The Inequals of Uruguay Srividhya Ragavan University of Oklahoma College of Law

The TRIPS Agreement Two important aspects marked the signing of the TRIPS agreement in 1992 –Victory over the proposal of a harmonized patent regime –Our compassion (?) in providing a protective transition period for developing and least developed nations.

The course of the TRIPS agreement has forced us to reiterate our dedication to the objectives (as opposed to the terms) of the agreement because of: –AIDS crisis –Insensitivity of TRIPS to local economic realities

The Tenth Anniversary of TRIPS The proposal to introduce Article 31bis Failure of the WTO negotiations in July End of the transition period for developing nations

The Problems of Transition Developing nations are scrambling to establish an unfamiliar system: –Transitioning from the EMR regime to a product patent regime has proved to be more expensive than what was originally conceived. Infrastructural issues Technical issues Social effects Economic effects

India as an example Population: One billion people The new (and the first) patented medication for treating Hepatitis C costs Rs.10,000 per patient per year Statistics reveal that about a 100 million (10% of the population) are capable of availing private health care at the above cost

Is trade so exclusive that 900 million people should be left out of the game –Especially considering that trickle down is not the most effective economic model Was such exclusion envisaged under TRIPS?

The presentation posits that the exclusion resulting from the transition contravenes the TRIPS objectives as well as the Constitutional guarantees of member nations

Article 7 of TRIPS Objectives The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, [to the mutual advantage of producers and users of technological knowledge and] in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

Posits that pre-TRIPS policy options embraced by countries like India should be revisited as options to jump start ailing economies into trade With this as background, the presentation looks at two aspects: –Historical development of India’s pharmaceutical industry –Why the development is a viable option falling with the TRIPS requirements

First Five Year Plan (1951) Income from industries: 6.6% of the gross national income Total labor force employed in industries: 8% Population below poverty levels: 50% Highest rate of epidemic diseases in the world –Mortality from epidemic diseases: 5.1% –Low life expectancy

Drugs Scenario Cost of medication was one of the highest in the world Central (federal) government imported drugs –Lack of a domestic pharmaceutical industry –Heavy reliance on foreign companies which formed 90% of India’s drug industry

Promoting a Domestic Pharmaceutical Industry Agreement with the UNICEF to locally manufacture antibiotics Setting up the Ayyangar Committee to establish an indigenous drug policy The Committee’s Objectives were to: –Ensure availability of food, chemical and pharmaceutical inventions to the poor –Aid the development of an indigenous pharmaceutical industry

Distinguishing Features of the Indian Patent Act, 1970 Process Patents Compulsory Licensing Local Working

Distinguishing Features of the Indian Patent Act, 1970 Process Patent for food, chemicals and pharmaceutical innovations –Objective: Balancing monopoly rights with access to medication –Limited to process patents –Unhindered monopoly period was restricted to three years –Promoted process innovations

Distinguishing Features of the Indian Patent Act, 1970 India’s system derived from the following examples: German patent law of 1877 –Within 30 years Germany’s process patent enabled a growth of chemical industries British Patent Amendment Act of 1919 incorporated a process patent regime to tackle food crisis at the end of WWI –Sargant Committee Recommendations French law of 1844 Belgian patent law of 1854 Denmark, Switzerland, Sweden, Spain and Japan did not allow product patents for food or medicine Italian Patent Act of 1957 prohibited patenting medicinal products Except for the US, most countries imposed restrictions on food and medicine patents

Compulsory Licensing Recommended compulsory licensing as an option to promote industrialization –1901 England introduced compulsory licensing following the Edward Fry Committee recommendation to tackle food shortage issues –After WWI several European countries introduced compulsory licensing

Local Working Requirement Compulsory License was plugged in with the local working requirement that necessitated patent holders to work the patent within the country

Pre- Grant Opposition Saves valuable time and resources expended in acquiring a patent –Novartis issue in India

Other Policies Drug Price Control Order, 1970 (DPCO) Foreign Exchange Regulation Act, 1973 (FERA)

The DPCO meant to: –Enable public access to medication –Provide a reasonable rate of return to companies –Ensure quality medication Allowed for government control over prices of pharmaceutical products –Restricted pre-tax profit for pharmaceuticals to 15% of sales

DPCO Amendments DPCO Amendments decreased price control 1979: –Compartmentalized drugs into 3 categories being life saving, Essential and Less essential –Prices of 370 bulk drugs and 4000 formulations controlled –Concept of Maximum Allowable Post Manufacturing Expenses Used to calculate potential market value of medication

Liberalization of Pharmaceutical Sector India’s drug policy influenced by Kelkar Committee Report of 1984 Drug policy of 1986 established a new price control regime –Reduced the extent of price control –Reduced the number of categories for exercising price control to : Industrial policy further reduced price control Introduced a Uniformed MAPE for all formulations under price control 1996: Foreign investment up to 51% was allowed 1997: National pharmaceutical pricing authority was created to review and revise existing price control 2000: FEMA replaced FERA

Currently, 28 drugs under price control 2002: 100% foreign participation allowed 2004: Indian genetic companies feature among the top companies in the world The Pharma industry placed 4 th in the world in terms of volume and 13 th in terms of value More than 70% of India’s 1 billion people have full access to drugs within the period from independence until the new patent regime

Why did we move away from a process patent regime? Generic drug industry copied wholly from the west –Why that may not be a correct proposition.