Access to medicines

Mumbai: The Trade-Related Intellectual Property Rights (Trips) Council was given a mandate on 14 November 2001 by the WTO Ministerial Conference in Doha. It stated: "We recognise that WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the Trips Agreement. We instruct the Council for Trips to find an expeditious solution to this problem and to report to the General Council before the end of 2002."

The Trips Council deliberated this mandate for over one year, but failed to find a solution. It met formally and informally. It met representatives of the pharmaceutical industry — both of innovative and generic industry. It debated definitions of "pharmaceutical products" and "epidemics." It sought to learn the difference between API (bulk drug) and Formulation.

I participated in an informal meeting of the negotiators in Norway in July 2002. We debated these issues, concerns of innovative companies and solutions that will safeguard their interests. But, at the end of the year, all these efforts failed to produce a solution. Though 143 countries agreed to a compromise, one did not, jeopardising the future of world trade and letting people of poor countries die of HIV/AIDS and other public health problems.

The question that one may like to seek answer to is why the talks failed. Are the rich countries not concerned about people dying of disease in the poor countries? Are they under pressure of their pharmaceutical industry to protect their commercial interests? Are they worried that the new investments in R&D will shy away? In order to find a reasonable answer, we must first understand the totality of the situation.

One, there is enough evidence to believe that the pharmaceutical industry — the Big Pharma, as they are known — has significant influence over the present US administration.

Two, whether the rich countries are concerned or not about people of poor countries is a political judgement and I would leave it to you, but you must assess the level of their concern.

Three, for the first time, the Big Pharma is facing a real threat from the generics. In the past, they could stall the entry of generics. The US for instance has as many as 150 molecules which are off-patent, but their generic equivalents have not yet found entry in the market.

Four, the last five years witnessed aggressive registrations and market penetration by Indian generics both in the regulated and non-regulated markets, challenging their hegemony, even in off-patent markets. Please look at these numbers for a moment:

The regulated markets of North America and Western Europe now account for almost 40 per cent of India's exports of drugs and pharmaceuticals.

Five, the quality and cost of Indian generics posed yet another challenge. The Big Pharma tried to brush aside this by creating doubts in the minds of people about the quality (calling them "untested and unsafe"), but did not succeed.

The onslaught of the Indian generics has foxed the Big Pharma. Never before had they seen such ruthless, varied and knowledge-based challenge to their commercial interests. They also realised that the vigilant pharmaceutical industry in India will not let them bind it in a legislative framework that suits their commercial interests — as they did in some other markets of the world.

Perhaps, now they think that the only way to contain this challenge from the Indian generics is to force the Trips Council to adopt a legislative framework that can restrain the aggressive and ambitious designs of the Indian generics. Hence, the first target in the Trips Council negotiations is scope of disease: limit the flexibility to a few specified (TB, malaria and HIV/AIDS) diseases. If the people of poor countries suffer from any other disease, they must die or their governments must come to the non-transparent and time-consuming mechanism of the Trips Council.

The second target is countries: restrict eligibility of countries that can use the proposed mechanism. China, Hong Kong, Singapore and Taiwan would have been ineligible under that regime for importing the drugs required for the public health problem arising from a new disease like severe acute respiratory syndrome (SARS). The third target is to so complicate the process, in the name of safeguards, that the transaction cost will make the supply from a third country nonviable.

Thus, on the one hand, the rich countries work in the Trips Council to create a deadlock, tire out poor countries and frustrate their efforts to find access to affordable drugs, hoping to force them in signing a deal that is not even worth the paper it is signed on. On the other hand, the rich countries are regrouping under the WIPO to have in place a uniform patent law that defies sovereignty of nations.

The patentability, bolar exception, data exclusivity will all be determined under the Substantive Patent Law Treaty (SPLT), which will take away power of the national governments to use IPR as a tool for development. Then, in the guise of helping patent offices of the developing countries and to help them clear the backlog of patent applications, it is proposed to introduce Global Patent System, doing away with national phase and jurisdiction. And, on top of these, the rich countries are now pushing for sui generis protection of databases, which can claim 15- or 25-year period of protection.

This is not depiction of an imaginary world. It is real. It is happening today. Trips Council is deadlocked. SPLT is under negotiations for the last two years, the proposal for Global Patenting System is already mooted by the WIPO and the 1996 proposal for sui generic protection of databases is activated. The game plan is simple. If we cannot influence the Indian legislative process, we just take away the power to legislate in the field of IPRs. We then bind the Indian generics from challenging the hegemony of the Big Pharma.

What should then India do to protect its commercial interests and at the same time meet humanitarian needs of the least developed and the developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector.

To conclude, I would submit that we should: First, work to consolidate position of the Developing Country Group and Africa Group. As a part of this effort:

• The industry should join hands with the government in capacity building of these countries.
• Find ways of developing a trade agreement with the least developed countries to provide them access to the Indian market.
• Work closely with international organisations such as WHO and UNAIDS to find a solution outside of Trips Council to meet the urgent need of medicines of the countries with insufficient capacity.

Each of these elements is important for consolidating our position with the Developing Country Group and the Africa Group.

Second, enlarge India Development Initiative introduced in Union Budget 2003-04, to provide funding of Rs 1,000 crore for leveraging exports of IT (hardware and software) and pharmaceuticals (machinery, products and services) to the developing countries.

Third, share with the pharmaceutical industry the developments in negotiations at the WIPO (SPLT and Sui Generis Protection of Databases) and work jointly with the pharmaceutical industry to alert the governments of the least developed and developing countries to the dangers ahead.

Fourth, work to institutionalise a mechanism that encourages brain storming with private sector to develop a strategy for the trade negotiations.

Shah is the secretary general of Indian Pharmaceutical Alliance