Letter from MSF to the Indian Prime Minister regarding access to medicines and the EU-India FTA
Honourable Prime Minister,
Re: Access to medicines and the EU-India FTA
Médecins Sans Frontières/Doctors Without Borders (MSF) is an independent, international medical humanitarian organisation that provides emergency medical assistance to populations in distress in more than 68 countries. In order to procure quality medicines from the most affordable sources, we rely overwhelmingly on generics produced in India, which has played a pivotal role in supplying affordable generic versions of drugs used throughout the developing world.
That India has been able to play such a role is a tribute to the country’s ability to withstand commercial pressures from developed countries. India, as part of its obligations under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO TRIPS Agreement), was required to introduce a 20 year product patent regime in 2005. While the freedom of domestic manufacturers in India to operate and produce affordable versions of any essential medicine has been limited since 2005 because of its TRIPS obligations, the country’s legislators also sought to balance the imperatives of public health, by enshrining public health safeguards into the patent law and limiting the potential of multinational pharmaceutical companies to abuse the patent system. This balance is now under threat.
Today, India is once more under pressure to cave into demands from developed countries. Since 2009, MSF has been closely following the negotiations between the European Union (EU) and India on a free trade agreement (FTA). The negotiations have now reached an intense phase, with regular meetings to fast-track the conclusion of the agreement which, according to recent statements from the Commerce Minister himself, will be concluded by April 2013.
Given India’s vital role as supplier of life-saving medicines to much of the developing world, it is critical that the desire to conclude an agreement in the very near future does not happen at the expense of access to medicines. During the course of negotiations on the intellectual property (IP) chapter over the last five years, the Indian government has taken a clear stance against some of the most problematic IP provisions, such as data exclusivity and patent term extensions and the hard-fought exclusion of these provisions in 2010 and 2011 represents the greatest achievement of the Indian negotiators. Although the text has been improved on certain points thanks to the strength of the Indian negotiators, the additional remaining threats to access to medicines posed by the IP enforcement and investment provisions must be addressed.
We therefore urge you to ensure that India maintains its strong negotiating position without any compromise on IP enforcement and investment provisions, particularly:
IP Enforcement Provisions:
The European Commission is demanding that India implement a range of IP enforcement provisions which go beyond the requirement of the World Trade Organization TRIPS Agreement. The EU's proposed enforcement measures include, but are not limited to, a stricter injunction system, third party liability regime and strong border measures.
These provisions could have a range of harmful effects on the production and dissemination of generic medicines and give free rein to abuse from multinational pharmaceutical companies. These companies would merely need to claim - and not prove - that their IP is being infringed in order for a competitor’s medicines to be seized or generic production halted.
The impact of IP enforcement measures being applied in India would be felt even by countries not party to the FTA, as medicines destined for export could be delayed, seized, and destroyed due to IP enforcement disputes. The enforcement net could also implicate third parties - such as suppliers of active pharmaceutical ingredients (API) used for producing generic medicines; distributors and retailers who stock generic medicines; and even treatment providers like MSF - simply for buying or distributing generic medicines.
Indian courts are currently enjoying considerable flexibility in determining the right balance of enforcement in IP cases involving pharmaceuticals. A formal codification of enforcement measures through an FTA would threaten this. Once India has committed to a certain level of IP enforcement, it would be unable to adjust it in future without the agreement of its FTA partners.
It is therefore very important that India take a cautious approach in negotiating the IP Chapter in the FTA with the EU, clearly rejecting any further consolidation of IP enforcement measures on the basis of domestic norms, in order to safeguard the existing legal flexibility within domestic law and the judicial system, which allows the country to balance commercial interests with the constitutional right to life and health.
The most disturbing feature in the proposed investment chapter of the EU-India FTA is the investor-state dispute resolution mechanism.
An investor-state dispute resolution mechanism typically allows foreign investors and corporations to sue countries for compensation if national laws, domestic policies, court decisions or other actions interfere with the "enjoyment" of their investments – even if the government‘s actions are in accordance with its constitution and national laws.
Indian negotiators have so far taken a solid stance in resisting the inclusion of "intellectual property" within the definition of investment, meaning that the FTA could not be used by pharmaceutical companies to subject India to the so called investor-state dispute mechanism.
As a result of investment provisions in FTAs between other countries, several such disputes have already been filed by corporations against governments, in order to force a reversal of public health policies and judicial decisions on patentability. In 2012, for example, US pharmaceutical company Eli Lilly started proceedings against the government of Canada through the North American Free Trade Agreement’s (NAFTA) investor-to-state dispute mechanism, claiming that the decisions of a Canadian court to invalidate its patent on the medicine atomoxetine violated Canada’s obligations under NAFTA and the WTO. The company is seeking $100 million in compensation. In separate cases, tobacco company Philip Morris is threatening legal action against the governments of Uruguay and Australia, following attempts by these countries to introduce pictorial health warnings and plain packaging for cigarettes (tobacco). As a result of the damaging implications of such clauses, Australia has gone on record saying that they will no longer include investor-state dispute resolution clauses in its investment treaties.
Eli Lilly's and Philip Morris’s actions are possible because an FTA empowers the companies to directly challenge government policies before foreign arbitration tribunals, claiming that the policies undermine their expected future profits. The pro-public health stance recently taken by Indian courts protecting against the abuse of multinational pharmaceutical companies, as well as potential future decisions by the government to issue price controls or compulsory licences, would be directly threatened should India agree on an expansive definition of investment which includes all form of intellectual property rights.
Given the continued use of litigation by pharmaceutical companies in India, it is vital that India uphold its principled position of not accepting an investor-state dispute resolution mechanism which would subject the country to the authority of private arbitrators in secret tribunals outside of domestic courts. Pharmaceutical companies must be given no additional avenues to pressure India on policies and laws that protect access to affordable medicines.
There is already awareness in India of the harm such provisions, signed by India in the 1990s as part of bilateral investment protection agreements (BIPA), can cause. After a spate of notices, served by foreign companies seeking to sue India in investment tribunals outside of domestic courts for billions of dollars, were received by the Government, the Department of Economic Affairs recently announced a review of such provisions in existing BIPAs and a freeze on future negotiations of investment protection until a model text is developed. This decision should be upheld and should not be overridden by a perceived urgency to conclude the FTA with the EU.
We would therefore urge you to uphold the strong position held by India, both in past decades and in the current negotiations of the FTA with the EU and to recommend that all provisions tabled by the EU that harm access to affordable medicines are rejected, so that generic competition remains possible in India.
Dr Unni Karunakara
Médecins Sans Frontières