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EU Trade Deal with India Stalemated by Threat to Affordable Drugs

Julio Godoy

BERLIN, May 18 2011 (IPS) - More than four years after the EU started negotiating a trade agreement with India, the process has been pushed to a stalemate by the EU’s stubborn insistence in maintaining the so-called data exclusivity clause, despite fierce opposition by Indian government negotiators and Indian and EU non- governmental organisations (NGOs).

The EU and the Indian government started negotiating a trade agreement in Apr. 2007. Already at the beginning of the process it became clear that the EU demand that India accepts a so-called data exclusivity (DE) clause in the agreement would present a significant obstacle.

Today, four years later, the clause continues to deadlock the agreement.

Data exclusivity (DE) would forbid the Indian pharmaceutical industry to use available formulae of already patented products, especially medicines, to manufacture generic, low-cost copies and make them available to patients in developing countries.

“Data exclusivity is a backdoor way for multinational pharmaceutical companies to establish monopolies and charge high prices, even when their drug has been found not to deserve a patent or the patent has expired. DE would apply to all drugs,” Leena Menghaney, manager of Médecins sans Frontières’ campaign for access to essential medicines, told IPS.

Médecins Sans Frontières (MSF) is an international, independent, medical humanitarian organisation that delivers emergency aid to people affected by armed conflict, epidemics, healthcare exclusion and natural or human-made disasters.

Menghaney recalls that, “India has been called the ‘pharmacy of the developing world’.”

For instance, over 80 percent of the medicines used by MSF to treat 170,000 people living with HIV and AIDS come from India. International donors rely on Indian generics in similar proportions. Many poor African states depend on generics for 90 percent of their healthcare needs.

Such generic medicines are essential to combating endemic diseases such as HIV and AIDS, tuberculosis and malaria in Africa and other poor regions.

The DE clause in the FTA currently under negotiations would mean Indian generic pharmaceutical companies would no longer be able to supply affordable medicines to people in developing regions, states Menghaney.

The nongovernmental Corporate Europe Observatory (CEO) accuses the European Commission (EC), the EU governing body, of maintaining the DE clause in the FTA out of complicity with the European pharmaceutical industry.

In Feb. 2010, the CEO brought charges against the EC of “withholding documents related to the EU’s trade talks with India” at the EU General Court. The case is still ongoing.

The CEO, a watchdog group specialised in revealing the influence that European industries exert over the EU’s investment and trade relations with the developing world, accuses the EC “of discriminating in favour of corporate lobby groups and of violating the EU’s transparency rules”.

“Our case concerns numerous EC documents including meeting reports, e-mails and a letter which the EC’s trade directorate sent to European industry associations, including BusinessEurope and the Confederation of the Food and Drink Industries of Europe,” Pia Eberhardt, a researcher for the CEO, told IPS.

Eberhardt notes that, while all these lobby groups received full versions of the documents, the EC only released censored versions to civil society groups such as the CEO, arguing that full disclosure would “undermine” the EU’s international relations.

After numerous deadline extensions in responding to the CEO’s demands, the EC made public a list with 170 documents related to the negotiations, including meeting reports, e-mails and letters.

“Out of these papers, 50 documents were only partially released and more than 30 documents were withheld in their entirety, including e-mail exchanges and reports about meetings with European pharmaceutical companies Sanofi-Aventis, Eli Lili and GlaxoSmithKline and the pharmaceutical lobby group EFPIA,” Eberhardt points out.

EFPIA stands for the European Federation of the Pharmaceutical Industries and Associations.

The CEO claims that all these groups were involved in lobbying the EC to tighten intellectual property rights through the use of a data exclusivity clause in the EU-India deal.

Madi Sharma, a member of the European Economic and Social Committee (EESC), describes the negotiations with India as “non-transparent”. The EESC is a consultative body of the EU set up to advise its institutions and officially considered a “bridge between the EU and organised civil society”.

In April, Sharma, EESC’s lead person on a report scrutinising the FTA process, presented her “preliminary considerations” to the press in Brussels. She called for the suspension of the talks until studies are carried out to “assess the likely economic and social risks of the (trade agreement) for Indian society”.

Meanwhile, the Indian government continues to oppose the DE clause. In March, Indian commerce and industry minister Shri Anand Sharma again rejected DE, arguing that it is “well beyond” international trade rule obligations.

He confirmed claims that “the grant of data exclusivity”, as he put it, would have considerable impact in delaying the market entry of cheaper generic drugs.

One week later, on Apr. 7, EU trade commissioner Karel de Gucht said in a statement before the European Parliament that, “it is the Commission’s view that protection of test data can be reconciled with ensuring access to medicines, including through instruments such as compulsory licences or exceptions for public health needs”.

The negotiations are now in their 10th round after the last one failed in March due to the impasse caused by the dispute over DE. According to the official schedule, an EU-India summit is planned for Dec. 10 in Brussels.