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Washington shakes an IPR fist at India

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As we had expected in 2013 December, the mutual back-slapping over the WTO ‘deal’ between Indian and the USA evaporated very quickly indeed in the face of American business aggressiveness. For the US industry, business and trade associations and lobbies, ‘partner’ means vassal, ‘deal’ means binding obligation, ‘priority’ and ‘sanction’ become weapons (which hurt the poor and vulnerable the most), and ‘trade’ itself means subservience.

And this is why this week, the last of 2014 February, the National Association of Manufacturers in the USA – which represents some 50 American business groups – asked the US Trade Representative to designate India a Priority Foreign Country in its 2014 report. “This designation appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions,” NAM said in a letter to US Trade Representative Michael Froman.

In its official foreign policy and business pronouncements on India, the government of the USA, its representatives and its agents adopt a tone reminiscent of the 1950s, when American foreign policy and its agricultural scientists joined forces to bulldoze a green revolution in India. Here and now too, the USA likes to hear itself make statements such as “the promise of the 21st Century depends squarely on a robust US-India commercial and strategic partnership” and “central to this partnership will be the co-development and sharing of our best technologies, as well as free-movement between our economies of our best minds and thinkers”.

But the US doesn’t do diplomacy. America’s manner and approach has always been, my way … or else. And that is why one of the most powerful factors influencing Indo-American business and trade connections, the US India Business Council, through its seniormost officer (Ron Somers, who had worked for the energy company Cogentrix in Karnataka), called “attention to India’s need to calibrate regulations to protect data, or inspire India’s future legislature to adjust its Patent Act to align more wholly with international norms particularly regarding incremental innovation”. The USIBC also bluntly said: “Everyone agrees that India needs to spend more on its healthcare system” and that “evolving ecosystems that reward and protect Intellectual Property will be crucial”.

These disagreements between India and the USA have surfaced anew because the USTR is holding public hearings for its annual report, scheduled to be issued in April. This report will be on countries that the US government thinks are “denying protection of IP rights or fair market access to US firms”. The USTR has said that “India is widely perceived in Washington as a serial trade offender, with US firms unhappy about imports of everything from shrimp to steel pipes they say threaten jobs, as well as a lack of fair access to the Indian market for its goods”.

This is among the most signal, and deliberate, failures of the two UPA terms of government – that its reckless and dangerous chasing of foreign direct investment and its reckless and dangerous opening of domains previously in the public sector to private interests have left Bharat and India in such a crippled state that we as a country tolerate such an insult. There is not the slightest hint of fairness in America’s bullying ways, for it wants nothing less than the capitulation of India’s pharmaceuticals industry, and it wants the handing over of insurance – from life insurance to automotive to weather – to its own freebooting companies whose practices have assisted the plunge of a sixth of America’s population into poverty over the last decade.

What may happen now? There are press reports that India may take the USA to face the WTO’s dispute settlement mechanism if included by the USTR in the ‘Priority Foreign Country’ list for intellectual property rights. American industry and trade lobbies are putting pressure on their government to include India under this list. Thus far, the position held within the central government is that the demand (from the US companies) is “completely wrong” as India’s intellectual property rights are compliant with global laws, including that of the World Trade Organisation (WTO).

It is concerning pharma that the American MNCs are most vociferous. US pharma companies had objected to India’s move to issue a compulsory license in 2012 to Hyderabad-based Natco Pharma to manufacture and sell cancer-treatment drug ‘Nexavar’ at a price over 30 times lower than charged by patent-holder Bayer Corporation.

A delegation from the US International Trade Commission (USITC), described as a quasi-judicial agency, has arrived intending to probe the impact India’s policies on trade and investment have on the American economy (the intention is to supply the USTR with ammunition and to prepare for a WTO dispute confrontation; the Americans involved perhaps cannot see or appreciate the irony of the USIBC also praising India for investing in the USA and creating jobs there).

The USITC has raised the Natco matter, and has also raised the rejection of patent to Bristol-Myers Squibb’s Sprycel and Novartis’ Gleevec. It has stated that Indian IPR laws are not Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant under the WTO. The response of the government of India has been to ask all its officials to stay away from any interaction with the USITC delegation.

But we have stood firm till here. Swiss pharmaceuticals manufacturer Novartis AG had lost a legal battle for getting its blood cancer drug Gleevec patented in India and to restrain Indian companies from manufacturing generic drugs. The Supreme Court had rejected the multinational company’s plea last year in a judgement that was loudly and widely hailed in all countries of the South. This came as a blow to the US-EU pharma MNCs who see the very much larger populations of the South as new markets. Hence the threatening fist-waving by the US government.

The complaint by American companies that India refuses to implement laws to provide data protection and to provide patents for bio-pharmaceutical companies is framed in terms of being against the interest of Americans in terms of jobs and ‘fair’ competition in the global marketplace. To support such nonsense, the US Chamber of Commerce’s Global IP Centers issues what it calls an International Intellectual Property Index, which compares the IP laws and implementation of those laws of 25 countries. In the 2014 Index, India received the lowest overall score, with a score of 0 for ‘Membership and Ratification of International Treaties’ and 0.25 for ‘Trade Secrets and Market Access’.

India’s policy on generic drugs has so far refused to accept ‘evergreening’, a scheme used by pharmaceutical companies to continue having a patent over a drug – even after its patent has expired – by modifying it slightly. India’s decision to grant compulsory licenses (within Indian and WTO rules) to anti-cancer drugs by Novartis and Bayer has infuriated Big Pharma in the US. To retaliate, the USA banned Ranbaxy selling medicines from its fourth plant in the USA – so much for being ‘fair’ at home in America; why does Ranbaxy continue to want to do business there?

India’s generic drug policy is guided by the need to provide cheap medicines to a large population that cannot afford even a fraction of the international patent-protected prices of these medicines, as several authoritative civil society responses to the matter have competently pointed out. This is the practice the judiciary has supported and this is the practice that must not change under any circumstance and regardless of the threats and blandishments by Froman and his shylockian collaborators.

Asia takes the research and development lead

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Ten Asian countries, including some developing countries in South-East Asia, have, as a bloc, caught up with the global leader in research and development (R&D) investment, the United States, a report by Scidev.net has said.

The report quoted is the National Science Board’s ‘Science and Engineering Indicators 2012′ which is a broad base of quantitative information on the U.S. and International science and engineering enterprise. The National Science Board (NSB) is the policymaking body for the USA’s National Science Foundation (NSF).

The NSB report has said that total science spend of China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand, and Vietnam rose steadily between 1999 and 2009 to reach 32 per cent of the global share of spending on science, compared with 31 per cent in the US.

“This information clearly shows we must re-examine long-held assumptions about the global dominance of the American science and technology enterprise,” said NSF Director Subra Suresh of the findings in the ‘Science and Engineering Indicators 2012′. “And we must take seriously new strategies for education, workforce development and innovation in order for the United States to retain its international leadership position,” he said.

Well over a year ago (2010 November), the UNESCO Science Report 2010 had as its primary message stated that Europe, Japan and the USA (the Triad) may still dominate research and development (R&D) but they are increasingly being challenged by the emerging economies and above all by China.

The report depicted an increasingly competitive environment, one in which the flow of information, knowledge, personnel and investment has become a two-way traffic. Both China and India, for instance, are using their newfound economic might to invest in high-tech companies in Europe and elsewhere to acquire technological expertise overnight.

The USA's National Science Foundation (NSF) launched a number of new initiatives designed to better position the United States in global Science and engineering. Photo: National Science Board / Richard Lerner

Other large emerging economies are also spending more on research and development than before, among them Brazil, Mexico, South Africa and Turkey. If more countries are participating in science, the UNESCO Science Report 2010 saw a shift in global influence, with China a hair’s breadth away from counting more researchers than either the USA or the European Union, for instance, and now publishes more scientific articles than Japan.

A “major trend has been the rapid expansion of R&D performance in the regions of East/Southeast Asia and South Asia,” according to the biennial report ‘Science and Engineering Indicators 2012′ produced by the National Science Board, the policy-making body of the US National Science Foundation, which drew upon a variety of national and international statistics. The report also mentions that the share of R&D expenditure spent by US multinationals in Asia-Pacific has increased.

According to the new Indicators 2012, the largest global S&T gains occurred in the so-called ‘Asia-10′ – China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand – as those countries integrate S&T into economic growth. Between 1999 and 2009, for example, the U.S. share of global research and development (R&D) dropped from 38 percent to 31 percent, whereas it grew from 24 percent to 35 percent in the Asia region during the same time. In China alone, R&D growth increased a stunning 28 percent in a single year (2008-2009), propelling it past Japan and into second place behind the United States.

“Asia’s rapid ascent as a major world science and technology (S&T) centre is chiefly driven by developments in China,” says the report. “But several other Asian economies (the Asia-8 [India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand]) have also played a role. All are intent on boosting quality of, and access to, higher education and developing world-class research and S&T infrastructures. The Asia-8 functions like a loosely structured supplier zone for China’s high-technology manufacturing export industries. This supplier zone increasingly appears to include Japan. Japan, a preeminent S&T nation, is continuing to lose ground relative to China and the Asia-8 in high-technology manufacturing and trade,” the report says.

International R&D highlights
(1) The top three R&D-performing countries: United States, China – now the second largest R&D performer – and Japan represented just over half of the estimated $1.28 trillion in global R&D in 2009. The United States, the largest single R&D-performing country, accounted for about 31% of the 2009 global total, down from 38% in 1999.

(2) Asian countries – including China, India, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand – represented 24% of the global R&D total in 1999 but accounted for 32% in 2009, including China (12%) and Japan (11%). The pace of real growth over the past 10 years in China’s overall R&D remains exceptionally high at about 20% annually.

(3) The European Union accounted for 23% total global R&D in 2009, down from 27% in 1999. Wealthy economies generally devote larger shares of their GDP to R&D than do less developed economies. The U.S. R&D/GDP ratio (or R&D intensity) was about 2.9% in 2009 and has fluctuated between 2.6% and 2.8% during the past 10 years, largely reflecting changes in business R&D spending. In 2009, the United States ranked eighth in R&D intensity – surpassed by Israel, Sweden, Finland, Japan, South Korea, Switzerland, and Taiwan – all of which perform far less R&D annually than the United States.

(4) Among the top European R&D-performing countries, Germany reported a 2.8% R&D/GDP ratio in 2008; France, 2.2%; and the United Kingdom, 1.9%. The Japanese and South Korean R&D/GDP ratios were among the highest in the world in 2008, each at about 3.3%. China’s ratio remains relatively low, at 1.7%, but has more than doubled from 0.8% in 1999.

“India’s high gross domestic product (GDP) growth continues to contrast with a fledgling overall S&T performance.” The figures show that China, while still a long way behind the United States, is now the second largest R&D performer globally, contributing 12 per cent of the global research spend. It has overtaken Japan, which contributed 11 per cent  in 2009. The proportion of GDP that China devotes to science funding has doubled since 1999 to 1.7 per cent and China’s pace of real growth in R&D expenditure “remains exceptionally high at about 20 per cent annually,” the report says. Overall, world expenditures on R&D are estimated to have exceeded US$1.25 trillion in 2009, up from US$641 billion a decade earlier.

“Governments in many parts of the developing world, viewing science and technology as integral to economic growth and development, have set out to build more knowledge-intensive economies,” it says. “They have taken steps to open their markets to trade and foreign investment, develop their S&T infrastructures, stimulate industrial R&D, expand their higher education systems, and build indigenous R&D capabilities. Over time, global S&T capabilities have grown, nowhere more so than in Asia.”

The scientific landscape is not conveniently demarcated by blocs, whether formed by states or by private sector interests. As UNESCO has said, even countries with a lesser scientific capacity are finding that they can acquire, adopt and sometimes even transform existing technology and thereby leapfrog over certain costly investments, such as infrastructure like land lines for telephones. Technological progress is allowing these countries to produce more knowledge and participate more actively than before in international networks and research partnerships with countries in both North and South. This trend is fostering a democratization of science worldwide. In turn, science diplomacy is becoming a key instrument of peace-building and sustainable development in international relations.

Universal health coverage in India, economic growth, and social justice

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The Lancet, 08-14 January 2011 issue, India health coverageThe Lancet has published, in its 08-14 January 2011 issue, a series of papers on India’s path to full health coverage. Taken together, the papers and comments show that a failing health system is perhaps India’s greatest predicament. The papers (pay only, the comments are free to read) reveal the full extent of opportunities and difficulties in Indian healthcare, by examining infectious and chronic diseases, availability of treatments and doctors, and the infrastructure to bring about universal health care by 2020. This Lancet issue with the India health coverage special brings together a rapidly growing body of evidence to show that Indian health is in grave crisis. As the country with the largest democracy in the world, India is well positioned to put health high on the political agenda.

Introduction to the Lancet Series – Indian health: the path from crisis to progress – Can India’s vibrant political process and civil society create the public demand for health reform? Do Indian health institutions — the Ministry of Health and Family Welfare and the health professions, for example — have the capacity to lead reform? In India, community identity rivals individual identity in importance. How do community identities shape attitudes and policies towards health? – Richard Horton, Pam Das (The Lancet)

The Lancet, 08-14 January 2011 issue, India health coverageUniversal health care in India: the time is right – India’s record in expanding social opportunities has been uneven. The health and nutritional status of children and women remains poor, and India is routinely ranked among countries performing weakly on overall health performance. But there is good reason for hope. The country has withstood the recent global financial crisis and quickly returned to rapid economic growth. There is a refreshing openness to participation by civil society and to the power of ideas to improve performance and governance. We are enthused by India’s recent commitments to invigorate the public health-care system to address health disparities. – Vikram Patel, A K Shiva Kumar, Vinod K Paul, Krishna D Rao, K Srinath Reddy (London School of Hygiene and Tropical Medicine, London, UK and Sangath Centre, Goa, India; UNICEF India; All India Institute of Medical Sciences; Public Health Foundation of India)

Securing the right to health for all in India – The health status of people transcends the health-care sector, and the social determinants of health, such as food, water, sewerage, and shelter, still elude large numbers of the poorest citizens in India. Inequity in social determinants of health and health care in a market-based system itself becomes a pathogenic factor that drives the engine of deprivation. These inequities are set to increase even further in the near future even as major investments are being projected and planned in the health sector from 0·9% to 3·0% of the gross domestic product. The stunted public health system is hardly geared up to absorb this increased allocation; already state governments are returning allocated money because of the inability to absorb increased allocations. – Binayak Sen (Christian Medical College, Tamil Nadu, India) (The Lancet writes: “One notable absentee from the launch of the Series on Jan 11, 2011 is paediatrician and Comment author Binayak Sen. He remains in prison, an appalling situation discussed in an Editorial in the Jan 8-14 issue of The Lancet.”)

Gender equity and universal health coverage in India – The findings presented on health-care coverage in India emphasise that maternal health concerns, such as fertility and maternal mortality, continue to affect large numbers of women and girls in India. Although these concerns are diminishing, present trends indicate that India is not on target to reach national and Millennium Development Goals. Too many Indian women and girls are unnecessarily affected by gender-based violence and inequities in health-care access and use. – Anita Raj (Department of Social and Behavioral Sciences, Boston University School of Public Health)

The Lancet, 08-14 January 2011 issue, India health coverageIndia: access to affordable drugs and the right to health – Competition from generic companies is the key to affordable drugs. Generic companies in India can therefore produce drugs at prices that are among the lowest in the world. This cost advantage means more than 89% of the adult antiretroviral drugs purchased for donor-funded programmes in the developing world are supplied by companies in India. The European Union and India free-trade agreement seeks to introduce TRIPS-plus and other measures, such as patent term-extensions, data exclusivity, increased border and enforcement measures, and investment protection agreements, all of which would impede generic competition. – Anand Grover, Brian Citro (Lawyers Collective HIV/AIDS Unit, Mumbai)

Good governance in health care: the Karnataka experience – The health sector, with high public interaction and large societal impact affecting almost the entire population, was the second most corrupt sector in India. Bribes related to health care comprised the highest portion of all bribes paid in the state of Karnataka in 2008, at 40%. More than 150,000 estimated households below the poverty line paid bribes for seeking basic health care in 2005 in the state. In 2008, 64% of all bribes paid in the state for basic services was by people living below the poverty line and amounted to INR650 million. – Hanumappa Sudarshan, N S Prashanth (Karuna Trust, Karnataka, India; Institute of Public Health, Bangalore, Karnataka, India)

Research to achieve health care for all in India – Many of the leading causes of disease burden across communicable diseases, non-communicable diseases, and injuries continue to be under-represented in this published research output, indicating that even among the limited papers on public health research, a large proportion do not address public health priority conditions in India. Distinct from published papers, an analysis of public health research reports produced in India also showed that the leading chronic non-communicable diseases and injuries were under-represented between 2001 and 2008. – Lalit Dandona, V M Katoch, Rakhi Dandona (Public Health Foundation of India, New Delhi, India; Institute for Health Metrics and Evaluation, University of Washington; Department of Health Research and Indian Council of Medical Research, Ministry of Health and Family Welfare, Government of India)

The Lancet, 08-14 January 2011 issue, India health coverageUniversal health care in India: missing core determinants – India’s growing economic strength is based on an economic model that has enhanced the very disparities that the call is concerned about. Promotion of medical tourism at the cost of universal primary health care has not been accidental, but the result of a policy that places the market above people’s basic needs. All health-care reforms have to respond to this political dichotomy in the economy of health. Any health-care reforms, including the national health bill and integrated national health system suggested, have to be placed within a national effort to provide food, water, shelter, sanitation, education, and other basic needs. – Ravi Narayan (Centre for Public Health and Equity, Society for Community Health, Awareness, Research and Action, Bangalore, India)

Towards a truly universal Indian health system – The current framework of economic growth is not designed to address the concerns of very large sections of the population, for whom it has directly perpetuated the situation of ill health and inadequate health care. This position is not one of mere semantics, since any sustainable recommendation needs to be set in an honest and robust analysis of the causes of ill health in India. Little mention is made of the severe, persistent, and near ubiquitous poverty that has characterised this era of so-called economic growth, in which 77% of Indians live on less than INR20 a day. – Amit Sengupta, Vandana Prasad (People’s Health Movement-India [Jan Swasthya Abhiyan], Uttar Pradesh, India)

Please see this page on the Lancet series for longer summaries of the comments.

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