Donald Trump is not known for finesse when he wants what he wants. He wanted HCQS (hydroxychloroquine sulfate), a drug even the World Health Organization is not sure works for either preventing or curing Covid-19. But Trump, overriding the advice of his own experts, has advocated use of the drug as a panacea for Covid-19 with the enthusiasm of a pharma salesman.

Did he threaten retaliation, if India disallowed export of the drug?

We now know that the Government of India had already taken the decision to let Indian companies export the drug before he used the R word in his press conference. In any case, it was a conclusion foregone that India will allow export of HCQS to America, because of diplomatic and humanitarian niceties, because we have enough stocks and ability to make more if required, and it has already been paid for, etc.

The question is, how do we leverage this strength of India as a generic manufacturing hub of the world? How do we negotiate for something in return? After all, diplomacy and trade are all about quid pro quo .

Bee in the bonnet

For years, India’s price regulation of drugs and, of late, stents, has been a bee in the bonnet for America’s pharma industry. India’s DPCO 2013 has been portrayed in annual reports of the Office of the United States Trade Representative (USTR) as the villain of the piece — and therefore a trade “barrier” to free market ethos.

The USTR’s other villain is India’s alleged failure to provide “adequate and effective” protection to Intellectual Property Rights (IPR) of American companies. A major part of this irritant for the USTR is Section 3 (d) of India’s Patents Act that was introduced in 2005 to discourage patents being given for frivolous improvements/claims and to discourage evergreening — by which the patent holder can claim monopoly beyond the mandated period of 20 years.

Both allegations are wrong. India’s DPCO 2013 affects less than 15 per cent of the annual domestic pharma market of ₹1.4 trillion. And for that reason should not be a worry for multinationals.

Modifying Patents Law

And on IPR, India has exercised the compulsory licence (CL) provision of the Patents Act just once — for Bayer’s sorafenib tosylate, a drug used in kidney and liver cancers. Foreign pharma companies have tried to circumvent the risk of CL being awarded again by entering into ‘voluntary’ licence agreements with Indian pharma companies — agreements that tell the Indian partner at what price to sell the patented drug and where and who to sell. This needs to be stopped.

Section 3d of the Patents Act, a provision that was supposed to raise the bar on what is patentable and what is not an invention, has been poorly implemented. Patents awarded by the Indian Patents Office (IPO) have contravened the anti-evergreening provisions of Sections 3d and 3e, among others. According to the study, by Feroze Ali, et al, of a cohort of 2,293 pharmaceutical patents granted between 2009 and 2016: “The majority (72 per cent) of granted patents for pharmaceuticals are secondary patents, granted for marginal improvements over previously known drugs for which primary patents exist.” That is, the IPO is operating “at an error rate as high as 72%.” (Source: http://accessibsa.org/media/2018/04/Pharmaceutical-Patent-Grants-in-India.pdf)

If anything, the Government should seriously consider modifying the Patents Act to prohibit secondary patents to be issued to any drug and direct the IPO for stricter implementation of Sections 3 (d) and (e) of the Patents Act, among other provisions.

The USTR needs to do its homework and stop disambiguation at the behest of American companies in India. We don’t need this.

What India should do now and hereafter

For starters, our Prime Minister can ask Trump to tone down the rhetoric of the USTR, to the extent Trump has control over it. Modi needs to explain to the US Government the reasons for price regulation in India. He may even add the US Government ought to seriously look into the pricing of medicines by big pharma in America. The American people may actually benefit by a similar legislation like DPCO 2013. It would prevent runaway horrors like Turing Pharmaceuticals’ Shkreli increasing the price of pyrimethamine (‘Daraprim’) — a former anti-malarial and now used as an antiparasitic drug — by 56 times (from $13.5 to $750 per tablet). For the record, pyrimethamine in combination with a sulfa drug sells in India at less than ₹3 per tablet. Shkreli is now doing time in jail for securities fraud. Overpricing of a drug is also a fraud and a crime on patients.

To ensure affordable pricing, the current Government can show some daring and announce that all life-saving drugs under patent will be subject to compulsory licence for Government use, including any and all new medicines (like remdesivir) — and vaccines — for Covid-19.

Sensing that the post-Covid-19 world would be a drastically different one, India can push the envelope further. India ought to ask for a total review of the one-sided terms of trade under WTO/TRIPS and of Intellectual Property Rights of especially medicines —which, as Jagdish Bhagwati, the leading scholar advocate of free trade quipped, has nothing intellectual about it nor is it a property or a right. Such a move will have the support of most of the world, even China.

The author is associated with All-India Drug Action Network (AIDAN) and Low Cost Standard Therapeutics - LOCOST

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