India approaches WTO as yet another seizure takes place

Even as India and other developing countries are on the verge of filing a formal complaint at the WTO with regard to the 17 highly controversial seizures which have occurred since late last year (which we have posted several times on here) yet another consignment of drugs has been seized last month on grounds of patent violation, this time in France. The consignment was of 1.74 million pills of the anti-platelet drug clopidogrel from Mumbai-based Macleods Pharma and was destined for Venezuela. Clopidogrel, which is used for blood clots, is marketed as Plavix by US-based Bristol-Myers Squibb and French major Sanofi Aventis. It was the second-largest selling drug in 2008, with global sales of about $8.63 billion as per IMS Health estimates. India has taken this up with the WTO council.

Empty Promises and wasted efforts
This latest seizure comes despite the previous reassurances from the European Commission that they would be putting in place a system to ensure that legitimate generics aren’t seized. India has already attempted several bilateral efforts with the EC at finding a satisfactory solution, but these have been to no avail as nothing concrete has come out of these efforts. The problematic regulatory provision – EC Regulation 1383/2003, which is inconsistent with the provisions of GATT, the TRIPS and against the spirit behind the Doha declaration, has been one of the main areas of discussion. According to IP-Watch, “European delegates at the time said the regulation – EC 1383/2003 – was intended to guard against dangerous drugs, and in an explanatory note from 31 July quote the European Federation of Pharmaceutical Industries and Associations saying it is not the policy of their members to “use the powers of detention … to prevent the flow of legitimate generics.” However, as can be seen from the latest seizure, that this practice still continues. The Indian pharmaceutical industry, worth Rs 90,000 crores with Rs 45,000 crores worth of exports is being threatened by these unnecessary, and possibly illegal seizures.

To India and other developing countries being affected by the seizures, it is more of a question of access to medicine than a a mere question of trade being affected. This is especially true in cases of countries which do not have the capacity to manufacture local drugs of their own and which rely on generic imports which are upto 80% cheaper than their alternate versions. India’s statement at the WTO reflected its lack of confidence in the EC’s actions in this regard as long as Regulation 1383/2003 remained unamended. As pointed out in earlier posts, these seizures may also end up leading to higher costs related to the drugs since there is it is obviously much safer to re-route the drugs in transit through a longer, but ‘safer’ route. In the same vein, MSF (Doctors without Borders), an international organisation which provides medical aid in developing and least developed countries, has voiced its concerns over these seizures affecting their own transitional storage of drugs in the EU.

Smacking of Double Standards
While the EU is claiming to be undertaking a review of Regulation 1383/2003, there are suspicions of it wanting to enforce similar provisions globally through Free Trade Agreements and the upcoming secretive Anti-Counterfeiting Trade Agreement (ACTA). Last month, Oxfam International and Health Action International Europe came out with a report accusing the EU of “contradicting world trade rules by putting the interests of big drug companies before the two billion people in the world who cannot access essential medicines”. According to the report, the EU has been putting pressure on developing countries to give up their rights to affordable generic medicines (which they are entitled to under global trade rules), and on insisting on TRIPS plus provisions in bilateral trade agreements. At the same time however, they are pushing for a decrease in their own domestic drug prices. In the words of Elise Ford, the head of Oxfam’s EU Advocacy Office in Brussels, “EU is guilty of double standards. One rule for the rich and another for the poor”. She goes on to say, “While the EU is pushing for a range of intellectual property (IP) rights measures that would support the commercial interests of the pharmaceutical industry within the EU, and are introducing TRIPS-plus rules through agreements with developing countries, the EU is damaging the opportunities for innovation and access to medicines in developing countries”.

Retaliatory Action by India?
As part of its efforts at putting pressure on the EU to stop the seizing of drugs in transit, the ministry of commerce may be asking pharmaceutical companies exporting from India to boycott KLM, the Dutch airlines. Currently, KLM is one of the most widely used airlines for transport of cargo by the huge Indian pharmaceutical industry to transport consignments to various Latin American and African countries. A boycott by the industry would lead to significant losses for the Netherlands based airlines.