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Friday, 02 May 2014 00:00
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US-India IPR battle is more than just about pharma

If the powerful pharmaceutical lobby was not able to get the US to downgrade India to a ‘priority foreign country’—renewing the concessional GSP import duty benefits for some Indian exports would have been the immediate casualty—it is largely because equally powerful US firms weighed in India’s favour. The booming aviation market that has resulted in huge orders for Boeing, for instance, would mean it is in Boeing’s interests that India not be targeted. As the US India Business Council pointed out in its submission to the US Trade Representative, US exports of defence technology, where a lot of IPR is built-in, jumped from a mere $250 million a decade ago to over $12 billion today—overall two-way trade has risen to $100 billion from around a fourth of that eight years ago and can touch $500 billion by the end of the decade. The big lesson here is that, as should be obvious from the US refusal to take firm action against China despite many labelling it a currency manipulator for decades, is that it pays to build a lobby in the US. And what better lobby than US firms selling to India, or US firms investing here—US firms, according to one estimate, have invested over $50 billion in India.

While India has done well to point out that its patent laws are WTO-compliant, there are several things it needs to do, even assuming it does not wish to change Section 3(d) of the Patents Act that US pharma finds so offensive. For one, given the limited number of people affected by the high costs of the Nexavar drug produced by

Bayer, this newspaper has maintained the compulsory licence (CL) issued was uncalled for. CLs are issued in the case of epidemics, if the Indian government felt Bayer’s price was exorbitant, it needed to negotiate with Bayer, or consider meeting part of the costs directly. The good news here, as FE reported last month, while the health ministry was pushing for a similar CL for Bristol-Myers Squibb’s anti-cancer drug Dasatinib, the industry ministry was against the idea. Insisting, as India does on many occasions, that ‘working’ the patent involve local manufacturing, is a needless irritant, and can easily be done away with. There are other areas where India’s actions have been perplexing, and the US Trade Representative’s Special 301 report brings some of these out—not having enough patent examiners, for instance, is something that can be easily fixed. Similarly, it is not clear why a CL clause was put in the National Manufacturing Policy for clean energy innovations. While India negotiates with the US for more wiggle room—few countries at India’s level of income provided as much IPR protection—in the form of differential pricing for various IPR-products, it needs to keep in mind the need to build more lobbies in the US. Embracing GM crops, for instance, would not just help Indian farmers, it would get a Monsanto to bat for India.


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