners of IP have a full and fair opportunity to use and profit from their IP around the globe’. Inspite of some MNCs introducing tiered pricing arrangements on some products, they are still out of reach of a sizable portion of patients in India.

While the USTR would like patients across the world to pay more for innovation, the irony is that US senators, cutting across party lines, have recently come down heavily on increasing prices of medications. When insulin manufacturers linked rising price to improvements in their products, resulting in better treatment and longer lives for diabetics, Republican Representative David B McKinley rebuked them saying that “innovation is supposed to drive the prices down, not up.”

Making the same point, global humanitarian aid organisation MSF says that the USTR report  undermines efforts to lower medicine prices globally, pointing out how developing countries like India and Malaysia once again face unfair pressure from the US government over the measures these countries have taken to try to protect access to medicines. (See full comment: https://bit.ly/2ZAfij5) Referring to India as one of the world’s most challenging major economies with respect to protection and enforcement of IP, the report mentions previous issues like Section 3(d) of the India Patents Act, as well as new concerns like the January 2019 notice from the Ministry of Health and Family Welfare that allegedly placed further restrictions on the transparency of information about manufacturing licenses issued by states. The USTR sees this as ‘a step backward’ toward providing an effective system for notifying interested parties of marketing approvals for follow-on pharmaceuticals (generics) in a manner that would allow for the early resolution of potential patent disputes. The report concedes that a small number of India’s state authorities, including in Maharashtra and Telangana, continue to operate dedicated crime enforcement units to coordinate IP enforcement activities, but points out that other sates have not followed suit or face organisational challenges.

The USTR report, like the Generalised System of Preferences (GSP) programme, is part of a strategy to use IP rights and trade policies to further a political agenda. According to media reports, a multi-ministerial delegation will be in Washington to convince the US to extend the benefits it provides to India under the GSP programme. The Trump administration has always linked the continuation of GSP benefits to  enhanced market access for its dairy products, pharma and medical devices. More recently, beneficiaries of the GSP programme have been warned not to purchase oil from Iran or face the consequences. Balancing trade-related pressures with the realities of escalating healthcare costs and national interests will only get tougher for the next government.

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