India which has stronghold in manufacture and export of generic drugs globally could lose its trade advantages in generics if it does not join US-led trade pact Trans Pacific Partnership Agreement (TTP), involving twelve Pacific Rim countries and concerning duty free trade, reduced tariffs and mutual regulatory recognition to members, according to patent experts.
TPP members including United States, Brunei, Chile, Singapore, New Zealand, Australia, Canada, Japan, Malaysia, Mexico, Peru, and Vietnam contributes 40 per cent of global GDP. According to a study, India will face loss of $50 billion of current exports due to rising discrimination against it by other countries if it opts to remain outside the multilateral trade agreement. India can contribute to the IP balance better from within the TPP than by remaining out of it, said Dr Gopakumar G. Nair, who is a patent expert in the country.
By India joining TPP, the country can expect to strengthen the dissenting voices in TPP and make TPP provisions more patient friendly, he said
USA and Japan, two TPP members represent half of that 40 per cent. India is the biggest supplier of generic drugs to the USA. Of the Rs. 98,000 crore pharmaceutical exports from India in 2014, Japan accounted for merely Rs. 400 crore, basically active pharmaceutical ingredients (APIs) and herbal products.
Traditionally Japanese market has been a tough market for Indian pharmaceuticals. Strict regulations have affected Indian pharma industry's generic medicines export to Japan. Once India joins TPP, it can cash in on the global trade network to boost its generics export to the second largest pharmaceutical market in the world, the patent expert opined.
The trade pact will open opportunities for Japanese generic companies to acquire generics from Indian manufactures through contract manufacturing collaborations, he added.
Besides USA, Japan, other small and medium countries joining TPP to make it mega regional. The aim of the trade pact is to do away with protectionism while providing protection by ensuring a more balanced trade environment and remove tariff and non-tariff barriers.
Most of the existing TPP members have refused to accept the TRIPs plus conditions of TPP such as Patent term adjustment, regulatory review exception, pharmaceutical data protection – market and marketing exclusivity, public health safeguards (compulsory licensing), patent linkage. The enlisted ‘pharmaceutical provisions’ of TPP have created a heightened sense of anxiety among Indian pharmaceuticals about losing advantage in generic market.
Allaying fears of Indian pharmaceuticals, Dr Nair said “Considering the benefit of TPP, the enlisted provisions could have less impact on the growth of Indian generics. The provisions would curtail early entry of new generic medicines and can lead to price rise due to lack of a healthy generic competition. But taking advantage of TPP, Indian pharma industry could boost its existing generics export to overcome losses. We often come across the reports that the India generic manufacturers have received warning letters from US FDA for failing to comply with quality standards and data requirements. All the regulatory hassles could be reduced once India becomes TPP member as there is an “unseen” relationship between regulatory and intellectual properties. In other terms, it will help boost generics export to USA and other Pacific Rim countries, at the same time, softening the TPP provisions by India’s contribution from within.”
Talking about compulsory licensing provision in TPP, he clarified that the compulsory licensing has nothing to do with price rise of generic drugs. So far India has granted a couple of pharma companies compulsory licence to manufacture generics to cope with rising prices of branded drugs. Compulsory Licencing provision is available for government to use in USA and is present in most patent laws of developed countries. The use of the CL provisions is a sovereign decision beyond Treaties other than Paris Convention and TRIPs.
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