Financial Daily from THE HINDU group of publications
Sunday, Dec 18, 2005


Group Sites

Home Page - Pharmaceuticals
Industry & Economy - WTO

WTO decision may TRIP generic drug cos

P.T. Jyothi Datta

Mumbai , Dec. 17

TWO years ago, domestic drug companies had heaved a sigh of relief when the World Trade Organisation's (WTO) executive body delayed a contentious decision on the export of medicines to countries with inadequate manufacturing capacity.

The "August 30 decision," as trade circles refer to it, involved a set of rules that were temporarily put in place through a "waiver" of the Trade-Related Intellectual Property Rights (TRIPS) agreement that had been agreed upon on August 30, 2003.

But away from the heat of the WTO negotiations now under way in Hong Kong, this temporary arrangement has been formalised into a "permanent solution." And this decision to amend the TRIPS agreement was taken in early December during consultations in Geneva in a build-up to the present WTO meet.

Drug companies and activists are concerned over the new system, which they feel is cumbersome and bureaucratic. Instead of guaranteeing access, a representative said, the new system could, in fact, trip up the export of less-expensive generic medicines to countries requiring them.

Under the amended system, a country wishing to import a generic version of a patented medicine would first have to notify the WTO of its exact needs regarding the patented medicine, and of its intent to issue a compulsory licence in order to import it. Only after that could another country also issue a compulsory licence to authorise the generic manufacture of the medicine for export.

Humanitarian organisation Médecins Sans Frontières (MSF) points out: "The amendment does not allow for the procurement of medicines through international tendering, which is the most common and efficient way of purchasing drugs."

A representative with the Indian drug industry further pointed out that having to notify the TRIPS Council every time a compulsory licence had to be issued would create a parallel dispute settlement body. Any complaint, meritorious or otherwise, against a generic company would have to be sorted out by the generic company itself and this could inflate costs, he pointed out. The idea is to make medicines accessible and affordable and this gets thwarted, he added.

Cipla's Joint Managing Director, Mr Amar Lulla, said: "According to our interpretation we can continue to export to countries where patents don't apply."

But MSF's Ms Ellen't Hoen told Business Line: "This amendment is not in the spirit of Dohas because Doha asked for an expeditious solution for production for export. The recent amendment is not expeditious."

Mr D.G. Shah, with the domestic drug industry pointed out: "Over the last two years, we have not seen any country making use of this provision for fear of reprisal by the big pharma. Malaysia tried but did not lift the quantity licensed. There are about three other attempts but nothing significant."

Related Stories:
WTO drugs deal: Does it really benefit developing countries?

More Stories on : Pharmaceuticals | WTO

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Pawar rules out FMC-SEBI merger

Justice Sodhi is SAT Presiding Officer
SC order raises revival hopes: NTC
Ranbaxy loses Lipitor case — US court favours Pfizer on `patent infringement'
WTO decision may TRIP generic drug cos
Canara Bank hikes term deposit rates
YES Bank IPO scam: Her office stays closed after SEBI bar

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line