No Generic Drug Hold Up in Europe Now, India EU Strike Deal

The European Union and India will miss their target of concluding a free trade agreement by the end of 2010, but have managed to resolve a spat over EU policies that saw Indian generic drugs confiscated in European ports while in transit on their way to other developing countries.

The drug seizures, which had become an irritant in the broader FTA negotiations, took place in 2008 and 2009, when several shipments of generic drugs from India were held for weeks by officials at European ports while en route to Brazil. The medicines in question were not patented in either the source or the destination country, but were patented in Europe. Brazil and India launched a WTO dispute against the EU, claiming that the seizures violated multilateral rules governing goods in transit. Brazil, India, and other developing countries have argued that the EU is confusing legitimate generics with counterfeits, and that the drug seizures could undermine poor countries’ ability to acquire cheaper medicines.

Following an EU-India summit in Brussels on 10 December, officials said that the two sides had resolved the dispute in a manner that would allow Indian generics to transit through European ports without fear of confiscation.

EU officials say that India has not yet formally withdrawn its complaint at the WTO.

As for the FTA, Brussels and New Delhi are now aiming to conclude the deal by the spring of 2011. Rahul Khullar, India’s commerce secretary, said that both sides have planned an intensified work schedule in the months to come, with lead negotiators meeting at least monthly, and ministers to meet in March.

Khullar said that some chapters of the agreement were complete, such as competition, trade facilitation, and dispute settlement. Others needed more work: on goods trade, both sides are preparing revised offers of market access. Services, trade defence instruments, and rules of origin need to be finalised.

Also incomplete are controversial chapters on investment and intellectual property rights. Separate from the dispute over the treatment of generic drugs in transit, public health advocates fear that the prospective EU-India FTA may include intellectual property provisions that will threaten access to medicine for the millions of people in developing countries who rely on low-cost Indian generics to treat conditions such as HIV/AIDS. They say that leaked copies of the draft suggest that the EU is seeking rules on “test data exclusivity” that would require would-be generics manufacturers to run their own expensive, and potentially risky clinical trials, instead of using the data produced by the company that first made the drug. Critics also worry that the EU is seeking to extend the patent protection period for drugs beyond the 20 years provided for under WTO rules. Reduced competition from Indian generics could increase drug costs across the developing world. AIDS patients and advocates organised protests to coincide with the EU-India meet in Brussels, calling for the trade negotiations to safeguard access to medicine.