(Paranjoy Guha Thakuta, noted journalist, educator and commentator exposes how Modi is appeasing pharmaceutical corporations at the cost of India’s poor patients’ access to medicines. A shorter version of the piece appeared earlier in Asian Age, Nov 18, 2014. Subtitles our own – ed/)

The government of India led by Prime Minister Narendra Modi took a lot of credit for standing up to pressure from the United States which wanted India to agree to a trade facilitation agreement in the World Trade Organization (WTO) without finding a permanent solution to the issue of what should be appropriate food stock-holding norms. In November, the US agreed to India’s concerns whereas it had earlier accused this country of almost single-handedly blocking a deal in the WTO.

Weakening Right to ‘Make in India’

But this is only one part of the story. Quietly and somewhat surreptitiously, the Modi government has accommodated and acquiesced with American interests by going along with the demands of large multinational corporations (MNCs) that manufacture pharmaceuticals. The government is in the process weakening domestic companies that have been producing and selling a wide range of medicines at a fraction of the prices at which the MNCs market their products across the developing world, notably in African countries. Such medicines include drugs for treating HIV/AIDS, diabetes and cancer.

Prime Minister Modi has been trying to market the “Make in India” slogan he coined. One of the few industry segments where India is still ahead of China is in the production of pharmaceuticals. Some of the recent decisions taken by the government may end up making Indian pharmaceutical companies weaker, making it increasingly difficult for such firms to compete against international conglomerates -- often called Big Pharma. That’s not all. The government’s actions will weaken local companies to an extent that will threaten to make the objective of providing “affordable medicines for all” difficult to achieve.

Over the recent past, the Modi government has initiated several moves that willy-nilly play into the hands of Big Pharma. These moves relate to contentious issues ranging from pricing of widely-used medicines to Trade Related Aspects of Intellectual Property Rights (TRIPS) of pharmaceuticals and pharmaceutical formulations in the WTO. The first of these moves, which came a short while before the Prime Minister’s visit to the US in September, saw a rollback of the guidelines on prices of medicines that were 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. Many of these drugs are meant for those suffering from cardiac diseases and diabetes, two ailments that are very widespread in India. Within barely two months of the NPPA capping the prices of these 108 drugs, the government curiously instructed it to revoke the guidelines. While the government subsequently clarified that the July cap on prices would remain, what the new move has done is to effectively ensure that the NPPA cannot take similar action in the future. The government decision has been interpreted as one that is against the interests of consumers. And, not surprisingly, given the timing of the move, the decision was perceived as one that would send the “right signals” to US-based drug MNCs.

Placating US Drug Corporations

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 Modi’s visit to the US. While his Madison Square Garden “rock star” performance attracted considerable media attention, few looked into the fine print of the US-India joint statement issued at the end of the visit. That statement 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”.

Academics in the US have pointed out that the American administration consistently uses trade working groups to push for more strict patenting regimes that favour Big Pharma. Professor Brook Baker of the North-Eastern 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 the non-government organisation, Knowledge Ecology International, too has warned that the Indian government 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 TRIPS 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.

In November came indications that a group of lobbyists representing American pharmaceutical firms would, during a visit to India, be meeting up with judges and members of the Intellectual Property Appellate Board (IPAB) who handle disputes relating to intellectual property rights (IPR). After activists raised a hue and cry about the proposed meetings, these were called off.

Pro-US Anti-India Man is Modi’s Chief Economic Adviser

It is noteworthy that in October the Modi government appointed a person who holds strong pro-Big Pharma views to an influential position. He is none other than Arvind Subramanian, chief economic adviser to the government of India in the Ministry of Finance. As recently as March, Dr Subramanian, who used to be an academic in an American research institution, had advised the US government to initiate disputes against India before the WTO on pharmaceutical patents. He had argued 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 ... 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.

Packing the Patents Panel With Pro-Corporate/Pro-BJP People

The constitution of a six-member committee by the Department of Industrial Policy and Promotion (DIPP) in the Ministry of Industry and Commerce has also raised quite a few eyebrows. The panel will be deliberating on the public interest ramifications of IPR. The committee is headed by the former chairperson of the IPAB, Prabha Sridevan, who was earlier a judge of the Madras High Court. Whereas Sridevan had upheld the grant of India’s first compulsory licence for Bayer’s anti-cancer drug, Nexavar, all other five members of the committee apparently have conflicts of interest.

One member is Pratibha Singh, a lawyer who is married to Additional Solicitor General Maninder Singh, who used to work as a junior lawyer under Finance Minister Arun Jaitley. The Singh family controlled law firm has represented various Indian and international drug companies, including Cadila. Dr Unnat Pandit, deputy general manager of Cadila Pharmaceuticals is a member of this committee. Another member of the panel, advocate Punita Bhargava, is niece of Minister Jaitley and founding partner of Inventure that describes itself as a firm providing “legal services in the field of intellectual property laws”. Yet another member of the committee is Narendra K. Sabarwal, retired deputy director general, World Intellectual Property Organisation and head of the IPR committee of the industry lobby group, the Federation of Indian Chambers of Commerce and Industry (FICCI). The last member of the panel is Rajeev Srinivasan, director of Asian School of Business in Kerala, a private business school.

It was found rather strange that the DIPP did not choose any expert from the academic world who specialises in IPR though another wing of the government, the Ministry of Human Resources Department, has instituted some 20 chairs in IPR in various universities, including national law universities, the Indian Institutes of Technology and the Indian Institutes of Management. It was also rather unusual that an article on the setting up this committee was published briefly on the website of the Times of India and then taken out.

Big Pharma Profits Vs Poor Patients

The government’s rather conciliatory attitude towards Big Pharma has ironically come at a time when courts in India have been proactive in upholding the patent rights of domestic producers of pharmaceuticals against HIV/AIDS, cancer and diabetes. Switzerland-based MNC Novartis recently moved the Delhi High Court seeking to restrain Cipla from making an affordable generic version of its drug, Onbrez, used in respiratory ailments, for sale in the local market. Novartis argued in its affidavit filed in court that it will continue to import the drug from Switzerland, and not locally manufacture it, which is allegedly illegal because the law states that a patent has to be “locally worked” to make it affordable and easily available to domestic patients. Cipla’s version of Onbrez is priced at one-fifth the price of the Novartis product.

Earlier, Bayer of Germany failed in its attempt to block the sale in India of a cheap generic version of its cancer drug, Nexavar, after a ruling of the Supreme Court upheld earlier court judgements. An Indian company, Natco, had opposed Bayer’s challenge to a compulsory licence allowing it to sell a copycat version of the drug used to treat kidney and liver cancer. Bayer had claimed the compulsory licence had weakened the international patent system thereby constraining research on new drugs. Natco had been granted permission in 2012 by the country’s patents office to sell a generic version of Nexavar at Rs 8,800 for a month’s dose, against a price of Rs 2,80,000 charged by Bayer.

In another much publicised case in 2013, Novartis had suffered another defeat in the Supreme Court when its attempt to win patent protection for its cancer drug Glivec was dismissed. In recent years, courts in the country have revoked patents granted to other Big Pharma companies such as Pfizer , Roche and Merck.

On a different plane, in August, the Vasundhara Raje government in Rajasthan announced that it would scale down the state government’s free medicines and diagnostics scheme, Mukhyamantri Nishulk Dava Yojna, that had been 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 was originally conceived. The scheme applied to anybody who sought treatment from a public health facility in Rajasthan. However, under the new dispensation, only beneficiaries of the food security programme 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.

The string of instances cited all indicate that the Narendra Modi government is paying lip service to the cause of “affordable medicines for all” and the avowed goal of “Make in India” while devising policies and programmes that favour large multinational pharmaceutical corporations instead of domestic companies that make cheap medicines for the poor in this country and in the world.

Box matter

Secret Promises to the US

The Obama-Modi joint statement mentioned their commitment to “enhancing engagement on Intellectual Property Rights (IPR) in 2015 under the High Level Working Group on Intellectual Property, to the mutual benefit of both the countries.” As in the Nuke Deal, this is ‘code’ for promises made by Modi to US corporations that will threaten Indian patients’ lives. As with the Nuke Deal, the Modi Govt is not telling us anything about the promises – we are getting to know from the statements by some on the US side.

Here are some details, courtesy a report in the Economic Times (US has secured commitments from India on IPR, claims Michael Froman Soma Das & Dilasha Seth, ET Bureau Feb 5, 2015).

“A remark tucked away in the top US trade official’s testimony before American lawmakers, stating that the US has secured commitments from India on intellectual property rights, has alarmed Indian drugmakers and public health activists.

“‘Use of the out-of-cycle review helped to secure commitments from India in the 2014 Trade Policy Forum on a broad range of IP issues of concern to the United States and its stakeholders,’ US trade representative Michael Froman told the US Senate Committee on Finance last week.

“This came immediately after Prime Minister Narendra Modi last week spelt out India’s readiness to accept suggestions made by a joint working group with the United States on intellectual property rights (IPR).

“Now, domestic drugmakers and public health activists warn that if India agrees to the US’ stated demands on IPR, it would risk the health of millions of patients by delaying access to low-cost generic drugs.It could also impact domestic drugmakers, whose business model relies on launching cheaper generic versions of new drugs discovered by the innovator multinationals.

“‘What are these commitments government is making to the US? The secrecy around these ongoing IPR negotiations with the US is disturbing. The government must come clean on this matter and tell the public what commitments have been given,’ said Anand Grover, director at Lawyers Collective.

“’There are indications that the Indian government is changing its stand and taking a favourable view to the US demand for data exclusivity and patent linkage. What is most troubling is that this move would only benefit foreign MNCs, leaving Indian generics makers in the lurch and risking the health of millions of patients in the bargain,’ he said.