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Indian Pharma Lobby Seeks Removal of India from US Patent Violator List

The Indian Pharmaceutical Alliance (IPA), the lobby group for the domestic pharma industry, has filed a submission to the US Trade Representative (USTR) to remove India from its Priority Watch List (PWL), which includes countries that are alleged to have weak enforcement of patent laws. IPA has drawn the attention of USTR to the rapid progress made by India on a number of fronts that were cited by the US body while placing India on PWL in 2018. The 2018 report had asserted that ‘India has yet to take steps to address longstanding patent issues’, among which were the ‘long timelines for receiving patents’. IPA, in its February 7 submission, has pointed out that a number of steps have been taken by the Patent Office to augment manpower and streamline procedures, which have resulted in the transformation of the Patent Office. As a result, patent examination time has been brought down drastically. Patents pending examination have reduced to 127,881 as on December 31, 2018 from 204,177 as on March 31, 2017, IPA said. India now examines trademark applications in about one month and registrations are completed in a year or less, the industry body added.

“India now has one of the lowest examination times for trademark registration in the world and the indications are that patent examination backlog will be eliminated in about two years. Processing delays are no longer a concern and we hope that the USTR will take note of this,” DG Shah, Secretary General of IPA, told Moneycontrol. The USTR’s Special 301 report is a Congressionally-mandated annual report that has been issued every year beginning 1989. It identifies trade barriers to US companies and products in foreign shores due to the host country’s intellectual property laws, including trademarks, patents, copyright and trade secrets. The US government exerts pressure on countries on its watch list to address both emerging and continuing concerns and reviews the list annually based on public hearings. The countries that continue to fail were put on priority foreign country category that mandates the US government to impose unilateral trade sanctions.

Tariff fear

The Indian drug industry is worried about reports that the US government is considering withdrawal of zero tariffs on India, which may adversely impact the Indian drug industry on allegations of not honoring patents. India enjoys certain trade benefits filed under the Generalized System of Preferences (GSP), which is a preferential tariff system extended by developed nations to developing countries. India exported about USD 5 billion worth of pharmaceuticals. Now, if the US imposes fresh tariff, Indian drug makers may get impacted. Sun Pharmaceutical Industries, Aurobindo Pharma, Lupin and Dr Reddy’s Laboratories are the biggest exporters.

Evergreening issue

IPA said the prime concern of the US pharma industry, stemming from some provisions in India’s intellectual property (IP) laws, is Section 3(d), which prohibits grant of ‘evergreening’ patents, which is unwarranted. These are additional patents for a drug with no therapeutic benefit and serve only to increase term of the patent monopoly. Consequently, the availability of affordable generics is delayed and assures innovators of an extended period of pricing monopoly. India also does not provide a term for data (market) exclusivity for a new drug, quite apart from the monopoly conferred by a patent for it.

Compulsory licensing

Another major irritant between India and US is the compulsory licensing, wherein India can permit generic manufacturers to develop and market an affordable generic version when the price of the innovator drug is very high, is another major irritant to innovator companies. “The extraordinarily high prices of new drugs is a cause of considerable concern globally. Even developed countries in Europe such as the Netherlands and Switzerland are exploring the possibility of compulsory licensing as a means to control prices of new drugs,” Shah said DG Shah. IPA has strongly defended India’s patent law, which is Trade-Related Aspects of Intellectual Property Rights (TRIPS)-compliant and strikes a balance between the need to assure innovators of profits for their useful inventions and safeguarding public health. IPA represents 22 leading Indian pharmaceutical companies.

The body collectively accounts for over 85 percent of private sector investment into pharmaceutical R&D in India and 50 percent of the country’s pharmaceutical exports. In its submission it has urged USTR for a review of its 2019 Special 301 report. India along with 11 other countries are placed on PWL in the 2018 Special 301 report for alleged lack of a better environment for protection and enforcement of IP rights or patent. The USTR also expressed concern over lack of sufficient measurable improvements on patent protection. India was added to PWL by the US government, based on complaints of MNC drug makers, led by the Pharmaceutical Research and Manufacturers of America (PhRMA) — the US drug industry lobby over India’s poor enforcement of IP law. Beyond patents, US companies were also unhappy over price controls and other ‘protectionist measures’. – Money Control

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