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The 2014 National Trade Estimate Report on Foreign Trade Barriers (NTE) has slammed the price control regulations in Indian pharmaceutical sector as a deterrent to foreign investors and also taken harsh view on the recent developments in intellectual property rights (IPR) related to pharma.
“India’s stringent and non transparent regulations and procedures governing shareholding in local enterprises inhibit investment and increase risk to new market entrants. Price control regulations in some sectors, such as the pharmaceutical sector, have further undermined the attractiveness for foreign investors of increasing their equity holdings in India,” according to the report released recently.
The report by US Trade Representative (USTR) office highlights significant foreign barriers to US exports and is placed as a companion piece to the President’s Trade Policy Agenda.
“India remained on the Priority Watch List in the 2013 Special 301 Report because of concerns regarding weak protection and enforcement of intellectual property rights (IPR). Recent patent-related actions have only heightened these concerns. These include the March 2012 decision of the Controller General of Patents, Designs and Trademarks to effectively require an innovator to manufacture in India in order to avoid being forced to license an invention to third parties, and provisions in India’s National Manufacturing Policy that seek to curtail patent rights to facilitate technology transfer in the clean-energy sector,” the report said.
“In addition, an April 2013 Indian Supreme Court decision appears to confirm that India’s Patent Law creates a special, additional criterion for patentability for select technologies, like pharmaceuticals, which could preclude issuance of a patent even if the applicant demonstrates that the invention meets the internationally-recognised criteria for patentability,” it said.
According to the USTR, India also continued to lack effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical and agrochemical products. Additionally, India’s 2012 Copyright Law amendments failed to effectively implement the WIPO Internet Treaties and protect against circumvention of technological protection measures. Stronger protection and enforcement is needed for trademarks and copyrights, said the report.
“Beginning in 2002, India allowed 100 per cent FDI in the pharmaceutical sector for several years with no requirement of government approval. In December 2012, India modified that policy to require approval by the Foreign Investment Promotion Board for any FDI in brownfield investments while maintaining the “automatic” approval route for greenfield investments. Following further government review, in January 2014 India reaffirmed this policy of allowing 100 per cent FDI in the pharmaceutical sector but requiring government approval only for brownfield investments,” the report pointed out.
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