India-US ties are under stress again, this time over trade and investment
DELHI: India-US ties are under stress again — this time over trade and
investment — according to the government. With calls in the US for
designating India a priority foreign country (PFC), the worst
downgrading of status by the US trade representative for inability to
protect IPRs, the government is accusing US authorities of intimidating
the Union health ministry over the issue of compulsory licences — which
allow local firms to manufacture patented drugs - and simultaneously
preventing other developing countries from acting against evergreening
of drug patents.
A PFC tag can allow the US to impose unilateral
sanctions against India for domestic laws which deny benefits to the US
under any trade agreement. Government sources here said there seemed to
be a two-fold agenda behind the "cacophony" emanating from the US.
"Pressure is being created on India's health ministry to not consider
drugs for compulsory licences and at the same time there is also a
deliberate attempt to use India to scare away other developing countries
like Indonesia and Brazil from introducing legislation to prevent
evergreening of drug patents, like section 3 (d) of Indian Patents Act
(IPA)," said a source.
US pharmaceutical companies like Pfizer
have demanded that India amend its patents law by doing away with
section 3(d) altogether. This section prevents patenting new forms of a
known substance in case it does not yield higher efficiency than the
earlier substance. It was under this provision that the Supreme Court
upheld a decision of India's Patent Office to deny a patent to Novartis
for its drug Glivec.
India has also been disturbed by the
proposed visit by US international trade commission ( USITC) to probe
the fallout of India's trade and investment policies on the US economy.
The government has already asked its officials to not entertain the
agency saying any dispute related to India's trade policies or patents
regime should be addressed at WTO. While the US interlocutors have
accused India of "continuous" use of compulsory licences (CL), which
allows local firms to manufacture patented drugs, India has described
this as a canard. The government has told the US authorities that
India's controller-general of patents issued only one CL for a
life-saving drug in March 2012, against a liver and kidney cancer
The government is trying to convince the Americans that
Indian Patents Act is not an administrative matter under its
jurisdiction but a quasi-legal process, with a separate and independent
appellate body to adjudicate such cases. The final court of appeal in
these cases is India's Supreme Court. "In fact, India's Patent Office
rejected in October 2013 a CL petition (for Bristol Myer's product
Desatinib, a blood cancer drug) showing that the system is capable of
exercising fair decisions," said an official.
say that despite the negative publicity over the business environment
and IPR regime in India, some 1,500 pharmaceutical compounds or
composition patents have been granted to nine firms between 1995 and
2012. Stung by the negative publicity, India has accused lobbyists for
IPR issues in the US such as Global Intellectual Property Center (GIPC)
of taking up patents only with regard to the pharmaceutical industry. It
has highlighted before the Obama administration that, according to a
study carried out by Ficci, losses caused by piracy in the US are
estimated in the range of up to $50 million, especially in Virginia,
California and Chicago city.