BriefingnoteMSFAccessCampaignwww.msfaccess.

orgFebruary2013
TradingAwayHealth:

WhattoWatchOutforinFreeTradeAgreements

More than eight million people living with HIV/AIDS are on treatment today. This is largely thanks to
affordable medicines produced in India, as generic competition brought the price of lifesaving HIV drugs
down by 99% in the course of the last decade and enabled treatment scaleup on a massive scale. Indias
contributiontothehealthofthedevelopingworldcannotbeunderestimated:morethan90%ofthedonor
fundedmedicinesforHIVprogrammesaresourcedfromIndiangenericcompanies.

Genericcompetitionsaveslives.Highmedicinepriceshurtpatientsandrestrictthecapacityofgovernmentsandothertreatmentproviderstorespondtomedical
needs.Asamedicaltreatmentprovider,MdecinsSansFrontires/DoctorsWithoutBorders(MSF)reliesonaffordable,qualitygenericmedicinesproducedin
Indiatotreatmanydiseases,includingtuberculosis,malaria,HIV/AIDSandotherinfectionsthataffectthepoorestandmostvulnerablepopulations.

Yettoday,medicinesremainaluxuryfortoomanypeopleindevelopingcountries.Freetradeagreement(FTA)negotiationsbetweenIndiaandcertaindeveloped
countriesthreatentotightenthescrewsontheproductionandexportofaffordableessentialmedicines,sothattheyareoncemorepricedoutofreach.

WhileIndiasdiscussionswiththeUSarestillattheinceptionstage,severalroundsoftalkshavebeencompletedwithEuropeanFreeTradeAssociation(EFTA),
andnegotiationswiththeEuropeanUnion(EU)arenowatanadvancedstage.IneachoftheseFTAs,theUS,theEUandEFTA(ledbySwitzerland)havetabledor
areplanningtotableharmfulintellectualproperty(IP)provisionswhichthreatentolimittheproductionofaffordablemedicinesinIndiaandtheiruseacrossthe
developingworld.

Aggressive IP proposals will in the long run undermine the constitutional right to life; dismantle public health safeguards enshrined in national laws, and
significantlyreducethelocalcapacitytoproducepriceloweringgenericmedicines.YetFTAsattractlittlepublicattention,astheyarenegotiatedinsecret,despite
repeatedrequestsfrompublicinterestgroupstoopenthemtopublicdebateandparliamentaryscrutiny.

GovernmentslikeIndiahavearesponsibilitytoensurethatpublichealthinterestsarenottrampledbycommercialinterests,andmustresistpressurestoerode
hardwonlegalflexibilitiesunderinternationallawandtraderulesthatarecrucialtosafeguardpublichealthastheyrepresentalifelineforpeopleindeveloping
countries.

Asamedicalhumanitarianorganisationworkinginnearly70countries,MdecinsSansFrontires/DoctorsWithoutBorders
(MSF) calls on India to reject provisions that will harm the production, registration and supply of affordable generic
medicinesandtoexcludeintellectualpropertyprovisionsfromcurrentorfutureFTAnegotiationsaltogether.

BriefingnoteMSFAccessCampaignwww.msfaccess.orgFebruary2013

SomeofthemostharmfulprovisionsinFTAsthreateningaccesstomedicinesarehighlightedinthetablebelow:

ProposedProvision

ImpactonAccesstoMedicines

Patentseventuallyrunoutbutnotifpharmaceuticalcompaniesareprovidedopportunities
toperpetuallyextendorrenewmonopolies.Byapplyingforpatentsonobviousmodifications

andnewuseofexistingmedicines,companiestrytoobtainpatentsonknownsubstancesall
WHATTHISMEANS:
overagain.Indiacurrentlylimitsthispractice,knownasevergreening,undersection3(d)of
Indiawouldberequiredtopatentnewuseorobvious
the Patent Act. Preventing patents from being granted too easily on new use or on obvious
modificationsofexistingmedicines.
improvementsofexistingdrugshasprotectedgenericcompetitioninmanytherapeuticareas

includingHIV,TBandcancer.
PROPOSALTABLEDINWHICHFTA:

US(anticipatedifUSFTAnegotiationsstartwith
Both the US and the Swiss negotiators are likely to ask for the removal of section 3(d)
India)
safeguardswiththeaimtogetthelegalframeworkforexaminingpatentapplicationsinIndia
EFTA(currentlybeingnegotiated)
relaxed.Withoutsuchprovisions,multinationalpharmaceuticalcompaniesarelikelytoobtain

patentsfarmorewidelyinIndia,effectivelyblockinggenericcompetition.

Under Section 25 of the Indian Patent Act, third parties are also allowed to provide
Prohibitingpregrantoppositions.
information to the patent office setting out why a patent should not be granted. These

initiatives are known as pregrant patent oppositions. Given the large volume of patent
WHATTHISMEANS:
applications
on pharmaceuticals, examiners often miss information related to a patent
Indiawouldhavetoforbidchallengestoweakorinvalid
application
under
consideration. If attention is drawn to information that shows the patent
patentsuntilaftertheyhavebeengranted.
applicationis,forexample,foraderivativeoranewuseofaknowndrug,thelikelihoodofa

patent being wrongly granted is reduced. As such, patent oppositions have provided an
PROPOSALTABLEDINWHICHFTA:
importantpublichealthsafeguardwithanumberofapplicationsonkeysecondlinemedicines
US(anticipatedifnegotiationsstartwithIndia)
forHIVsuchasdarunavir,lopinavirandritonavirbeingrejectedbytheIndianpatentoffice.

Once negotiations start, the US is likely to ask for the removal of this system, as without
opposition from patient groups and generic competitors, US companies are likely to obtain
patentsfarmorewidelyinIndia,effectivelyblockinggenericcompetition.

Data exclusivity would mean that the Drugs Controller General of India (DCGI) is prohibited
Introducingdataexclusivity.
fromregisteringagenericmedicineaslongastheexclusivitylastsovertheclinicaltrialdata

Loweringthebarofpatentability.

BriefingnoteMSFAccessCampaignwww.msfaccess.orgFebruary2013
(usually5to10years).Inadditiontobioequivalencedatathatiscurrentlyrequired,domestic
producers will additionally have to submit their own safety and efficacy data to register the
generic medicines. This will oblige them to repeat clinical trialssomething that takes years
and involves costs that the generic companies usually cannot afford. But more importantly,
therepetitionofclinicaltrialsraisesseriousethicalconcerns.

ExclusivityistriggeredwhenapharmaceuticalcompanysubmitsdatatotheDrugRegulatory
Authorityonanewdrugbutalsomostoftenonanynewformulationofanoldmedicine.As
longasacompetitorcannotberegisteredasaresultofexclusiverightsoverpharmaceutical
testdata,pharmaceuticalcompaniescanenjoymonopoliesonalargenumberofmedicines,
andcanthuschargehighpricesevenwhenthedrughasbeenfoundnottodeserveapatent
orthepatenthasexpired.

WHATTHISMEANS:
Indiawouldhavetodelaytheregistrationofgeneric
versionsofmedicinesevenwhenthereisnopatenton
thatmedicine.

PROPOSALTABLEDINWHICHFTA:
US(anticipatedifnegotiationsstart)
EFTA(currentlybeingnegotiated)
WasalsotabledinitiallyasapartoftheEUFTA
negotiations,butwithdrawnunderpublicpressure

Extendingpatenttermdurations.

WHATTHISMEANS:
Indiawouldberequiredtoextend20yearpatent
monopoliesbyatleast5yearstocompensatefordelays
intheregulatoryprocess.

PROPOSALTABLEDINWHICHFTA:
US(anticipatedifnegotiationsstart)
WasalsotabledinitiallyasapartoftheEUIndia
FTAnegotiations,butwithdrawnunderpublic
pressure

Introducingpatentlinkage.

WHATTHISMEANS:
Indiasdrugregulatoryauthority(theDrugControllerof

India)wouldbeforcedtolinkregulatoryapprovalof
genericmedicineswiththepatentstatusofthemedicine,
andwouldbeprohibitedfromapprovinggeneric

Atpresent,patentsondrugsinmostcountrieslastfor20yearsfromthedateoffiling.Thereis
no more straightforward way to extend a company's monopoly over a drug than to extend
thelifeofthedrugspatentbeyond20years.

Theextrayearsaddedtothepatentareextrayearsinwhichthepatentholdercanmaintaina
monopoly position and continue to charge artificially high prices for the drug, free from
genericcompetition.

At present a drugs patent status and its registration status are two separate things. Linking
patent status and the registration of medicines means that the drug regulatory authority is
requiredtowithholdmarketingapprovaltoagenericversionofapatenteddrugregardlessof
whetherthepatentgrantedisvalidornot.
TheDCGIlacksthenecessaryresourcesandexpertisetoassesswhetheradrugispatentedor
not,thepatentisvalidorwouldnotbeinfringedandwouldthusbemorelikelytoenforceall

BriefingnoteMSFAccessCampaignwww.msfaccess.orgFebruary2013
medicinesuntilpatentshaveexpired.

PROPOSALTABLEDINWHICHFTA:
US(anticipatedifnegotiationsstart)

IntroducingnewformsofIPenforcement.

WHATTHISMEANS:
Bygivingmultinationalpharmaceuticalcompaniesafree
reintodemandabusiveenforcementofintellectual
propertyrights,theIndianjudiciarywouldbeunableto
balanceintellectualpropertyrightswiththepeoplesright
tohealth

PROPOSALTABLEDINWHICHFTA:
EU(currentlybeingnegotiated)

US(anticipatedifnegotiationsstart)

Introducinginvestmentclauses.

WHATTHISMEANS:
Theinvestortostatedisputemechanismhiddeninthese
agreementsiseffectivelyusedbycorporationstosue
governments,seekingdamagesoverdomestichealth
policiesoutsideofdomesticcourts.

patentsincludinginvalidonesturningtheIndianDrugRegulatorintoaPatentPolice,wasting
public resources that are much needed for ensuring the safety and efficacy of medicines in
India.

Patent linkage also undermines the Bolar provision Section 107A of the patent law that
allows generic producers to manufacture a generic version of a patented drug, conduct all
tests and obtain necessary marketing approval (or registration) in advance, so that a more
affordable generic can be put on the market as soon as the patent expires. It can also
underminetheuseofacompulsorylicenceassuchalicencewouldnotautomaticallyliftthe
baronregistrationbythedrugregulatoryauthorityuntilthepatenttermhasended.

Enforcement provisions have a range of harmful effects on the production of and trade in
generic medicines by affecting how the Indian courts can handle disputes over intellectual
property rights. The impact is broadranging: multinational pharmaceutical companies could
claimthattheirIPisbeinginfringeduponandblocklegitimatemedicinesfromleavingIndiaon
their way to people in developing countries; third partiessuch as treatment providers like
MSF could become subject to legal action simply for buying or distributing generic
medicines.

IfIndiaagreestotheseclauses,theIndianjudiciarywillhaveitshandstiedandwillnolonger
be able to balance intellectual property rights with peoples right to health. This is in direct
contraventiontoacountrysrighttoplacepublichealthaboveIPrights.

The investment chapter of FTAs would expand multinational companies ability to sue the
Indian government when it regulates health in the public interest. India could thereby be
prevented from rejecting, overriding or revoking a drug patent to increase access to a
medicine,orfromimplementingdrugpricecontrols.

InvestortoState dispute mechanisms hidden in the investment chapter can be effectively

usedtosueoutsideofdomesticcourts,withlargesumsofdamagesbeingclaimedininvestor
friendlyarbitrationforums(suchastheICC,ICSID,UNCITRAL)togeneraterulingsthatfavour
theclaimsofmultinationalcompaniesoverthegovernmentsrightandneedtoregulatepublic

BriefingnoteMSFAccessCampaignwww.msfaccess.orgFebruary2013
PROPOSALTABLEDINWHICHFTA:
US(anticipatedaspartoftheUSIndiabilateral
investmenttreatynegotiations)
EU(currentlybeingnegotiated)

health.Severalsuchdisputeshavealreadybeenfiledbycorporationsagainstgovernments,in
order to force a reversal of governmental public health policies and judicial decisions on
patentability (for example tobacco company Phillip Morris vs. Uruguay, Phillip Morris vs
AustraliaanddrugcompanyEliLillyvs.Canada).KeycountrieslikeSouthAfricaandAustralia
havealreadyannouncedtheirintentiontoexcludeinvestortostatedisputemechanismsfrom
futureinternationaltradedeals.

MSFRECOMMENDATIONS:

Increasetransparency
FTA negotiations that affect public health must be conducted with adequate levels of transparency and public scrutiny, and access to the
negotiating texts must be increased. Certain industry associations and lobby groups have privileged access to the draft text tabled in the
negotiations,butthisiswithheldfrompublicinterestorganisations.

ForFTAsundernegotiation:rejectharmfulmeasures
FortheEUIndiaFTA,IndiannegotiatorsfromtheCommerceMinistryhavealreadyrejectedpatenttermextensionanddataexclusivity;they
should reject overly broad intellectual property enforcement measures from the intellectual property chapter. They should remove
intellectualpropertyrights(IPR)fromthedefinitionofinvestmentintheinvestmentchapteroftheproposedEUIndiaFTA;andremove
theinvestortostatearbitrationmechanismfromtheinvestmentchapter.IntheEFTAnegotiations,negotiatorsshouldeliminatebarriersto
affordablemedicinesbyexcludingprovisionsonloweringthecriteriaofpatentability,dataexclusivityandintellectualpropertyenforcement
measuresfromtheintellectualpropertychapter.

ForfutureFTAnegotiations:intellectualpropertyshouldbeexcluded
BeforeengaginginbilateralFTAnegotiations,itisimportanttoassesstheimpactoftheextremelyrestrictiveIPprovisionsthatarelikelytobe
tabledbycountriesliketheUS.NegotiationsontheIPchapterwillopenuppressureonnegotiatorstoincludeclausesharmfultothehealthof
peopleindevelopingcountries.

Recognisepreviouscommitmentstoaccesstomedicines
Indiashouldensureitcanfulfilitsroleasthekeyglobalplayerinthesupplyofaffordablemedicinestothedevelopingworld,andensurethat
thefinaltextofFTAsarealignedwiththeobjectiveofsafeguardingaccesstoaffordablemedicinesandtherighttolife.Indiashouldhonour
itscommitments,includingthe2001WTODohaDeclarationonTRIPSandPublicHealth,andthe2008WHOGlobalStrategyandPlanofAction
onPublicHealth,Innovation,andIntellectualProperty.
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