In an exclusive analysis for Express Pharma, Professor Brook K Baker, Northeastern U School of Law, and senior policy analyst, Health GAP rebuts 10 principal US 301 accusations and urges that the sooner India clarifies its anti-monopoly stance, the more secure the right to health will be
The Office of the US Trade Representative continues to excoriate India’s pro-access IP policies and proposes multiple ‘solutions’ that will only benefit transnational monopoly profits, especially those of the bloated US pharmaceutical industry. Although the 2015 Special 301 Watch List Report politely drops India from the USTR’s Out-of-Cycle review list, the Report details in minute detail the pro-pharma, pro-IP-monopoly reforms the US seeks to coerce out of the Modi government.
Readers often think IP is beyond their understanding, but when framed in a context that rebuts strengthened monopoly-protection and narrow US interests, the stakes for India should be clear. The table below sets forth principal US 301 accusations against India in the 2015 Special 301 Report and a rebuttal of such claims. (See table: Rebuttal to US 301 accusations against India)
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Rebuttal to US 301 accusations against India
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Accusations
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Rebuttals
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| India along with China are the major sources of counterfeit pharmaceutical shipped to the US and elsewhere (pp.14, 51). | The technical meaning of a counterfeit is a product that is trademark infringing. Such infringement, especially with respect to medicines, is usually motivated by excessive pricing by monopoly rightholders. The actual larger concern globally is unsafe, substandard, and unregistered medicines – a problem that is not significantly IP related. |
| India is unfairly and unlawfully incentivising domestic innovation and discriminating against US and other foreign companies by means of local content/ investment/ production requirements, domestic-preference procurement, and other means (pp. 21-23). It also imposes unfair tariffs on medicines, pharmaceutical inputs, and medical devices (p. 24). “The United States remains concerned about actions and policies in India that appear to favor local manufacturing or Indian IPR owners,” citing the Drug Price Control Order and the provision in Section 84 of the Patents Act allowing compulsory licenses in some circumstances if a patented product is not manufactured in India. | The WTO TRIPS Agreement recognises the interest of developing countries to develop their technological capacities and to promote technology transfer. Encouraging domestic production via government procurement and other means, instead of allowing unbridled exploitation by foreign IP owners, is fully TRIPS-complaint and in India’s national interest. Likewise, instead of allowing unbridled monopoly pricing, governments retain sovereign rights, like those retained by the US Department of Defense and Veterans Affairs Department, to regulate prices. Similarly, there is an emerging expert consensus that governments’ compulsory licensing strategies can promote local production instead of domination by monopoly-priced imports. |
| “[T]he United States continues to have serious concerns about the innovation climate for biopharmaceutical and other sectors, such as agricultural chemical and green technologies. Innovators in these sectors face serious challenges in securing and enforcing patents in India.” (p. 48) |
The vast majority of patents granted in India are held by foreign patent holders, including those from the US. India has invested considerable resources in upgrading and modernising its patent offices, something that the US acknowledges, yet the US still whines about its favored industries. |
| “The United States continues to have concerns that Section 3(d) of India’s Patents Act, as interpreted, may have the effect of limiting the patentability of potentially beneficial innovations”, including those enjoying patent protection in multiple other jurisdictions (p. 49) | India’s Section 3(d) lawfully restricts patenting on new uses of medicines and new forms without evidence of significant therapeutic impact. It deters filing of weak, secondary patents that merely serve to lengthen monopoly protections and supra-competitive profits off sales to elites. If anything, India should enforce Section 3(d) even more vigorously as many secondary patents are being improvidently granted. |
| “[T]he United States urges India to improve and streamline its patent opposition procedures (p. 49). | Opposition procedures are directly referenced as permissible in the WTO TRIPS Agreement and the knowledgeable inputs of generic companies and other opposition filers assist patent examiners in making informed, evidence – based decisions on the merits of patent applications. Oppositions have succeeded in weeding out dozens of unworthy pharma patent applications over the past 10 years. |
| “[T]he United States continues to monitor India’s application of its compulsory licensing law” both with respect to pharmaceuticals and green technologies (pp. 50, 27). | India has granted exactly one compulsory license thus far, fully in compliance with national law, the TRIPS Agreement, and most especially the Doha Declaration on the TRIPS Agreement and Public Health. The US has quietly issued government use licenses on hundreds on patents in the US, but hypocritically states that it supports the Doha Declaration while challenging India’s judicious use of CLs. |
| “The United States also notes with concern the continuing challenges involved with the enforcement of patent rights in India, including challenges that some patent holders reportedly face in securing injunctions … .” (p. 50) |
The WTO TRIPS Agreement allows countries’ courts to offer remuneration (royalties) in lieu of injunctions in enforcement actions. Moreover, the US Supreme Court has sanctioned similar royalty damages in the famous eBay case. |
| When approving marketing approval applications from generic companies, “Indian state government authorities reportedly do not have a mechanism to confirm whether the item to be manufactured is under patent (p. 50). | Well, neither does Europe and both Europe’s and India’s denial of patent-registration linkage are fully lawful under TRIPS. Accordingly, generics facing weak or invalid patents can obtain marketing approval and the drug regulatory authority does not have to act as patent police. |
| “[T]he United States continues to urge India to provide an effective system for protecting against unfair commercial uses, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products.” (p. 50) |
Big Pharma has consistently sought data/ registration monopolies since it lost the battle for them in the negotiation of the TRIPS Agreement. The data exclusivity the US seeks, prevents the registration of generic equivalents by making the medicines regulatory authority blind to data previously submitted. Instead of being able to prove that a therapeutically equivalent generic should be expeditiously registered, the US data-monopoly proposal would require costly and unethical repetition of clinical trials to develop identical data to that already submitted. |
| The US is seeking enhanced enforcement measures including border enforcement (p. 51). | India’s border control measures are fully TRIPS compliant, and India should not be forced to invest scarce government resources for public enforcement of what are private rights. |
While continuing to press ameritless claims, based solely on the wish list of US IP industries, the USTR also gleefully praises some accommodationist signals from the Modi government. For example, the USTR Special 301 Report praises the establishment of a domestic IPR-focused working on India IP Policy and the access the US has both to this policy undertaking and to a separate IPR Working Group Process where the US can directly engage Indian policy makers on the US IPR goals (p. 45-46). The Report also directly references Prime Minister Modi’s statement in April recommending that India align its patents laws with international standards and encourages India expeditiously to undertake this initiative (p. 48). Finally, the Report favorably mentions what it considers to be positive development on the data exclusivity/ monopoly front (p. 50). This may be a cat-and-mouse game, but make no mistake who is the cat and who is the cat’s master. The US will continue to playfully bat India around with its paws, seeking its acquiescence to the monopoly intentions of Big Pharma and other IP-based transnationals. At the same time, the cat is sizing up India to eliminate it as a competitor for the pleasure and profits of the US’s IP behemoths.
The Special 301 Report is an annual swat at India and other US trading partners signaling the strengths of IP monopolies and the US’s obedience to their demands. India’s interests, and the interests of people in India and elsewhere to more affordable access to medicines, agricultural inputs, and green technologies, are not served by capitulating to monopoly interests. The sooner India clarifies its anti-monopoly stance, the more secure the right to health will be.
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