WTO in Pharma sector

rsumeet

Indian pharma relieved as WTO pact fails Friday, 29 August , 2003, 15:57
India's pharma industry breathed a sigh of relief on Friday as a United States backed drugs pact fell through at the eleventh hour during hectic World Trade Organisation (WTO) parleys in Geneva.

"The drugs pact clearly represented the clout of the US pharma lobby and would have ensured one way or the other that the poor paid more for generic medicines," said D.G. Shah, secretary general of the Indian Pharmaceutical Alliance (IPA).
World trade ministers had agreed in Doha, Qatar, in November 2001 that poorer states that are unable to manufacture medicines would be allowed to import cheap generic drugs.
While the Doha declaration set out to give access to medicines for all, it meant setting aside patent laws protecting huge multinational companies. "The Doha declaration set out to give the poor access to medicines. But this (US-backed) pact would have only gone against its spirit by fettering exports by laying down conditions," said P.S Khanna, memeber of the Organisation of Pharmaceutical Producers of India (OPPI).
"If the deal had gone through, it would have imposed subtle, but very tricky conditions on poor generic drug manufacturing countries effectively tying us up in knots. We are relieved that some two dozen WTO members rejected the proposal."
Although the 146 World Trade Organisation countries earlier agreed to pass on a proposed compromise for approval by the body's ruling general council, it failed on Friday to win overall backing.
Envoys had been tasked with agreeing to a solution to ensure that poor countries without a pharmaceutical industry can import cheaper generic copies of patented medicines for fighting killer diseases such as AIDS and malaria.
The US blocked a deal on cheap drugs drafted in December last year even though it was backed by all other WTO members. The United States is worried the proposal could open the way to generic producers in Brazil and India flooding the market with cheap medicines.
They fear that Indian and Brazilian drug makers could even start copying nonessential anti-impotence drugs like Viagra.
Under the new compromise proposal WTO states would pledge not to abuse the system and only waive patents to import generic medicines "in good faith" to protect public health and not for commercial or industrial objectives.
It also stressed the importance of ensuring that generic medicines are not diverted back to rich country markets, and that 23 developed countries would not use the solution to import generic drugs.
A group of middle-income developing countries is also called on to agree to opt out from using the solution unless faced with a national emergency.
http://sify.com/finance/fullstory.ph...237061&vsv=157

Pharmaceuticals
India has one of the most efficient pharmaceutical industries in the world.
Pharmaceutical firms grew mainly thanks to the absence of patent protection of medical drugs in the country. For instance, Indian companies are now producing their own AIDS drugs, which are available cheaply, compared to the original products from foreign countries.
But the imposition of the new WTO rules will begin to threaten India's achievements in the pharmaceutical field. The Indian Patents Act, introduced in 1970, boosted Indian pharma companies. The Act allowed them to develop and patent alternative processes for products discovered and patented elsewhere.
According to the Indian Drug Manufacturers' Association, self-sufficiency in Indian pharmaceutical sector is more than 70 per cent.
"Worldwide, India is a country of very low prices for high-quality medicines," points out the IDMA president Nishchal H Israni.
But now the rules of the game in the pharmaceutical industry will change as India has committed to toe the WTO line on product patents. Product patent rules and Exclusive Marketing Rights (EMR) under the WTO could effect a paradigm shift in India's pharma majors.
As per the EMR provision, a product for which original patent was granted prior to 1995, is not fit for an EMR in the country. This has forced nine leading domestic pharma companies to form the Indian Pharmaceutical Alliance that has demanded a more transparent WTO regime for EMR grants.
How will the WTO rules affect 500,000 employees working in roughly 20,000 pharma firms in the country?
Well, many expect a spate of mergers, acquisitions and alliances in the domestic pharmaceutical industry in the coming years.
http://www.rediff.com/money/2001/mar/30wto.htm

Challenges for Pharma Industry-Post 2005 WTO-TRIPS Compliance

Thursday, December 02, 2004 08:00 IST
V C Vivekanandan, NALSAR, University of Law, Hyderabad

This presentation deals with the changing scenario of Intellectual Property Laws in the back drop of the implementation of the Trade Related Intellectual Property Rights (TRIPS) under WTO- World Trade Organization. India a signatory to WTO has to implement the TRIPS which is a part of WTO. As part of TRIPS various laws on Intellectual Property Rights have to be enacted and implemented. The crucial law is that of the Patents Law which should not have any bar on product patents on any segment. The current Patents Law regime excludes product patents for drugs among many other things. In 2005 January the deadline set for developing nations, TRIPS requires compliance of allowing product patents for all segments.

This has a major impact on the Indian Pharma Industry which has grown to this stature in the absence of the product patent regime. The moot point is what will be the impact on the domestic industry on bringing in product patent regime. The presentation will throw light and discuss on the following issues:

The interpretation of WTO-TRIPS from the Indian Context The Impact of WTO-TRIPS on the Indian Pharma Industry The impact of WTO-TRIPS on the Health care system The Public Policy choices under the TRIPS regime How to respond to the challenges

This presentation to be made in power point presentation will deal the subject from the matrix of private international law vs. public international law and a SWOT analysis of the post 2005 scenario of WTO-TRIPS compliance. The presentation will focus on the Pharma perspective with detailed statistics and surveys of major perspectives on the pharma industry.
http://www.pharmabiz.com/article/det...9&sectionid=50

Changing trends in pharma markets: Impact of WTO policies in developing countries

Wednesday, May 07, 2003 08:00 IST
Arvind M B, C S Shastry, G K Kadikudi, Kole P L, Nagappa A N

The World Trade Organization (WTO) established in the last millennium has a philanthropic objective of achieving a single world market and economy. It views a world with no trade barriers of social, political, cultural and geographical nature. It wants a vibrant economy to play in the whole of the world. The advents in communication technology, co-operations in science are in fact giving a futuristic vision of one world and one economy. But practically there is a vertical division of the world in to developed and developing countries. The rise of patent regimen, General agreement on tax and tariff (GATT) and Trade related intellectual property rights (TRIPS) has given suspicion in the minds of the developing countries policy makers that WTO is used a device to maintain the economic scale of development always remains ahead of developing countries than developed countries.

The poor infrastructure, fragile economy, unemployment and poverty are in fact holding back development of economy in developing countries. Pharmaceuticals are health inputs and are not to be treated par with consumables.

World health organization (WHO) essential drug policy clearly aims at providing a health for all and accessibility of primary health care and medicine to all the human beings of the world, irrespective of color, creed and economic status. It is continuously impressing upon governments of developed and developing countries to make prizes of the drugs such that for want of money no one get deprived of medicines and suffers morbidity and mortality due to diseases.

Accordingly many governments have their own regional drug laws and infrastructure to make available of the essential drugs to the needy people. Among developed countries, essential drug policy of Australia is ideal. In Australia, the drugs listed as essential are reimbursable by the patients.

Among developing countries the Bangladesh, health policy is acclaimed as a model essential drug policy for developing countries. It is of very great importance to acknowledge the contributions of Sukhdev Lal Hathi, who framed an excellent report after through study of the dynamics of the Indian society economy and its requirements. Some silent features of the essential drug policy of Bangladesh include;
• No propriety formulations in the market.
• Drugs are to be manufactured locally depending on requirement of the local needs.
This has worked wonders for economically starved Bangladesh to provide an efficient health care system.

The beginning of major drug policies in India took place with the establishment of Hathi Committee to look into price trends, competitiveness and feasibility of making Indian drug units to become self-sufficient. There were two major concerns that were on the cards. First, India was dependent largely on western countries for its supply of medicines. The growing monopoly of MNCs in Pharmaceutical Industry was the issue of concern. Second, though the Indian drug prices were comparatively quite low internationally, the MNCs tried to produce much of the inessential drugs and kept the prices of essential drugs high when compared to the purchasing power of the Indian masses.

Based on the Hathi Committee's recommendations, the profiteering attitude, which neglected the welfare of the Indian people, was tackled with the establishment of first Drug Price Control Orders of 1978 and 1979. For the first time, comprehensive price control was introduced in the drug industry (though few measures had been in force since 1970).
The new DPCO then grouped the drugs in four categories:
Category - I (Life saving)
Category - II (essential)
Category - III (less essential)
Category - IV (non essential/simple remedies)

Among these the first three categories were price controlled with mark up (profits allowed) of 40%, 55% and 100%, respectively. In all 347 drugs (about 90%) came under this price control categories. The philosophy behind the graded system was to make essential drugs cheaper. This approach of control on the price of essential drugs resulted in the shift in production pattern and this made the availability of essential medicines difficult than before, as can be seen from Table 1.

Table 1: Drug Production in Response to Price Policy (in percentages)

DPCO Category 1978 1979 1980
I Life saving 4.5 4.2 3.6
II Essential 16.7 14.8 13.2
III Marginal 67.1 67 68.6
IV Decontrolled 11.7 13.2 14.6

Source: T.L.Narayana (1982)

A second major reform at the manufacturing unit level took place around the same time with the liberalization process. The MNC's started to pressurize the government to bring down the number of drugs under DPCO. Government decontrolled some of the drugs from the purview of DPCO, reducing them to 166 only. But this was not free from a hike in price of few decontrolled drugs. Further, the price difference between the MNCs and indigenous firms became very significant.

Further the outcome of DPCO 1982 has resulted in the increase in the number of nonessential dosage forms by the MNCs to keep the margin of profit high.

The liberalization policy continued with more and more drugs going out of control from DPCO. The drugs under DPCO decreased by 1995, as few as 73 and 39 drugs by 2002 remained under the purview of DPCO.

The outcome of dilution of DPCO was evidently the increase in prices of drugs in India particularly of decontrolled drugs. The average increase in price among 18 major drugs was observed to be 44.6% during 1993-1999.

It clearly reveals that the average change in this significance of Patent act 1970 which helped Indian Pharmaceutical Industries to come up with the generic version of the existing drugs.

Invariably, fixing the criteria for keeping or withdrawal from DPCO was the most difficult task. It was observed that every time the drugs were brought out of the DPCO, there was a hike in the price of medicines coming out of DPCO. This was mainly due to the criteria used by DPCO. The Drug Price Control Order mainly considers the total sale, monopoly and competition in the production and marketing of a particular drug. The concept of essentiality is absolutely misquoted in this context. Any drug, which has sales less than the prescribed amount, would qualify to automatically come out of the purview of DPCO. Many a time the price of drugs under DPCO has been less than that of the ceiling price fixed by DPCO/NPPA. The system of ceiling price is slowly becoming absolute due to market driven price. Thus the role of DPCO is effective only if the producer has monopoly prices over and above the ceiling prices. Thus two forces were acting simultaneously. While the prices of drugs going out of DPCO's control were to go up, the competition driven market has always succeeded to keep the prices of such drugs below that fixed by the DPCO/NPPA. Competition emerged due to the process patent. Furthermore, it is the function of NPPA to keep a watch on the prices of drugs and to fix the ceiling price for new drugs/dosage forms.

DPCO also was finding it increasingly difficult to fix the drug prices due to (a) increasing number of formulations (about 75,000) due to relaxation in the patenting system, and (b) time taken by the authorities to fix a ceiling price for the formulations and the bulk drug being very large, leading to lot of inconvenience in the production pattern of the required drugs. Further the need for DPCO's intervention to control will arise only when the prices are driven by the monopoly and not by the competitive system, which grew due to the process patent system that made India to develop in to technologically advanced country in the field of Bulk drugs. This makes it necessary to have a close look at the Patent system in India.

In such a scenario the WTO and its policies are going to change the scene of market topsy-turvy. The WTO emphasizes on product patent and does not recognize process patent. There may be a very convincing argument for the above rigidity in the policy its impact on a developing country and its intellectual development will be halted for just want of sophisticated technologies, which are too expensive to offer by an innovator from a developing country.

The developing countries, especially India is rich in its human resources. The human resources of India are rated best and are hired by leading economies of the world. This is also a true for the pharmaceutical market. The scientist of India were able to develop a technology to manufacture an anti-AIDS drug, which was so expensive that many developing countries of Asia and Africa would have suffered very dearly for want of medicine and lack of money. It was estimated that AIDS cocktail estimated at 10,000 US$ was brought down to 500 US$ per annum per patient and made the therapy affordable by the patients of the developing countries. The developing countries being poor in infrastructure are also lacking certain important features of the developed countries like health insurance. In an environment of economic insecurity, how the patients could be helped should be the concern of the WTO instead of encouraging solely the intellectual proprietary and economies and rights of an inventor, after all inventor also part and parcel of the universe and might have taken help from so many people in order to develop the technology.
http://www.pharmabiz.com/article/det...9&sectionid=46