India's cheap drugs under threat

India's cheap drugs under threat By Martin Khor

GENEVA - India is famous for the Taj Mahal, its religious ceremonies, Bollywood films and in recent years one of the world's highest economic growth rates in recent years. Less famously but no less important, the country has had a positive global impact through its supply of vast quantities of low-cost, good-quality generic medicines, which have saved or prolonged millions of lives.

A decade ago, Indian pharmaceutical company Cipla produced generic HIV/AIDS drugs that could treat a patient for US$300 a year, against the branded product's cost of $10,000 per patient a year. Today the Indian generic version is even cheaper, below $80. This has enabled millions more AIDS patients to be treated, since

India supplies 70% of the HIV/AIDS drugs obtained by the United Nations Childrens Fund (UNICEF), the Global Fund and the William J Clinton Foundation for developing countries.

A further 75-80% of medicines (not only for AIDS) distributed by the International Dispensary Association to developing countries come from India. No wonder India has been termed the pharmacy of the developing world.

In January 2012, the Indian Drug Manufacturers' Association (IDMA), comprising 700 drug-manufacturing companies, celebrated its 50th anniversary by toasting the industry's high growth, wide range of medicines, and its contribution to safe, affordable drugs.

Many factors may hinder the continuation of its members' role as supplier of medicines to developing countries.

A leading factor in the industry's success was the government's decision in 1970 to exclude pharmaceutical drugs from product patents. This paved the way for local companies to produce generic versions of expensive foreign drugs, and within a few decades they had taken over 80% of the domestic market while also supplying cheap medicines abroad.

The situation took a negative turn when the intellectual property agreement, known as TRIPS, was established in 1995 together with the World Trade Organization, which disallowed countries from excluding medicines from patentability.

However, TRIPS allowed individual countries to determine the criteria for an invention that can be granted a patent. Furthermore, TRIPS gave governments the ability to grant a compulsory licence to local companies to produce the patented products, if their requests to patent owners for a voluntary licence did not succeed. To implement its TRIPS obligations, India passed changes to its patent law in 2005 so that drugs could now be patented. However, the new law also contained flexibilities such as strict criteria for patentability (trivial changes to a patent-expired product would not qualify for a new patent); allowance for public opposition to a patent application before a decision is made; and compulsory licencing.

See the article here:
India's cheap drugs under threat