Developed countries ride piggy back on WHO to thwart Indian drug export

In 2008, more than a dozen shipments carrying off-patent generic drug from India were detained by customs authorities in European Union [EU] countries on grounds of alleged infringement of EU intellectual property. The consignments were destined for Brazil transiting through the European ports and airports.

India together with Brazil had taken the issue to WTO’s [World Trade Organization] disputes settlement body in May 2010 against the EU and Netherlands, where the shipments were detained. Other countries viz. Canada, Ecuador, China, Japan and Turkey had joined the dispute.

India argued that the seizures violated the multilateral Trade Related Intellectual Property Rights [TRIPS] agreement of the WTO, as the medicines were off-patent both in India as well as the country [read Brazil] to which these were being exported.

In 2011, EU reached an understanding with India under which it would desist from such action [seizure of Indian drug consignments in transit to other countries] for alleged IPR violation. For a couple of years, the detention stopped. But, the fear looms large.

The apprehension this time originates from a WHO [World Health Organization] discussion document on ‘medicines in transit’ slated for discussion during a meeting from November 28 to December 1 in Geneva. It outlines the criteria that could justify a country’s customs authorities intervening to check medicines passing through their ports ‘on grounds of public health concerns’. Could this be an attempt to legitimize such practices?

The document details circumstances in which customs officials would be justified in “intervening” in medical products in transit on grounds that they are substandard, falsified and unregistered/unlicensed or a genuine threat to public health or environment. Saying such products have the potential to endanger the health of patients, it argues that “part of the function of national customs authorities is to protect the health and safety of their populations”.

This is contemplation to its absurd limits. Here is consignment whose destination is a country other than EU. It is merely transiting through the latter on way to the former. In fact, the customs documentation clearly mentions that “the medicines are meant for a non-EU market”. Hence, EU authorities have no valid reason to withhold it. What about possibility of these medicines affecting their citizens?

This could arise only if these were to be diverted to the market of the country in which it was ‘in transit’. Here, we need to consider two scenario. One, the three parties viz. exporter, original importing party and party in the transit country take a conscious decision based on tripartite consultations and execute diversion after intimating respective governments and taking their prior authorization. So, there is no question of any adverse effect on health.

Second, there could be diversion without the knowledge of government in transit country. This is a patently illegal activity and in such cases, sternest punishment is warranted as per applicable laws of the land. In the instant case, this is ruled out.

The consignments are legitimate with origination source/exporter, destination/importer and all other particulars clearly mentioned on the boxes/containers. There is not even an iota of possibility about their alleged diversion to a place other than the mentioned destination. The stuff does not even leave the ship – forget finding its way inside the territory of the country where it stops in transit.

If, EU customs come to know of any concerns regarding the quality of medicines, all that they need to do is to alert the destination country about it. Beyond alerting and giving information, the transit country has no jurisdiction to intervene.

The criteria mooted by WHO is also out of sync with the principle of freedom of transit, a fundamental component of GATT [generalized agreement on trade and tariff], which has been reiterated under recently concluded Trade Facilitation Agreement [TFA]. It mandates that the transit country will ensure least trade restrictive means to address its concerns and won’t impose its standards of quality or conformity assessment, on goods in transit.

Attempts to thwart Indian exports have also manifested in EU banning over 700 generic formulations [2015] where equivalence with the original drug [a requirement for approval by the national regulator] was established on the basis of tests conducted at GVK Biosciences laboratory. This was based on minor discrepancies in the lab test even as there was no major issue with regard to quality or complaints from consumers. This was not an isolated incident.

In the last couple of years, there have been umpteen instances of EU regulators besides US Food and Drug Administration [FDA] issuing warnings and import alert leading to ban on export of generic medicines from India on grounds of deviation from quality testing guidelines and prescribed procedures at the manufacturing plants in India in some cases, even at sites located in USA.

In short, we see brazen and indiscriminate attempts by developed countries to restrict/disallow exports from India under one pretext or the other viz. alleged infringement of intellectual property, risk to health of persons, exporter not following testing guidelines/procedures at their manufacturing facilities etc. Ironically, none of these arguments are sustainable on merits.

The actions of EU and US governments are prompted by multinational national corporations [MNCs] in pharma segment who are desperate to protect their market share from cheaper/generic medicines coming from India on their domestic turf as also in markets of other developing countries in Latin America. Their worries are increasing by the day as they face expiry of patents worth billions of dollars in next couple of years leading to even greater threat from generics.

The Indian government should proactively engage at WTO/WHO and other multilateral and bilateral fora to exercise its legitimate rights to ensure that our exports are not hindered by such non-tariff barriers [NTB]. At the same time, it needs to better its own IP protection environment for enabling launch of latest medicine to meet diverse needs of our patients.

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