This article appeared in the April 2011 edition of INNsight newsletter

Free Trade Agreements – who benefits?

The last few months have seen a flurry of Free Trade Agreements – between the EU and Korea, the EU and India and a US-Korea FTA. All of them have multiple sections relating to a variety of industries, but of particular interest to readers of this newsletter are the bits dealing with the pharmaceutical industry.

In theory, the advantage of any FTA is that it leads to a lowering of trade barriers, increased trade between countries; extra jobs generated by the extra trade and a general improvement in prosperity all round. So why has the India-EU FTA provoked headlines such as “Thousands protest against EU-India Free Trade Agreement” (Citizen News Service) and “Indian pharma firms, NGOs oppose EU free trade deal” (Euractiv)?

The answer seems to lie in the phrase “Data Exclusivity”. In March, several thousand demonstrators marched in Delhi to protest against this aspect of a future FTA, particularly with reference to its possible impact on the availability of low-cost HIV treatments. Their concern centres on a proposal in the draft FTA for mutual recognition of Data Exclusivity between the EU and India.

However, the protesters see it in a sinister light as an attempt to force India to comply with IP rules that go beyond the requirements of TRIPS. They cited in support of their position a statement by Anand Grover who is the United Nations Special Rapporteur on the right to health. According to the UN’s Office of the High Commissioner for Human rights, Mr. Anand “warned that the EU-India draft free trade agreement could prevent millions of people gaining access to necessary, life-saving and life-prolonging medicines”

This it should be remembered by the way, is the same Human Rights Council whose membership includes such luminaries of Human Rights as Bahrain, Cuba, Kyrgyzstan, Libyan Arab Jamahiriya *(Suspended by General Assembly Resolution A/65/265 adopted on 1 March 2011.), The Russian Federation and Saudi Arabia to name just a few.

Mr. Anand continues “Millions in the developing world depend on India for generic medicines at affordable costs. Restriction of generic drug production in India will have a devastating public health impact around the world and adversely affect the right to health of millions of patients.” (Full text available at http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=10592&LangID=E%22%3Enews%20release )

An opposing perspective was presented by Brian Ager, Director General of EFPIA in a letter to the British Medical Journal responding to a BMJ editorial that supported the UN and NGO view that the EU had asked India to sacrifice access to life saving drugs in return for market access in other areas of the economy.

Mr. Ager writes about the author James Love “By his own admission he does not know this to be the case,” because the IP sections of the FTA are being conducted in secrecy. Mr. Love in his editorial took this fact as proof that the EU’s intentions are evil, but to me it seems that Mr. Ager’s statement actually makes sense – nobody outside the negotiations actually knows.

He writes further that the editorial “ignores the one aspect of these negotiations that is clearly not secret, i.e. the public positions taken by both the European Commission and the research-based pharmaceutical industry” and reminds readers of the licensing arrangements that Big Pharma has already made with many Indian generics manufacturers to give them access to HIV treatments.

(Full text at http://www.bmj.com/content/342/bmj.d1694.full/reply#bmj_el_254842 )

The EurActiv website quoted a spokesman for EU Trade Commissioner Karel de Gucht, who defended the proposals and stressed that, regarding data exclusivity, the EU was only asking for mutual recognition.

• "Should the Indian government at some point put forward legislation for data protection in respect of Indian companies, all the EU is seeking is reciprocity in respect of European companies. That is to say a fair and level playing field for both Indian and European companies," he told EurActiv.

The UNHRC and NGOs however seem to have decided, even without seeing the evidence, that the EU is guilty.

Even if they are right, though, and the EU is asking for India to implement the same Data Exclusivity period that exists in more regulated countries, what would be the consequences? Firstly, it is unlikely that it would or could be enforced retrospectively so that the low cost HIV treatments that companies such as CIPLA are already churning out would continue flowing to poor HIV patients.

Secondly, DE would be in India’s own long terms interests in the same way that its introduction of product patents for pharmaceuticals is in its own interest now that domestic companies have started to invent NCEs. India cannot have it both ways – if it wants its own inventions to be protected against copying by others, then it has to implement IP protection that also protects foreign discoveries and not just domestic inventions.

And the NGOs and editorial writers at the BMJ have to accept that inventions need someone to make the investments in discovering them and nobody is going to do that if someone else can come along and copy it straight away and free of charge. Nobody works for nothing – why should the pharmaceutical industry be any different?

If you have any questions or comments,

Please feel free to contact me

peter@interpharm-consultancy.co.uk

www.interpharm-consultancy.co.uk