USTR’s Special 301 Process 2013 – India on Priority Watchlist


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A few years ago, a study done on a certain “of the people, by the people and for the people” governed country revealed that 62% of all its personal bankruptcy filings were due to medical bills. I’m not sure if their situation has since improved (though I hope it has) but it is with some ironic amusement that I read America’s latest USTR Special 301 Report advising India on how ‘to promote access to healthcare products’. [pg 24]. To be fair though, I haven’t read the WTO report they refer to. [Their advice relates to reducing tariffs on medicines and reducing ‘burdensome internal charges’ and ‘regulatory challenges’ that can hinder the Indian government’s efforts to promote increased access to healthcare products.]
However, the amusement turned to bemusement when I saw USTR pursuing the interests of its Big Pharma companies (who incidentally were unhappy with the report for not being tough enough) by placing India on a priority watchlist for not following their standards regarding pharmaceutical patents, amongst other things. One can hope that (while certainly corporations are people too), this ‘… for the people’ government is trying to sort out their own (non-corporation) people’s medical problems with the same vigour, for, at last check, they were still having plenty of issues with medical bills
I say ‘with the same vigour’, as it certainly takes a lot of vigour to first claim to support the Doha declaration and use of TRIPS flexibilities including Compulsory Licenses [pg 22-23], and then to attack India for pursuing its own healthcare policies while they are well within India’s international obligations and the flexibilities afforded by TRIPS. 
Just to back up a bit: What exactly is the Special 301 report? To repeat my description from an earlier post, “it is a unilateral measure taken by the USTR which essentially ranks countries according to how much the US appreciates their IP regimes, and this is used as a kind of [political] ‘shaming’ mechanism to coerce countries into ‘strengthening’ their IP regimes to match the TRIPS-plus standards that the US tries to promote.” Through the 5 reports that have come out under the Obama administration, the USTR has continued to push developing countries to implement TRIPS plus policies which would limit access to medicines.
Coming back to this year’s report:
While dedicating a full 2 pages to India [pg 38, 39], in particular, the report identified the Novartis decision and India’s first Compulsory License decision over sorafenib as areas of concern. 
Regarding the Novartis decision: 

“The United States is concerned that the recent decision by India’s Supreme Court with respect to India’s prohibition on patents for certain chemical forms absent a showing of “enhanced efficacy” may have the effect of limiting the patentability of potentially beneficial innovations. Such innovations would include drugs with fewer side effects, decreased toxicity, or improved delivery systems. Moreover, the decision appears to confirm that India’s law creates a special, additional criterion for select technologies, like pharmaceuticals, which could preclude issuance of a patent even if the applicant demonstrates that the invention is new, involves an inventive step, and is capable of industrial application.” [pg 38]

As has been mentioned repeatedly, the Novartis decision does not prevent patenting of new uses but instead paves the way for genuine innovation rather than frivolous ‘evergreening’ – something perhaps that other countries could learn from.  [See Shamnad’s elucidation here]

Regarding the IPAB’s Compulsory License decision:

In particular, India’s decision in this case to restrict patent rights of an innovator based, in part, on the innovator’s decision to import its products, rather than manufacture them in India, establishes a troubling precedent. Unless overturned, the decision could potentially compel innovators outside India – including those in sectors well beyond pharmaceuticals, such as green technology and information and communications technology – to manufacture in India in order to avoid being forced to license an invention to third parties.

To this, my first response is to question how exactly they define ‘respect’ when they earlier state:

Consistent with this view, the United States respects its trading partners’ rights to grant compulsory licenses in a manner consistent with the provisions of the TRIPS Agreement, and encourages its trading partners to consider ways to address their public health challenges while maintaining IPR systems that promote innovation. 

And secondly to point out that the decision revolved mainly around ‘the excessive pricing of an anti cancer drug Nexavar, patented by Bayer’. Quoting Jamie Love in the Huff Post, “by focusing on India’s domestic drug production rules, neglected to admit it was trying to force India to accept a $65,000 annual price for a cancer drug.”

Also relevant to this is the rather arrogant natured exchange between the USPTO deputy director Teresa Rae and the US Congress on the same issue last year wherein “the Deputy Director of the USPTO testifies before Rep. Bob Goodlatte, in the House Subcommittee on Intellectual Property that the USPTO continues to actively try to ‘educate’ and persuade Indian officials to not grant any further compulsory licenses.” Her statement was heavily criticized and later retracted and ‘clarified’. See more in my previous post here.

Other issues that the report mentioned India required improvement included increasing TPM protection, increasing criminal enforcement, increased penalties and stronger actions against counterfeit goods.  They also go on to refer to the ACTA and TPP agreements as positive developments – the dangers of which we have written about several times on this blog. [See here for KEI’s report on the rest of this year’s edition of the 301 report].

All in all, my opinion would be that any legitimacy that they may have hoped to develop through this Special 301 process is slowly getting eroded by the (ab)use of this process as such a blatant tool of representation of corporate America across the world without regard for the public interest in a number of developing countries.

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