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2015 USTR Special 301 Report: Reactions and the way forward

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Express Pharma presents reactions to the recently released 2015 USTR Special 301 Report

‘OPPI welcomes the continued focus on strengthening IPR in India’

Ranjana Smetacek, Director General, Organisation of Pharmaceutical Producers of India

The Draft IPR Policy is a positive step towards an IP regime that has the potential to support and drive a number of economic and socio-cultural benefits. Our country already has the elements required to realise the PM’s ‘Make in India’ vision: consistent growth, a highly educated workforce and established science-based research institutions. We can extend ‘Make in India’ to ‘Develop in India’ and ‘Innovate in India’, if we develop a robust, predictable, and enforceable legal framework for the protection of IPR.

Our PM was pretty categorical in his view that India’s patent laws should be brought on par with global standards, to make Asia’s third largest economy a hub for outsourced creative services. He has been quoted on April 24, as saying, “If we don’t work towards bringing our intellectual property rights (IPR) at par with global parameters, then the world will not keep relations with us. If we give confidence to the world on IPR, then we can become a destination globally for their creative work, when he spoke at the first Global Exhibition on Services (GES).


‘We should not agree to anything that is TRIPS Plus’

Daara Patel, Secretary-General, IDMA

India is already well aligned with all the requirements of TRIPS. India’s Patent Act 1970 as amended, is recognised as a breakthrough regulation which is also adopted and followed by many other leading countries in the world.

Special mention should be made of the Section 3(d) of our Patent Act which only allows genuine innovation and blocks evergreening of patents by minor improvements. A patent is granted only if there is a significant therapeutic improvement or advantage. This is also commended by leading international organisations like WHO, UN and leading global NGOs like MSF, PEPFAR, Clinton Foundation etc. I would strongly recommend that we do not tamper with the provisions of our landmark Patents Law which is fairly balanced and pro-people. I would like to reiterate that we should not agree to anything that is TRIPS Plus!


There are common elements and threads between the PMOs and the Commerce Ministry’s positions’

Dr Gopakumar G Nair, IPR Sub Committe Chairman, IDMA

India has positioned itself as a “Pharmacy of the World”. India is emerging or poised to emerge as a superpower. Divergence of views including in IPR and patents is only naturally expected, given the past, present and future of global economy and economies and current status of member nations or regions governing global treaties and trade in the past, treaties such as WTO and TRIPS emerged from extensive discussions, deliberations, debates and negotiations.

Negotiations and the discussion process and the exchange of views associated with bilateral or multilateral negotiations help resolve distances and differences in positions and perceptions of issues and policies. Having successfully negotiated the WTO and TRIPS nearly 20 to 25 years ago, India needs to be prepared to discuss and deliberate on all contentious subject matters of mutual interest. Having faced the new product patent regime and surfed through the early turbulent waters, India should gain in self- confidence and move on from a highly defensive position and posture to one that befits a global leader of tomorrow.

Extreme positions and views on IPR as in other areas, is not the order of the day. Over the past two to three decades, the institution and instrument of IPR especially patents have been monopolistically extended by the Big Pharma and the government supporting their views, so much so that the delicate balance which is so sacrosanct to the statute of patents between the rights of the users (patients) and the rights of the patentees (assignees / licencees) have been unduly tilted in favour of extremely monopolistic interests. With the advent of WTO/ TRIPS, the balanced views of developing countries such as BRICS and India in particular, has come to be heard and debated globally.

Unfortunately, examples such as that of Gleevec has been unduly and unfairly highlighted against India, even though Gleevec being a pre -95 molecule did not deserve absolute monopoly in India.

The most contentious subject matter of S.3(d) in its present form was most essential to prevent undue evergreening, especially in the transition phase. S. 3(d) has done its job and the international community has taken note of its contribution. Relevance of 3(d) in its present form may be opened for a debate and deliberation, even though it is India’s position that it is equally useful and adversely impacting incremental innovations of MNCs as well as research based Indian companies.

Data Protection and Data Exclusivity though not directly related to TRIPS, may continue to be discussed and the implications as well the extent of implementation be debated. These being related primarily to the regulatory framework of DCGI and CDSCO, the current initiatives to join as an observer on PIC or PICS (Pharma Inspection Council and Co-operations), may cover these subjects also on the regulatory front.

The threat of TPP and other non-multilateral and deliberately secret treaty negotiations, excluding India are on the anvil. Though such restrictive and NTB (non tariff barrier) blockades are as much detrimental to the people and patents of those negotiating members, being the “Pharmacy of the World”, India has equal responsibility and obligation to keep India’s generic medicines affordably accessible to patients of these developing as well as developed countries. To that extent, India must continue the dialogue and remove apprehensions that India’s IPR regime is not globally compliant to TRIPS or WTO.

It is in this context that we at IDMA believe that there are common elements and threads between the PMO’s and the Commerce Ministry’s positions. India should do what is in the best interest of India. This will and should include the interests (including export –based, research-based, and also “Make in India” –based) of the Indian pharma industry.


‘Confusion on IPR policy prevents investment’

Roger Bate, Economist, Resident Fellow of the American Enterprise Institute

I think what the discussion within India shows is that on the one hand India can just about defend its IP stance in court, but everyone knows that India’s IP regime provides uncertainty to investors (foreign and domestic) and this is what PM Modi was getting at.

The spirit of TRIPS may not have been upheld with the Novartis Gleevec decision, but one can say that the letter of the law, as the Supreme Court was asked to interpret, was applied, but that doesn’t mean the decision was fair, or the best for investment or even patients.

India needs to decide whether it really wants to encourage investment in domestic research or just maintain a copycat drug industry. Right now everyone is confused and confusion prevents investment.


The Special 301 Report is an annual swat at India’

Professor Brook Baker, Northeastern U School of Law, and Senior Policy Analyst, Health GAP

While continuing to press meritless claims, based solely on the wish list of US IP industries, the USTR also gleefully praises some accommodationist signals from the Modi government. For example, the USTR Special 301 Report praises the establishment of a domestic IPR-focused working on India IP Policy and the access the US has both to this policy undertaking and to a separate IPR Working Group Process where the US can directly engage Indian policy makers on the US IPR goals (p. 45-46). The Report also directly references Prime Minister Modi’s statement in April recommending that India align its patents laws with international standards and encourages India expeditiously to undertake this initiative (p. 48). Finally, the Report favourably mentions what it considers to be positive development on the data exclusivity/monopoly front (p. 50).

This may be a cat-and-mouse game, but make no mistake who is the cat and who is the cat’s master. The US will continue to playfully bat India around with its paws, seeking its acquiescence to the monopoly intentions of Big Pharma and other IP-based transnationals. At the same time, the cat is sizing up India to eliminate it as a competitor for the pleasure and profits of the US’s IP behemoths. The Special 301 Report is an annual swat at India and other US trading partners signaling the strengths of IP monopolies and the US’s obedience to their demands. India’s interests, and the interests of people in India and elsewhere to more affordable access to medicines, agricultural inputs, and green technologies, are not served by capitulating to monopoly interests. The sooner India clarifies its anti-monopoly stance, the more secure the right to health will be.


Need to look at IPR as an opportunity, not impediment’

Ranjit Shahani, Vice Chairman and Managing Director, Novartis India

The PM is absolutely right in saying “India needs to work on IPR guidelines matching global standards”. Bringing India’s IP regime in line with international agreements and practice will establish India as a destination for innovation. While we commend the progress India has made in advancing IPRs and the positive steps taken toward complying with the TRIPS Agreement, more needs to be done to align this increasingly important industrial country with international standards. We need to have a predictable and transparent system in place.

For the research-based pharma industry, some areas of the law—patentability standards, lack of data protection, local working requirements—undermine India’s ability to capitalise on the benefits of strong intellectual property rights protection. Effective patent systems help patients because incentives stimulate long-term research and development efforts needed to develop better medicines. We believe that changes in the patent law will also help India’s pharma companies. India is an emerging economy with a potentially world-class pharma industry. With additional improvements in its intellectual property regime, India is poised to make significant contributions to public health through innovation, not only within India, but around the globe.

In the TPP, countries are seeking to establish a comprehensive framework that will encourage trade liberalisation and economic growth. In the life sciences area, the TPP, through ensuring that partner countries adopt strong IP policies, will foster economic conditions that will provide proper incentives for innovative pharma companies to continue to make the investments required to bring new therapies to market that improve the quality of patient care. Barriers, such as those I’ve outlined, discourage pharma innovation and impede investment and ultimately limit economic growth and access and are against our shared interest of delivering the most effective healthcare possible.

Looking to weaken IP protection will certainly not resolve the many challenges that healthcare faces in India. Pro-innovation policies and increased access to medicines are not mutually exclusive; rather they are two sides of the same coin and together are in the interests of the patient. It is about time that we as a country look at world class IPR as an opportunity rather than an impediment.


First make improvements in government infrastructure that implement IPR laws’

Dr Milind Antani, partner in charge of pharma-life sciences and healthcare practice;

Ajay Chandru and Aarushi Jain, Senior Members, IP team, Nishith Desai Associates

What will be the impact/repercussions of the 2015 USTR report on the IPR policy discussion/debate in India? PM Modi recently stated that India needs to align with international IPR laws, but his Commerce Ministry head Nirmala Seetharaman says that India is in line with TRIPS.There are indications that the the mother organisation of PM Modi’s BJP party, the RSS, too are not in favour of changing India’s IPR laws.

Although PM Modi made a statement that Indian IPR laws need to comply with international standards, the question to consider is: what exactly are these international standards? As such, there is only one international standard for protecting IPR, i.e the TRIPS Agreement, which India is a member of in any case. India’s IPR laws are complaint with the TRIPS Agreement. The Commerce Ministry head Nirmala Seetharaman has also emphasised in her statement that India is complaint with TRIPS. Thus, if, any member country including the US believes that Indian laws are not complaint with TRIPS they have recourse to the WTO Dispute Settlement Body (DSB), being the relevant body having jurisdiction to determine if country’s laws are complaint with TRIPS or not. Making generic statements about India’s IPR laws not being up to the mark is unwarranted in that sense.

It is no secret that Big Pharma believes that Section 3 (d) and compulsory licensing provision in the Indian Patent Act is not in complaint with the TRIPS Agreement. At the same time, India has taken a stand that Section 3 (d) of the Indian Patents Act and compulsory licensing provisions are TRIPS compliant and are in line with the flexibilities provided in the TRIPS agreement. Validity of these provisions is again a question for the WTO DSB to decide. There are certain other provisions such as data exclusivity and patent linkage provisions which are TRIPS plus provisions that have been heavily advocated by the Big Pharma lobby and US to be adopted by India. Adoption of these provisions is solely at India’s discretion.

India is already on a reformation track in relation to its IPR laws with the constitution of an IPR think tank last year which has created the draft National IPR Policy. The draft National IPR Policy has been heavily criticised by various stakeholders especially the public health advocates. This has reignited the debate on whether do we need a reformation of the IPR laws, when we are complaint with the TRIPS Agreement. This has also raised concerns that the reformation in IPR laws is being initiated at the behest of Big Pharma through the US Government and India might make certain concession in their IPR Laws and incorporate certain TRIPS Plus flexibilities to attract foreign investment. Any kind of reformation especially in patent laws, which will have an adverse effect on the public health (by raising the prices of the life-saving drugs, for instance) is going to result in a huge public outcry. Further, any such changes to the patent law not only affect the people in India but also other developing and least developing countries to which the Indian generic industry exports these lifesaving drugs. Thus, the government should tread on this path very carefully.

What then is the way forward for India on IPR policy, given that other pacts like the TPP, etc are also being negotiated?

India and US are in the process of negotiating and inking a Bilateral Investment Treaty (BIT) and there is a possibility that BIT may require India to adhere to certain TRIPS Plus flexible standards. In the past US has used such regional and bi-lateral trade agreement to force countries to enact TRIPS Plus standards. A BIT unlike a trade agreement also gives recourse to an individual investor to the dispute resolution mechanism as envisaged in the BIT, if the terms of BIT have not been implemented and the same has affected the investor’s investment in India whereas in case of most trade agreement it’s the member country, which has the recourse to the dispute resolution mechanism. However, it is pre-mature to comment on the effect of BIT in relation to the IPR until the draft of the treaty is released.

The best way to move forward on IPR Policy is first to make improvements in the government infrastructure that implement the IPR laws, which is the patent and trademark office. As a priority, government should focus on improving the existing functioning and efficiency of patent and trademark offices, since these offices are understaffed and lack essential resources to dispense their duties because of which there is a huge of pendency of patent applications and trademark applications.


‘Industry should not get unduly concerned about the USTR report’

D G Shah, Secretary General of Indian Pharmaceutical Alliance (IPA) and CEO, Vision Consulting Group

USTR has essentially has been a mouthpiece of PhRMA and BIO. Joseph Stiglitz, Nobel Prize Winner in Economics, while talking to the TPP negotiators about IPR and medicines in New York had recently said that the USTR does not reflect the views of the American society.

It is the only discordant voice in an otherwise growing friendly economic relationship between the two countries. The USTR blindly reiterates in its reports what a section of the US pharma and biotech industry writes to protect their narrow and short term commercial interests.

The Government of India is mindful of this and it appears that it has decided to focus on other sectors of the economy such as defense procurement and local production, smart cities, nuclear reactors, energy, etc. to neutralise the USTR.

The industry should also not get unduly concerned of these reports of the USTR. They are biased, lack objectivity and (are) without evidence.

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