Made for Big Pharma

Prime Minister Narendra Modi may be patting himself on the back because President Barack Obama has agreed to India’s position on food stockholding norms in World Trade Organisation (WTO). However, New Delhi seems to be bending over backwards to accommodate the American government and giant multinational corporations (MNCs) in the pharmaceutical industry, which will work to the detriment of our country’s interests.

In less than six months, the Modi government has taken several steps that play into the hands of large international drug companies, or Big Pharma as these are popularly known, on a number of issues ranging from pricing of commonly-used medicines to intellectual property rights (IPR) of pharmaceutical formulations.

The first of these steps, which came on the eve of the Prime Minister’s visit to the US in September, entailed a rollback of guidelines issued by the National Pharmaceuticals Pricing Authority (NPPA) in May.

The guidelines, issued under the Drug Price Control Order, 2012, gave the NPPA the power to fix prices of even those drugs that were not on the national list of essential medicines. Using these guidelines, in July, the NPPA had capped the prices of 108 medicines — most of them for cardiac diseases and diabetes, two very widespread ailments in India. Within two months of the NPPA order capping the prices of these 108 drugs, the government instructed it to revoke the guidelines. While it later clarified that the July cap on prices would still remain valid, the order has effectively ensured that the NPPA cannot take similar action in the interest of consumers in future. Given the timing of the move, this was seen as an attempt by the Indian government to send the “right signals” to US-based drug MNCs.

The next indication of the government putting the interests of the pharmaceutical industry above that of India’s poor came during the course of the PM’s visit to America. The US-India joint statement issued at the end of the visit contained a paragraph that talked of establishing an annual “high-level intellectual property working group” which would have “appropriate decision-making and technical-level meetings as part of the Trade Policy Forum”. There have also been indications that American lobbyists would get to interact with Indian judges who deal with IPR issues.

Certain US experts have pointed out that the American administration consistently uses trade working groups to push for more severe patenting regimes that favour Big Pharma. Professor Brook Baker of the Northeastern University School of Law has cautioned that the working group would give the US a dedicated forum to continue to pressure India to adopt tougher patent protection measures. Jamie Love of NGO Knowledge Ecology International believes India would be under pressure to liberalise drug patents and to block or restrain the use of compulsory licensing.

Compulsory licensing is when the government of a country allows a company to produce a patented pharmaceutical product or use a manufacturing process without the consent of the patent owner — this is one of the “flexibilities” on patent protection included in the WTO’s agreement on intellectual property or the Trade-Related Aspects of Intellectual Property Rights agreement. Compulsory licences are one of the most effective tools used by developing countries to break the monopoly pricing power of drug MNCs, especially for life-saving and essential drugs. Even the US government used this provision to threaten Bayer when the anthrax epidemic took place in 2009.

If there was any doubt that these early signs indicated the direction in which the Modi government is moving, it was dispelled when the government appointed Arvind Subramanian as the chief economic adviser to the Government of India in the ministry of finance in October. As recently as March, Dr Subramanian,  as an academic in the US, had advised the US government to initiate disputes against India before the WTO on pharmaceutical patents and had also argued strongly for dilution of provisions in the Indian patent law that prevent frivolous patenting and also prevent pharmaceutical companies from getting extensions on patents through tweaking existing drugs and claiming them to be innovations.

He had submitted a written testimony to a US congressional committee as part of the process of review of IPR protection of various countries, including India. In that testimony, Dr Subramanian stated: “If India does not address the problems created by Section 3(d) of the patent legislation or by compulsory licensing... the US should consider initiating WTO disputes against India.”

He justified this approach on the ground that India took its WTO obligations seriously and had a good track record of implementing WTO’s dispute settlement rulings. He added that, for the US, “the virtue of using WTO dispute settlement was that it would be diplomatically and politically less confrontational than unilateral and bilateral actions”. In the same submission, he recommended that “India could consider eliminating the additional efficacy requirement for patentability in Section 3(d) of its patent law” and that “India could commit to a stay on government-initiated compulsory licenses”. Both these recommendations align closely with the demands of the US pharmaceutical industry.

In line with the decisions mentioned that are bound to, in the long run, hurt the Indian consumer, particularly the poor, is another decision, taken by the Rajasthan government headed by Vasundhara Raje. In August this year, the state government announced that it would scale down the much-acclaimed free medicines and diagnostics scheme, Mukhyamantri Nishulk Dava Yojna, launched in 2011 by the previous Congress government led by Ashok Gehlot. The Raje government said it would adopt a “targeted approach” instead of letting the scheme remain “universal” as it originally was.

The scheme applied to anybody who sought treatment from a public health facility in Rajasthan. But under the new dispensation, only beneficiaries of the food security scheme will be eligible and this scheme is itself being reviewed. Nearly 8.5 million people would be removed from the list of beneficiaries, the state’s minister for food and civil supplies, Hem Singh Bhadana, told the Rajasthan Assembly in July. This is clearly against the interests of the underprivileged.

All these steps threaten to make the objective of “affordable medicines for all” even more difficult to achieve than it already was. India is ahead of China in very few sectors and one of them is pharmaceuticals. The moves outlined will make Mr Modi’s “Make in India” policy farcical, at least for Indian companies making medicines for the poor here as well as in other developing countries.

The writer is an educator and commentator