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Posts Tagged ‘pharmaceutical

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.

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Formation of the ‘Big 6’ seed-biotech-crop companies

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Over the past 15 years, the world seed industry has consolidated through mergers and acquisitions. This graphic, extracted from a 2011 December USDA report, shows how the ‘Big 6’ got to the positions they now occupy (I have added colour to make it easier to distinguish each dominant conglomerate’s consolidation history).

Formation of the 'Big 6' seed-biotech-crop companies. Graphic from: Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide / ERR-130. Economic Research Service / U.S. Department of Agriculture (USDA) (Report Number 130, December 2011) (click for the full size png image, 652kb).

Over the past 15 years, the world seed industry has consolidated through mergers and acquisitions. This graphic, extracted from a 2011 December USDA report, shows how the ‘Big 6’ got to the positions they now occupy (I have added colour to make it easier to distinguish each dominant conglomerate’s consolidation history).

An excerpt from the USDA report has explained some of the features of changes to the seed industry which can be summarised as follows:

1. Among the largest firms in terms of total product sales, the close relationships between seed and agricultural chemicals industries have continued. This applies to the Big 6 firms in particular. These relationships may result partially from complementarity of product lines such as herbicide-tolerant seeds and chemical herbicides, or possibly from economies of scope in marketing as well. Chemical companies also realized GM crops with pest resistance traits would compete with the crop protection chemicals, which helped drive these companies’ interest first in biotechnology and eventually in seed, thus changing their business models to meet farmer demand for crop pest management as technological opportunities changed.

2. On the other hand, the “life science industry” model suggested a decade ago has not become the dominant paradigm. This model stemmed from the likelihood that technologies underlying pharmaceutical discovery were the same as those underlying gene discovery for seeds. Differences in business models and types of customer, however, prevented firms from combining both pharmaceuticals and agricultural biotechnology. Of the current Big 6 companies, only one — Bayer — has pharmaceuticals as its primary product line.

Detail from the graphic, 'Formation of the 'Big 6' seed-biotech-crop companies'

Even when Bayer expanded into the seed/biotechnology industry in 2002 with its acquisition of Aventis Crop Science, Aventis pharmaceuticals eventually became a component of Sanofi-Aventis pharmaceuticals, not Bayer. Monsanto, which entered pharmaceuticals in the mid-1980s with its acquisition of Searle, was briefly held by Pharmacia before the agricultural enterprise was spun off as the “new Monsanto”; Pharmacia retained the pharmaceutical business segments. When Novartis’s chemical and seed businesses were merged with Zeneca’s agricultural chemical business in 2000 to form Syngenta, the pharmaceutical portion of Novartis remained intact as a separate large pharmaceutical company. BASF and DuPont ended their relatively smaller pharmaceutical investments after 2000 and 2001, respectively, and Dow had already sold its pharmaceutical subsidiary Marion Merrell Dow to Hoechst in 1996.

3. Agricultural chemicals have been an important part of product sales for all the Big 6 companies. However, positions in markets for non-agricultural chemicals have not remained constant, with some companies shedding these nonagricultural products. Monsanto divested this portion of its business to Solutia in 1997. When Ciba-Geigy and Sandoz merged to form Novartis in 1996, nonagricultural chemicals were spun off to Ciba Specialty Chemicals, which eventually was acquired by BASF. In response to antitrust considerations, Bayer sold selected insecticides and fungicides to BASF in 2003. DuPont sold its polymers business in the early 2000s.

How the EU Commission backed business interests in the EU-India trade talks

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Legal action has been taken against the EU Commission, suing the EU’s executive in the EU General Court for withholding documents related to the EU’s free trade talks with India. The Commission is accused by Corporate Europe Observatory of discriminating in favour of corporate lobby groups and of violating the EU’s transparency rules.

Former EU Trade Commissioner Peter Mandelson (centre) with former Indian Commerce and Industry Minister, Kamal Nath (right), former CII President Sunil Bharti Mittal (left) and BusinessEurope’s Philippe de Buck

Former EU Trade Commissioner Peter Mandelson (centre) with former Indian Commerce and Industry Minister, Kamal Nath (right), former CII President Sunil Bharti Mittal (left) and BusinessEurope’s Philippe de Buck

The case concerns 17 documents including meeting reports, emails and a letter, which the Commission’s trade department (DG Trade) sent to industry associations including BusinessEurope and the Confederation of the European Food and Drink Industry (CIAA). While these corporate lobby groups received full versions of the documents, the Commission only released censored versions to Corporate Europe Observatory, arguing that full disclosure would undermine the EU’s international relations. The censored sections relate to allegedly sensitive information about priorities and strategies in the ongoing trade talks with India including issues such as tariff cuts, services, investment and government procurement liberalisation and health standards.

You can read background documents on the matter and on the legal action here.
You can read Corporate Europe Observatory’s assessment of the EU-India FTA and its implications here.

(Corporate Europe Observatory (CEO) is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making. This corporate capture of EU decision-making leads to policies that exacerbate social injustice and accelerate environmental destruction across the world.)

What is at stake is whether the Commission can continue its practice of granting big business privileged access to its trade policy-making process by sharing information that is withheld from the public. This practice not only hampers well-informed and meaningful public participation in EU trade policy-making, it also leads to a trade policy that, while catering for big business needs, is harmful to people and the environment in the EU and the world.

The efforts to gain access to the information began on 5 June 2009. Corporate Europe Observatory filed an access to documents request for correspondence and reports from meetings between the Commission and corporate lobby groups, in which the ongoing free trade talks with India had been discussed. The purpose of the request was to monitor whether the Commission was shaping its negotiating position based on the public interest or only on the demands of large corporations. Previous research had shown that DG Trade had disregarded the concerns of small enterprises, trade unions and NGOs when it drew up the EU’s 2006 Global Europe trade strategy.

So, there was every reason to monitor the involvement of big business in the trade negotiations with India. After multiple deadline extensions and a complaint to the Commission’s General Secretary, DG Trade finally responded on 29 April 2010 – nine months after the statutory deadline. The response contained a list of more than 170 documents from 2008 and 2009 identified by DG Trade: meeting reports, emails and letters. Out of these, 50 documents were only partially released. More than 30 documents were withheld in their entirety, including email exchanges and reports about meetings with pharmaceutical companies Sanofi-Aventis, Eli Lili and GlaxoSmithKline, as well as pharma lobby group EFPIA. They were involved in lobbying the Commission for tightened intellectual property rights in the future EU-India deal, which public health groups have slammed as a threat to India’s position as the pharmacy of the global South.

Twelve of the censored documents at the core of the lawsuit are meeting reports from the EU’s Market Access Advisory Committee (MAAC) and its working groups. They operate in the context of the EU’s Market Access Strategy and bring together Commission officials, EU member state representatives and corporate lobbyists who discuss regulatory barriers in key markets, developing joint strategies to get rid of them. Market access in India ranks high on the agenda in the groups dealing with postal and distribution services, cars, tyres, textiles, food safety and animal health measures.

Several of the issues raised by these groups have made it onto the EU’s list of the top priority barriers which prevent access to the Indian market. This means that they have been jointly challenged by the EU Commission in Brussels, its delegation in Delhi and by EU member states: in the free trade talks with India, at the multilateral level in the WTO and in all kinds of ‘dialogues’ with the Indian authorities, sometimes with the support of other trading power-hubs like the US or Japan.