Say Goodbye to Affordable Medicines, If Obama HasHis Way


In all likelihood, when Obama meets Modi in New Delhi, he will again try to put pressure on India to ease up on its patent laws so that Big Pharma (giant US and European pharma companies) can sell their exorbitantly priced drugs in India, under protection of patents. The US government, a staunch flag bearer of the pharma industry, has been spewing venom against India’s patent law for long. India has been on the ‘Priority Watch List’ of the USTR (US Trade Representative) since 1979. Their unhappiness has increased in recent years over several patent related issues. In its 2013 ‘Special 301’ report, the USTR had passed particularly adverse comments on two issues – the denial of a patent to the Swiss MNC, Novartis, for its anti leukemia drug (Glivec), and the grant of a compulsory license to an Indian generic company, NATCO, for Bayer’s anti-cancer drug (Nexavar).

The US government and its pharmaceutical industry have consistently identified several areas in India’s patent laws and administrative procedures as being ‘contrary to American interests’. These include the high standards of patentability incorporated in the Indian Act – including the much reviled Section 3(d) that bars trivial changes in existing medicines from receiving patent protection. Under attack from the USTR have been ‘inadequate’ enforcement of intellectual property laws, ‘liberal’ compulsory licensing provisions, and the lack of legislation to protect test data.

While the US administration has continued to ratchet up pressures on India to change its laws and procedures on Intellectual Property protection, there has also been a continuous change in the discourse regarding IP protection in India. The incorporation of health safeguards in the Indian Act in 2005, was itself rather fortuitous – the product of the UPA government’s dependence on the Left parties at that time. Thus, in a manner, India’s relatively ‘progressive’ patent regime, since its inception, has been out of sync with the consensus among India’s two largest political formations – led by the Congress and the BJP respectively – to aggressively push for neo-liberal reforms. Thus, in nine years, only one Compulsory license has been issued to break a patent monopoly. Even countries such as Zambia and Zimbabwe have done better! While some of the higher court judgments have been positive and have upheld the basic tenets of India’s Patent Act, there is a disquieting trend today of courts granting ex-parte injunctions against generic manufacturers in cases involving alleged IP infringement. This has been accompanied by a continuing trend of inviting US and EU patent office representatives to train Indian patent examiners and judicial officers. Many patents are being granted in India, that shouldn’t have passed muster if the Indian Act was correctly interpreted by patent examiners.

The Narendra Modi led NDA government has decisively abandoned the fig leaf of adherence to public health goals, which the UPA government had nominally retained. There have been several recent examples of the government bending backwards to curry favour with the politically powerful US pharmaceutical industry. On September 22, the ministry of chemicals issued an internal memo cancelling an earlier order (issued on May 29) by the National Pharmaceutical Pricing Authority (NPPA) that placed a ceiling on the prices of several drugs – thus curbing the rampant profiteering by drug companies, including several US based companies. This directly addresses a long-standing complaint by the US regarding drug price controls being harmful to the commercial interests of its pharmaceutical companies.

Further evidence of India’s intent to genuflect before US interests is provided by the joint communiqué at the end of Prime Minister Modi’s visit to the US, The communique announced the establishment of “an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the Trade Policy Forum”. The US has always used joint working groups to pressure countries to adopt positions that conform to US interests, and clearly the IP working group will be used for the same purpose. By agreeing to its formation the Indian government has clearly indicated that it is ready to compromise national interests in the face of US pressure.

Interestingly, on 14th October 2014, the US Trade Representative (USTR) began an ‘out-of-cycle review (OCR)’ of India’s patent laws. In early January 2015 the USTR closed the Out-of-Cycle Review and indicated that it had noted the steps taken by India on the IP front. But the USTR also ‘promised’ a thorough review of the environment in India for patent protection and enforcement, including progress made on “recent IP-related engagement through the agreed work plan”, as part of the 2015 Special 301 Review. So India has received a small pat on the back for being a pliant student but also the threat that it will need to continue to behave!

President Barack Obama is welcome to India as a representative of the people of the United States. Unfortunately he comes to India more as a representative of US business interests, including, importantly, interests of its powerful pharmaceutical industry. He represents interests that want to close down the indigenous pharmaceutical industry in India. It will be a sad day if the Indian generic industry ceases to be the lifeline for poor patients in three continents, who look towards India with hope for medicines that are cheap and effective. This is why, popular movements in India and across the word, will not be welcoming of President Obama’s visit to India.