Picking your pharma right: Why alienate US with stent regulations or compulsory licensing?
Financial Express , May 16, 2018
While the two countries have traditionally sparred on the intellectual property rights (IPR) regime in the pharmaceuticals sector, India must learn the right lessons from the US President Donald Trump’s warnings over the weekend. The Trump regime is aggressively redrawing the global trade map with “America first” as its compass—it has just labelled Indian food subsidies trade-distorting at the WTO. But, while continuing to fight the US on important matters, India needs to pick its battles and, in other cases, forge alliances with the US since the areas of commonality are greater than the areas of differences.
Given just how few Indians were actually affected, did the government really need to put price caps on stents—an industry report shows that the stent-price capping has not had a significant impact in terms of costs of angioplasties falling or even in terms of number of angioplasties taking place. Indeed, when Trump said the caps delay “the availability of new cures to patients living in countries implementing these policies”, he was correct, since US stent major Abbott has already withdrawn a “resorbable” and drug-eluting stent from the Indian market; indeed, this has sent unfortunate signals about India’s regulatory approach.
Similarly, unmindful of the number of people—a few thousand—affected by Bayer’s liver and kidney cancer drug Nexavar, India issued a compulsory license in 2012 which essentially destroyed Bayer’s monopoly, and ensured India came in for a lot of criticism from the US; a far simpler solution would have been to negotiate special prices with Bayer. Not only did India realise its mistake and give the US an informal assurance that it would not use compulsory licensing again, it did not act when, in 2015, a parliamentary committee recommended that 509 drug formulations be brought under compulsory licensing.
Also, while it is true that the US and India are sparring on Section 3(d) of the Indian Patents Act, that prevents the US—style ever-greening of patents, India is on strong grounds in that its patent law is WTO-compatible. But, while India and the US disagree on pharmaceuticals IP laws when Indian firms are also creating their own IP, strong laws benefit India as well.
A FICCI paper by the Thought and Arbitrage Research Institute a few years ago put the loss in seven major industries—and this did not include pharma—due to counterfeiting and trademark/patent violations at Rs. 72,000 crore in FY12, and Rs. 100,000 crore in FY14. Indeed, this is why the industry ministry had put out a discussion paper on a modern IP law which includes having special IPR courts—little came of this, though.
Similarly, though not related to pharma, had the government not adopted an anti-Monsanto stand—especially since this helps Indian farmers— this would have helped assuage the US’ feelings.