Leaked trade deal sparks concerns over access to generic medicines

A leaked draft of a new free trade deal between India and the European Free Trade Association spurred fears that India had agreed to impose more stringent intellectual property laws on its pharmaceutical industry. But the Indian government recently clarified it had rejected those IP demands, which would limit the capacity of its vast generic market to produce cheap drugs. The trade deal with the four-nation bloc — consisting of Iceland, Liechtenstein, Norway, and Switzerland — is expected to be finalized in the next few days. But clauses in the leaked draft agreement relating to patents on India’s pharmaceutical products prompted criticism from activists and civil society groups over provisions that would limit the use of data from existing drugs for a period of at least six years, delaying the production of lifesaving drugs and pushing up prices globally. The leak was the latest in a series of trade agreement proposals which go a step beyond the standard international obligations under the World Trade Organization’s 1995 Trade-Related Aspects of Intellectual Property, or TRIPS, agreement, to which India is a signatory. So-called TRIPS-plus provisions have increasingly cropped up in bilateral trade negotiations in recent years. As part of these provisions, pharmaceutical companies try to lengthen IP protections and secure the industry additional profit. The original TRIPS agreement mandates that data — for example, from clinical trials — should be protected, but does not demand data exclusivity. This means that currently, India’s drug regulatory authority can use data from preexisting pharmaceutical formulations to produce generic drugs quickly and inexpensively. This has enabled India’s generic medicine industry to flourish, earning it the nickname the “pharmacy of the world.” India is the world’s largest supplier of low-cost generic medicines, with an estimated 50% of Africa’s generic drugs procured from India — meaning that any dent to the industry domestically has huge global repercussions. Access to affordable medicines If India concedes to stricter IP provisions, it would need to align domestic patent laws to those provisions, meaning that generic manufacturers would have to either wait for the data exclusivity period to end, or run their own clinical trials — increasing costs and delaying access to medicines in countries where original, patented versions are unaffordable. “If accepted, these IP provisions will have drastic consequences on access to medicines and the health of patients in India and beyond,” warned Dr. Farhat Mantoo, executive director of Médecins Sans Frontières South Asia, in a press release following the emergence of the leaked draft. “Millions of lives depend on India putting people’s health first and being able to continue supplying generic medicines globally,” she said. “You're talking about big bits of public policy here that really affect people. But because it's happening in a trade negotiation behind closed doors, people aren't really aware of it until it's too late.” --— Nick Dearden, director, Global Justice Now The work conducted by MSF is heavily dependent on India’s generic drug industry, with the organization estimating that around 95% of its HIV drugs and 90% of hepatitis C antivirals are procured from Indian generic manufacturers. In a press briefing co-hosted by MSF last week, Leena Menghaney, a lawyer specializing in IP rights and the South Asia head of the MSF Access Campaign, warned that the proposed provisions would also have a “massive chilling effect” on voluntary licensing — when patent-holding pharmaceutical companies voluntarily grant licenses. In the scenario of tighter IP laws in India, “There is no reason why big pharma should be providing voluntary licenses to Indian companies anymore, because they have a complete monopoly and control over the Indian market,” she said. Patents for innovation or profit? Proponents of tighter IP rights say that they are necessary to protect investments made by pharmaceutical companies on research and development, incentivizing innovation in the industry. “Data exclusivity provisions make sure other companies are not able to rely on this original data to submit a copy of this medicine for approval without permission, within a limited period of time,” the International Federation of Pharmaceutical Manufacturers and Traders, an association representing leading innovative pharmaceutical companies across the world, told Devex via email. “Such measures are critical in making sure that the right incentives are in place for companies to invest in the development of new medicines and vaccines.” But many experts are skeptical that increased IP rights will lead to greater investment in research and development. “I just don't buy that ever-tighter IP produces more innovation,” said Nick Dearden, director of the social justice organization Global Justice Now. In contrast, he said, research actually shows a decrease in innovation within pharmaceutical companies since the widespread adoption of IP laws in the mid-1990s. “I would argue, far from making them more innovative, it's done exactly the opposite. It's made them more addicted to the sky-high profits that they can get through maxing out IP,” he said. Research by Oxfam found that the introduction of similar TRIPS-plus provisions in Jordan, a term of its WTO accession package, not only failed to increase foreign investment or domestic research and development, but also resulted in a drastic increase in the price of medicines. A sticking point in negotiations India — along with the countries it exports generic medicines to — represents a huge, untapped market for the industry, making it a particular target for pharmaceutical giants in favor of TRIPS-plus provisions, said Dearden. “India is one of the few countries that has developed a really successful generic drug industry,” he said. Switzerland, which is home to a number of pharmaceutical giants, was behind the push for data exclusivity in the India-EFTA trade negotiations, according to Menghaney. But similar provisions have also appeared in negotiations with other trade partners, with India in the process of finalizing several trade agreements — including with the United Kingdom and the European Union — in the lead-up to national elections later this year. A leak of a draft free trade deal with the U.K. in 2022 included similar TRIPS-plus provisions that would have required India to amend its IP laws as part of the agreement, prompting backlash in both countries. Amid reports that the trade deal was nearing conclusion, academics and civil society groups signed an open letter last October calling on U.K. Prime Minister Rishi Sunak to ensure that the agreement did not compromise access to affordable medicines. “We were deeply concerned that some of the things that the U.K. was arguing for would make it harder for India to begin producing generics in a timely manner,” said Dearden, whose organization, Global Justice Now, was a signatory to the letter. In particular, laws in India that allow any third-party individual or group to challenge the “evergreening” of patents, known as a pre-grant opposition, would have been at risk under the terms of the trade agreement. Pre-grant oppositions allow Indian generic manufacturers to begin production as soon as the original patent expires, ready for export to countries with stricter IP laws. This not only benefits countries in the global south who cannot afford the original patented medicines, but has also been “a great thing for the NHS,” said Dearden, referring to the U.K.’s National Health Service. “It’s saved us a huge amount of money, year on year, over the last five years.” The NHS procures a quarter of its medicines from Indian generic manufacturers. “Anything which prevents India being able to [produce generics], delays it in any way whatsoever, is just going to add costs to the NHS,” he said. A push to transform India from imitator to innovator? The repeated appearance of TRIPS-plus provisions in leaked trade draft agreements suggests there are factions within India’s negotiating team who support the changes, some experts said. A senior government official present at the EFTA-India negotiations told Indian news outlet The Print that while the new TRIPS-plus provisions were opposed by the Health Ministry and the Department of Pharmaceuticals, they were supported by the Department of Promotion of Industry and Internal Trade. Representatives from all three departments were contacted by Devex, but had not responded to requests for comment at the time of publishing. As companies in India increasingly engage in research and development, or R&D, activities, there has been “a significant shift in the sector's ambitions towards moving beyond a volume provider to a value creator,” Anil Matai told Devex. Matai is the director-general of the Organisation of Pharmaceutical Producers of India, which represents research-based global pharmaceutical companies in India. India’s domestic R&D market is largely in favor of tighter IP regulations, which it argues would allow it to protect investments, theoretically boosting innovation. “We envision this shift positioning India as a hub not only for generic drug manufacturing but also as a center for pioneering research and the development of novel pharmaceutical solutions,” Matai said. A period of data exclusivity “will particularly help in spurring innovation in AYUSH [traditional medicines], Phyto-products [herbal medicines] that are not permitted patent protection under the Patents Act,” Matai said. Under Prime Minister Narenda Modi, India’s traditional medicine industry has seen huge growth, with exports totalling over $620 million between 2022 and 2023. India’s research and development industry is still in its infancy, however, according to Biswajit Dhar, an Indian economist and former member of the official Indian delegation at WTO Ministerial Conferences. “If you look at our total research and development spend as a percentage of GDP, it’s still well below 1%,” he said. He believes that the push for Indian industry to move from imitation to innovation stems more from India’s ambitions to portray itself as a major global power on the world stage. “There is a very strong lobby in the government which tries to project India as a growing technological power,” he said. “And it argues that if India is to become even bigger in terms of technology, if India wants to get stronger, then a strong patent system is the way forward.” A silencing of critical voices In this environment, the previously vocal generic medicine industry has become less outspoken, Dhar said. “I think the generics industry feels it is prudent to just keep quiet.” The Indian Pharmaceutical Alliance, which represents major pharmaceutical companies in India, was notably silent in response to the leaked draft. Spokespersons at the organization did not respond to requests for comment on this article. With Indian companies increasingly collaborating with international pharmaceutical giants, particularly since the COVID-19 pandemic, Dhar believes that generic manufacturers have “accepted their role as a junior partner of the big pharmaceutical companies, global big pharma, and they would like to share the spoils in the Indian market.” Critical voices from civil society are also quieter than in the past, as discussions increasingly take place within the forum of bilateral trade talks. “You're talking about big bits of public policy here that really affect people,” said Dearden. “But because it's happening in a trade negotiation behind closed doors, people aren't really aware of it until it's too late.” For now, leaks of ongoing negotiations such as the recent one allow patients and citizen groups the space to voice concerns before agreements are finalized — as well as demonstrating that there are still many who are against the push for more stringent intellectual property laws.