The Asian Age
The Deccan Chronicle

Obama & The P-Word

Nov 09th, 2010

Can a US President visiting India avoid the “P” word? The answer is a resounding “no”, as Barack Obama learnt the hard way. His attempt to avoid a direct reference to Pakistan while remembering the November 26, 2008, Mumbai terror attack victims met with high-decibel protest in this country on the very first day.
Soon, at an event meant to be a powwow between the youthful US President and India’s GenNext, a student popped the question: Why does the US not declare Pakistan a “terrorist state”? Mr Obama’s diplomatic response — Pakistan has a lot of potential, but has some “extremist elements within it” and it is by no means the only country to have such elements, et cetera — promptly became the prime topic of discussion in almost every TV channel and newspaper. The headline-grabbing “P” word surfaced several times on Monday, during his press conference, and in his address to the Indian Parliament.
But there has barely been a mention of the other “P” word — pharmaceuticals — though there are big issues between India’s pharmaceutical industries, in particular generic drug manufacturers, and Big Pharma in the US. In the run-up to Mr Obama’s visit, public health activists, both within and outside this country, have sounded the alarm on many of these issues.
On November 4, the US-based NGO Health GAP (Global Access Project) stated: “Civil society organisations in the US and India are gravely concerned that President Obama is seeking policies that will undermine access to affordable Indian generics”. Such organisations argue that India’s status as “pharmacy to the developing world”, its ability to make low-cost, generic versions of newer medicines, is under threat; even US-funded AIDS treatment programmes, heavily dependent on generic versions of AIDS medicines made by Indian manufacturers, will be forced to waste money procuring more costly medicines.
The early shots were fired months back. This May, the United States Trade Representative (USTR) released its annual “Special 301 Report”, listing countries that USTR claims are not protecting intellectual property sufficiently. India remains on its “Priority Watch List”, in part because India’s laws require patented medicines to show actual increased effectiveness in treating a disease.
In recent weeks, business journalists in India have reported on the warning by big pharma companies in the US that New Delhi could lose out in the global competition in attracting investment from them if the country refuses to strengthen regulatory protection for patented drugs.
The soaring oratory of statesman-salesman Obama and his positive message to India, as he addressed representatives of over a billion people in the Central Hall of Parliament, will be discussed and dissected for days. But predictably, the US President avoided the other “P” word, given its huge potential to strike a dissonant note. But behind the scenes, the pressure is not going away. The US as well as the European Union are asking India to grant monopoly protection to the data that drug companies use to obtain regulatory approval for a medicine. This measure, called “data exclusivity”, would undermine cost cutting generic competition by delaying the entry of generics to market. Data exclusivity is not required by the World Trade Organisation (WTO) — but pharmaceutical companies have pushed aggressively for it. India’s refusal to create a regime of data exclusivity was another reason for the Special 301 Report listing.
A few days back, a top official with the US drugs regulator had hinted at tighter regulation for generic drugs, a move that could spell trouble for the Indian industry that depends on the world’s largest drug market — the US — for about a quarter of its exports.
I caught up with James Love, director, Knowledge Ecology International, a US-based NGO which has been working on the issue of affordable medicines. In a recent article in the Huffington Post, Mr Love had flagged his key concerns about specific aspects of the US-India business relationship, the central focus of Mr Obama’s trip to India.
A number of NGOs working on public health issues, Mr Love pointed out, are concerned that the President may push India to adopt more strict intellectual property protections on pharmaceutical drugs.
India enacted legislation in 2005 to implement its WTO obligation to grant patents on pharmaceutical products, but with safeguards. These safeguards, which were allowed by the WTO rules, were praised by public health groups, but condemned by big drug companies.
As candidates, both President Obama and secretary of state Hillary Clinton told health and development groups they would change the Bush administration policy of pressuring developing countries over the issue of drug patents. But now, the Obama administration has reportedly called upon its regulators to push India hard to do more. Washington wants India to lower its standards for awarding patents.
Another provision under attack is compulsory licensing, a green signal which can be given by a government for production and supply of a generic version of a patented drug in lieu of reasonable royalty to the patent holder. It is a legal means of getting cheaper medicines.
Compulsory licensing has been invoked not just by developing countries such as Mozambique, Zambia, Indonesia, Brazil or Ecuador. Even developed countries such as Italy and Canada have invoked it in the past for medicines which were unaffordable or unavailable. The US threatened to issue a compulsory licence for the antibiotic Cipro following the anthrax attacks a few years ago. Drug companies responded by lowering their prices by as much as 40 per cent.
But such mechanisms which provide safeguards for consumers are now supposedly under review. The Organisation of Pharmaceutical Producers of India, a group of multinational drug-makers, feels that provisions like compulsory licensing can impact foreign investment and innovation in the country.
Are public health groups, including the Nobel Prize-winning Medecins Sans Frontieres (MSF) which campaigns for access to affordable medicines, being too idealistic in objecting to these efforts to push higher Intellectual Property Rights (IPR) norms for the Indian pharma industry? What about innovation? Drug manufacturers say they have to have a strong IPR regime to be able to finance research that will lead to new medicines. But strong patents are likely to lead to costlier drugs in the current scenario. How can innovation be made compatible with access to affordable medicines? These are issues too important to be left just to politicians and bureaucrats. If I am going to pay a lot more for life-saving drugs, I would want to be as informed as possible about all the issues on the table.

Patralekha Chatterjee writes on development issues in India and emerging economies and can be reached at



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