Fear in Indian pharma over EU's demand to seize drugs in transit

Indian pharmaceutical firms have faced trouble over IPR-related issues in European ports in the past as well

Many in the Indian pharmaceutical industry as well as civil society are worried over the demands raised by the European Union (EU), as India moves to finalise its free trade agreement (FTA) with the EU, sources said today.

In the FTA draft document, the EU has proposed that its customs authorities will have the right to seize medicines in transit in case it suspects infringement of intellectual property rights (IPR), sources said. Besides, the EU has also demanded that in situations where infringement is on a commercial scale, judicial authorities may order seizure of assets of the faulting company, including its bank accounts as a precautionary measure.

The domestic pharmaceutical industry, which is a major supplier of generic medicines to many African and other developing countries, is worried that the strategic clauses and provisions of the agreement may hijack India's stand and stricter laws on patents.

"India is the pharmacy of the world and it not only produces generics, but also supplies it to many other countries. Patients across the world will suffer if the EU manages to get through such provisions as suggested under the IP enforcement in the FTA draft document," says Medecins Sans Frontieres (MSF) campaign coordinator (India) Leena Menghaney. "All our efforts and India's stand so far related to patenting will go into waste if it agrees to the EU's conditions with respect to IPR in this FTA."

Indian pharmaceutical companies have faced trouble on IPR-related issues in European ports several times in the past as well. Consignments from major domestic drug makers were seized in the past in transit at European ports on grounds of alleged patent infringement. In 2008, there were 17 cases, where consignments containing medicines produced by some reputed Indian companies such as Dr Reddy's Labs and Aurobindo Pharma were confiscated in the Netherlands, Germany and France. These consignments were on their way to countries in Africa and Latin America that do not have the capability to manufacture life-saving medicines.

The seizures followed complaints by pharmaceutical giants, holding patents to the medicines in Europe, including Sanofi-Aventis, Novartis AG and Eli Lilly. Subsequently, India had also filed a complaint with the World Trade Organization arguing that the seizures amounted to violation of the international intellectual property agreement, TRIPS (trade-related aspects of intellectual property rights), and asked the EU for consultations.

The domestic industry is afraid that though issues were temporarily resolved then due to pressure from India, the EU is again trying to assert such norms through the FTA.

Commerce minister Anand Sharma is expected to meet EU trade commissioner Karel De Gucht on April 15 in Brussels to conclude talks on the agreement in a ministerial meeting. This meeting is crucial because its failure may jeopardise the agreement, as India will not be keen on negotiations if general elections are imminent.

According to reports, the FTA will also be on the agenda of Prime Minister Manmohan Singh, who is travelling to Berlin on April 10, and will hold talks with German Chancellor Angela Merkel. Germany is a key member of the EU.