The Indian government is to reimburse drugmakers for the extra costs incurred when shipping their products to developing nations and avoiding the European Union (EU), where a number of shipments have been confiscated recently, it was announced in August 2009.
More than 20 shipments of generic drugs, manufactured by companies such as Aurobindo, Cipla and Dr Reddy’s, have been seized in the past 16 months, according to government officials. Shipments were seized in the Netherlands, France, Germany and the UK while on their way to Asia, Africa and Latin America, after claims that they were breaching EU intellectual property (IP) laws.
India is issuing a formal complaint to the World Trade Organisation’s dispute settlement body, claiming that the EU has misused customs regulations to unlawfully seize the medicines. Particularly highlighted is EC Regulation 1383/2003, which is designed to protect the IP rights of EU member states and allows the seizure of shipments infringing IP regulations or if they are believed to be counterfeit.
A group of non-governmental organisations have called for the World Health Organisation (WHO) and the WTO to investigate the issue. They also pointed out that, under WTO rules, IP rights apply at the shipment’s departure and destination locations only, and so represent a violation of TRIPS Agreements.
Meanwhile, the EU, according to Oxfam, is pushing for the rules to be extended globally through free trade agreements and the Anti-Counterfeiting Trade Agreement (ACTA), which is currently being drawn up by 12 nations and the EU. This is due to start its sixth round of negotiations in South Korea in November 2009.
Further reading - An in-depth analysis of the Indian pharmaceutical market, including some background information on intellectual property and TRIPS regulations, is available from Espicom: The Pharmaceutical Market: India (published June 2009)