India drug industry says US-led trade deal will raise prices

Print 21 October 2015
Zeba Siddiqui / Reuters

NEW DELHI, Oct 16 (Reuters) - Leaders of India's $15 billion pharmaceuticals industry, a major supplier of affordable generics to the world, have joined public health activists in criticising a new U.S.-led trade deal they say will delay the arrival of new cheap drugs.

The impact of the Trans-Pacific Partnership (TPP) struck last week between 12 nations, which include the United States but not India, is still being studied by Indian drug makers. But in initial comments, industry executives said provisions in the deal that shield new drug data from competitors would hurt their business in those nations.

"The generics decline will be discernible from the end of 2017," said D.G. Shah, secretary general of an industry group representing some of India's top drug makers, including Sun Pharmaceutical Industries Ltd and Dr Reddy's Laboratories Ltd.

Countries from the United States to Africa rely on India as a supplier of cheap medicines, earning it the "pharmacy to the world" nickname.

Other critics of the TPP deal, including advocacy groups such as Medecins Sans Frontieres, say it will drive up the price of medicines around the world in the long term.

U.S. Democratic party presidential candidate Hillary Clinton weighed in last week, warning the deal seemed to put the interests of big U.S. drug companies ahead of patients.

Jagdish Bhagwati, a professor of economics and law at Columbia University, considered one of the world's leading trade economists, said the deal was part of a trend to include trade-unrelated features on labour and intellectual property into trade deals, at the behest of U.S. lobbies.

"TPP is a model of such behaviour and deplorable architecture," he said.

The deal, a central tenet of U.S. President Barack Obama's focus on Asia, is pending ratification by member countries and approval by the U.S. Congress.

Under current global rules drug manufacturers can sell products they develop exclusively for at least 20 years, after which generic manufacturers can produce cheaper copies.

Citing details leaked by Wikileaks, as the text has not been formally released, Shah said TPP sought to extend patent life, make it easier to 'evergreen' patents, and abolish rules allowing generic companies to undertake product development during the life of the patent.

"These and many other provisions will delay the launch of generics in the USA and other TPP member states," said Shah, who heads the Indian Pharmaceutical Alliance.

BIOGEN FRONTIER

One focus of criticism is a clause in the deal that would allow companies in member countries to keep clinical data on new biological drugs hidden for up to eight years.

Since some TPP countries do not currently afford such protections, the clause would effectively delay the launch of cheaper forms, or biosimilars, of such drugs by other companies, said Judit Rius Sanjuan, a legal policy adviser for MSF in New York.

Campaigners fear such provisions could become a global norm.

Even so, the clinical data clause was not as restrictive as the 12 years the U.S. pharmaceutical industry wanted.

"There has been a push back from member countries, which has reduced the data exclusivity period," said Kiran Mazumdar Shaw, chief of India's biggest biotech firm Biocon Ltd. "(This) should work to the advantage of Indian biopharma."

And Amitabh Kant, secretary of India's Department for Industrial Policy and Promotion, said it was too early to say what impact the deal would have on the Indian industry.

"(TPP) is a long-term process," Kant told Reuters, adding that India was keen to reach an agreement on a regional trade pact with South East Asia and China, and aspired to become a global pharmaceutical manufacturing centre.

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