Border push in EU FTA to hit pharma exports

In the quid pro quo of the free trade agreement (FTA) currently being negotiated with the European Union (EU), India could end up giving in to a provision which could hamper its exports of pharmaceuticals.

The EU, according to FTA watchers, is pushing for inclusion of border measures, which if agreed upon, will allow companies to lodge complaints with Indian customs authorities to seize or destroy consignments of generic pharma products which they believe violate trademark or patents.

These measures can also apply to goods which are in transit via India’s ports or airports.

The export revenue of the Indian pharma industry in 2009-10 was about Rs42,092 crore and has grown by 20% in 2010-11, according to industry data.

This border measure provision is frighteningly similar to the measures which EU ports lashed out on Indian pharma exports during October 2008-09, when over 17 consignments of legitimate Indian generics were seized by customs officials in Amsterdam and Paris on allegations of patent infringements by MNCs.

These consignments included drugs for AIDS, Alzheimer’s, blood pressure from Cipla, Aurobindo Pharma, Ind-Swift Labs, etc and were bound for markets in Columbia, Peru, Brazil, Venezuela. They were seized in transit by EU authorities.

“After these episodes, Indian authorities said they were working with their EU counterparts to iron out the creases concerning this issue. However, with this border measure provision in the FTA, it looks like the issue is coming back to haunt us in greater proportion,” said an intellectual property expert in New Delhi.

Leena Menghaney, project manager (India), campaign for access to essential medicines, Medecins Sans Frontieres (MSF), said that although the EU is promising to amend its customs regulations, it is simultaneously continuing to pursue measures in the FTA which can restrict the supply of medicines from India.

“India is one of the biggest suppliers of generic medicines to the developing world and if the country accepts the border measures, it can affect the distribution and availability of generics.”

About 50% of essential medicines which Unicef distributes in developing countries come from India, while 75-80% of medicines by International Dispensary Association are from India.

Menghaney said that MSF buys over 80% of its AIDS drugs and 25% of its requirement of antibiotics and drugs for malaria and TB from India.

However, according to DG Shah, secretary-general of the Indian Pharmaceutical Alliance (IPA) there is a high probability that India will not agree to such a demand as the EU seizures are still fresh in the mind.

“But what remains to be seen is how firm our negotiators can be while dealing with the EU FTA officials on this issue. Often, even though they say they will not give in, due to pressure, they end up compromising on certain crucial positions,” said the IP expert.