New Delhi/New York, 25 September 2013 — On the eve of a meeting between U.S. President Barack Obama and Indian Prime Minister Manmohan Singh, Doctors Without Borders/Médecins Sans Frontières (MSF) warned that India is facing an onslaught of political pressure from the U.S. government and pharmaceutical industry in retaliation for the country’s entirely legal actions to limit abusive patenting practices and increase access to affordable generic medicines. This pressure is likely to increase through negotiations of a potential bilateral investment treaty between the US and India, which is on the agenda for the meeting.
“Every country has the right to take steps to increase access to medicines and implement a patent system in line with its public health needs,” said Leena Menghaney, Manager of MSF’s Access Campaign in India. “Even though India is acting completely within its rights, the country must now deal with unrelenting, unwarranted and purposely misleading attacks from the multinational pharmaceutical industry and U.S. government officials.”
India is a critical producer of affordable medicines. Competition among generic producers in India has brought the price of medicines to treat diseases such as HIV, TB and cancer down by more than 90 percent. The majority of the antiretroviral medicines purchased by the U.S. government’s global AIDS program come from India, and more than 80% of the HIV medicines MSF uses to treat more than 280,000 people with HIV in 21 countries are generics from India. But the policies that make India the ‘pharmacy of the developing world’ are under threat as routine decisions by India’s patent offices and courts are subject to international scrutiny and India faces increased political pressure from the US.
Several recent legal decisions in India have set the stage for the heightened tensions. Earlier this year, Novartis lost a seven-year-battle to claim a patent on the salt form of the cancer drug imatinib, marketed as Gleevec. The Indian Supreme Court ruled that this new formulation did not meet the patentability requirement in Indian patent law that limits the common pharmaceutical industry practice of ‘evergreening’—extending drug patents on existing drugs to lengthen monopolies.
In March of this year, the appellate court in India upheld the ‘compulsory license’ for a kidney cancer drug, which at nearly $4,500 per person per month for Bayer’s patented version, the Patent Controller deemed unaffordable in the country. As a result, a generic version was made available for 97% less. This year, India’s health ministry set up an independent expert committee to identify exorbitantly-priced drugs for which further compulsory licenses may be issued.
These decisions by the Indian judiciary are compliant with all existing World Trade Organization rules on trade including those outlined in the Agreement on Trade Related Aspects of Intellectual Property (TRIPS) and the Doha Declaration on TRIPS and Public Health, both of which defend access to existing medicines by allowing countries to use flexibilities such as patent oppositions and compulsory licenses to overcome intellectual property barriers.
Nevertheless, some U.S. pharmaceutical companies, led by Pfizer, are crying foul, and are wrongly alleging that India’s patent system is not consistent with TRIPS. As a result, the pharmaceutical lobby is now engaged in a concerted effort to pressure India to change its intellectual property laws. In June, 170 members of U.S. Congress wrote a letter to President Obama urging him to send a “strong signal” to India’s high-level officials about its intellectual property policies, which was preceded by Congressional hearings designed in part to criticize India’s robust defense of public health. Several interest groups have been created to lobby the US government about India’s policies and, most recently, U.S. Congressional trade leaders have requested that the US International Trade Commission initiate an official investigation on India’s intellectual property laws.
“Indian policymakers and courts have taken steps that are entirely legal under international trade rules to keep medicines affordable, and should not be facing any retaliatory tactics whatsoever,” said Judit Rius, manager of MSF’s Access Campaign in the US. “We rely on affordable medicines produced in India to do our medical work across the world, so we are very concerned about the pressure India is facing. Intense US pressure is clearly aimed at discouraging India and other developing countries from using important legal flexibilities in the interest of public health in the future.”
This pressure will only increase as talks on a new trade deal get underway. Any new agreement would almost certainly contain provisions allowing pharmaceutical companies to sue India outside of domestic courts. Several such disputes have already been filed by US corporations against governments. Tobacco company Philip Morris, using a provision in an investment agreement, is suing Australia for hundreds of millions of dollars over a government law that mandates plain packaging on cigarette packs. This month, US pharmaceutical company Eli Lilly used the very same tactics to start proceedings against Canada in a foreign tribunal, claiming $500 million as compensation on the grounds that a Canadian court’s decisions to invalidate patents on some of the company’s best-selling medicines deprived it of future profits and interfere with the enjoyment of its investments.
The US Government has a policy of negotiating and exerting pressure on governments to give foreign investors the right to sue governments—known as Investor-State Dispute Settlement—for high amounts of damages if a law or policy harms their investment. India will face the same pressure to include such provisions as it pushes to negotiate a trade deal with the U.S.
“In a world where medicines are increasingly being patented, which blocks the production of more affordable generic versions, we’re going to see more and more people become sick or die because the medicines they need to stay alive are simply too expensive,” Menghaney said.