Busting the Drug Mafia: Commerce Min Responds on CL Assurance

The storm over the Indian government’s “private assurances” to the American industry groups continues to rage, even as the Ministry of Commerce and Industry issued a press release last night. Its significance and brevity (and the significance of its brevity, perhaps?) mean that it merits full reproduction:

“There have been recent media reports that the Government of India has privately assured that it will not issue any more compulsory license. It is hereby clarified that such reports are factually incorrect. In this regard, it may be noted that India has a well-established TRIPS compliant legislative, administrative and judicial framework to safeguard IPRs. Under the Doha Declaration on the TRIPS Agreement Public Health, each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.

Even as Government of India is conscious of the need to spur innovation and protect individual rights, it retains the sovereign right to utilize the flexibilities provided in the international IPR regime It may be noted that to date, there has been only one case of compulsory license in India and that too after a well-thought out and laid down process, which was subsequently upheld right up to the highest Court of the land.”

While the response is definitely more reassuring than the dignified silence of the government in the last month since the issue flared up, it reads like the last chapter of a badly written thriller – it leaves way too many loose ends untied. It directs no condemnation against bodies such as the USIBC, which seems to have made blatantly false statements on Indian policy in a governmental proceeding that could have serious implications for Indo-US relations. Let alone the threat of legal action for the ostensible misinformation, the Ministry’s reaction fails to even proffer an admonition.

This lack of rightful indignation begs the question: was there really nothing said to US lobbies on CLs? Or were there, in the words of the Indian Drug Manufacturers’ Association’s TR Gopalakrishnan, “just casual, verbal assurances which often happen during talks” that represent a molehill to the Ministry but a mountain to the USIBC? There exists the other, more damning alternative, as well – an explicit assurance as indicated in the USIBC’s submission, and a confirmation of civil society’s worst fears.

It would serve us well to recognise that organisations such as the USIBC are primarily comprised of market players, and act to preserve incentives. The Special 301 process offers the incentive of being able to frame Indian IP policy in a manner that protects innovator investment and chokes generic competition. The logical way of reaching this end would be to bark incessantly at the very existence of Section 84 on the statute book, ratcheting up the pressure through yet another critical Special 301 Report. Instead, organisations such as the USIBC have piped down about Section 84 and recognised “private assurances” as an acceptable outcome. The only possible benefit that the lobby could gain from inserting this into their submissions was to subtly put these assurances on the public record without (hopefully) attracting too much scrutiny from the media and from civil society. If this was the plan, then it seems to have backfired.

Viewed from this angle, it becomes impossible to reconcile the Ministry’s response with the USIBC’s submission. The Big Pharma lobby only makes comments that further its ends, and a comment that is anything but absolutely condemnatory of Section 84 entails a tradeoff. If an assurance was, indeed made, then we have a readymade explanation for the incentives that informed the USIBC’s decision to mention it in its comments (the need to place such private assurances in the public record). If no assurance was made, then we’re left with no explanation for the USIBC’s actions whatsoever – an absurdity, considering that it is a market player that takes rational decisions.

Another factor that merits consideration is the timing of the Ministry’s response. It has taken over a month for the Ministry to react with a simple dismissal of the claims made in the USIBC’s submission – a dismissal that could have been proffered much earlier. Of course, one explanation for this could be that this is the usual amount of time taken by a large, complex body such as the Ministry to react to news reports. Another explanation, however, could be that the Ministry has performed a volte face in response to the near-unanimous chorus of criticism in the media by academics and activists.

The latest on this front comes from Prof. Srividhya Ragavan. Writing in The Hindu, Prof. Ragavan compares Indo-US relations on IP policy to an abusive domestic relationship. Most tellingly, she points out the unending, cyclic nature of US pressure to bring India in line with its own policy goals:

“If there is a cautionary note here, it is that reconciliation never ends the cycle of abuse. Assuredly, neither PhRMA nor the USTR will relent or retract from this pattern until India economically harms itself by instituting TRIPS and other measures leaving the Indian generic industry on a suicidal path. After all, abuse is a pattern of control that one party exercises over the other to force actions or inactions that cause some form of harm to the abused.”

She adds that the Modi government needs to realise the importance of the flexibility that Section 84 provides, especially at a time when America itself is beginning to have a conversation around the tension between patent monopolies and healthcare goals. She rounds up by warning that the actions of this government could end up negating past gains, such as the flexibilities negotiated in Doha and elsewhere.

Meanwhile, EPW has carried a stinging criticism of the assurances in an editorial this week. This piece frames the current controversy within the broader context of the Special 301 process, and the manner in which Big Pharma manufactures the Indian IP narrative to suit its own needs – a narrative legitimised by the USTR’s seal of approval. It also poignantly picks out examples of this hypocrisy in this year’s submissions to the USTR, such as the USIBC’s simultaneous condemnation of India’s patent regime and approval of the recent decisions in Roche v. Cipla and Merck v. Glenmark (both instances in which the [foreign] patentee won).

EPW ends with the question that seems to be on everyone’s minds:

“The unsaid message to the executive is that complying strictly with India’s patent laws, rejecting patent applications and awarding compulsory licences, is enthusiasm that the Government of India does not approve of. Will the Government of India tell us this is not so and that our rights to compulsory licences and access to medicine will not be bartered away, and that the alleged unwarranted assurances were not given, or if given, will not be implemented?”

The Government of India has said it ain’t so, but the jury is still out on how convincing it is.

Balaji Subramanian

Balaji is a third year student at NALSAR, Hyderabad. He is currently an editor of the Indian Journal of Intellectual Property Law. He is fascinated by technology law and IP law, and is an active member of NALSAR's Technology Law Forum. When he isn't doing law school things, he wanders the country looking for quizzes to participate in. He can be emailed at [email protected]

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