SpicyIP has been following the interesting developments surrounding the seizures of legitimate consignments of generic medicines.
With all our posts have reported the indignation of the generics, customs regulations and even India’s options at the WTO, an interesting turn of events has led us to revisit the topic. Business Standard now report that the “big daddy”, PhRMA – which represents a large number of US based drugs firms- has finally spoken out against such seizures of legitimate consignments of drugs meant for supply in developing country.
This statement was released after a PhRMA official visited
Ironically, this statement was issued as a response to the seizure of 17 consignments of ‘genuine generic medicines’ from India at various European ports alleging intellectual property violations, upon complaints being lodged by large drug manufacturers, including PhRMA members.
In what seems surprisingly strongly worded, the PhRMA has said that even if individual members of the association have taken advantage of the rules in their countries, this could not be construed in any manner to be an endorsement by the Association itself. Speaking through their Deputy Vice President, the PhRMA has stated that suspect counterfeit goods may be temporarily detained, but must be released “(O)nce it is proven otherwise…irrespective of its patent (intellectual property) status in the European
What does this mean? One, it seems that all members of the PhRMA are not in agreement over the seizure of legitimate low cost drugs, leading the Association to step in and create such a distinction.
Two, it also means that if a case is being put forth by India at the WTO, then the same might be strengthened since a major player in the pharmaceutical scene has itself made a statement which in effect condemns the rules that allow for such seizures of genuine drug consignments.
SpicyIP will keep a close watch will be kept on the events that follow now, but would definitely invite comments from our readers as to what they believe are the implications of such a statement by the PhRMA.
I would think the statement – especially the wording “(O)nce it is proven otherwise…irrespective of its patent (intellectual property) status in the European Union” – make clear that big Pharma does not support judging transiting generics (and other goods) against the law of the transit country. At least where there is no risk of diversion to the local markets of the transit country.
This in turn would indicate that Pharma does not support the operation of a ‘manufacturing fiction’ under the EC Border Measure Regulation (see its recital 10) – since it is this fiction only under which transits could be held liable for IP infringements in the transit country without any threat of trade diversion.
Many reports on border measures taken in the European Union suffer from the sloppy use of the word “seizure”. This is also the case for this post, which has taken the language from the Business Standard without further thoughts.
As far as I am aware, particularly through Spicy, a number of consignments temporarily detained were subsequently released, with some proceeding to final destination, others returning upon the exporter’s instructions to India, and still others having been abandoned by the exporter.
Emotions also run high in this matter, with certain NGOs – and even an IGO – fuelling the “debate” (by the way, have you noticed that some press releases have come just one or two days before an important international meeting, such a short span of time having the “advantage” that the countries which have strong opinions about the issue are hardly able to check the facts?).
A sober analysis should start with the finding that 17 customs actions do not amount to “frequent seizures of Indian medicines on transit”. It would also reveal that the rights holders and the Dutch and German customs had good prima facie grounds for their actions in a number of those cases that were given (bad) publicity. To name a few: transit through an intermediary in Dubai, APIs easily divertable into the European Union, number of pills that is significantly higher than the population of the destination country.
Finally, one should read carefully Richard Kjeldgaard’s statement: “…the association is of the view that seizures leading to destruction of legitimate consignments should not happen” literally means that the association supports the obvious. If the consignment is legitimate, it will be released! This is the law! The important addition he has made is that the IP status of the goods in the European Union should not be relevant to legitimacy, and one can reasonably expect that industry agrees with this. This being said, “PhRMA supports temporary detention of products if they are suspected to be counterfeit”. So, “’Big Daddy’ … speaks out…” has some important limitations. Limitations that are fair and reasonable.
Dear Mr. Ruse-Khan and Mr. Seppi,
Thank you for your comments and please accept my apologies for the late response.
@ Mr. Seppi, I wholeheartedly agree that the word seizure has been used loosely by most reporters including myself. However, I would grant myself the benefit of stating herein that I had reasonably reported the statement of the PhRMA in terms of their support for only those seizures where the goods are legitimate.
@ Mr. Ruse-Khan. Thank you for pointing out recital 10 to me. I was unaware of this provision, and it does provide an interesting angle to the statement made.