NEW DELHI – India’s attempts to enter a Regional Comprehensive Economic Partnership (RCEP) deal among 16 countries in Asia are likely to have a significant impact on the biopharma industry, but analysts are divided as to what that will be.
The RCEP negotiations have been controversial in India, particularly the portions that address intellectual property rights and specifically drug patents. Patients groups and advocates, including the international medical charity Medicins Sans Frontieres (MSF), have criticized parts of the deal saying it would keep more drugs out of the hands of patients.
But others observe that India could benefit from the RCEP. Gopakumar Nair, CEO of a Mumbai-based IPR consultancy Gopakumar Nair Associates, told BioWorld Today that India already has trade agreements with the Association of Southeast Asian Nations (ASEAN) and the Comprehensive Economic Partnership Agreement (CEPA) with South Korea, which are present in RCEP, too.
Nair said India needs to shed its fear of global trade agreements, and the RCEP could provide the country with much-needed confidence in trade talks to drive both its commitment to affordable medicines and yet scale greater heights in biotech research and trade.
Ganeshan Wignaraja, director of research, Asian Development Bank Institute, Tokyo, said the Indian biopharma industry could benefit in the net balance from the RCEP. On the upside, it could spur domestic firms to upgrade their technology and hire more people; it could drive in more foreign investments in the sector; and export-oriented firms could see more business opportunities. On the downside, uncompetitive companies could lose out.
A sticking point is IP provisions suggested by Japan, which include patent term extensions, data exclusivity and lowering patentability criteria, which public health experts argue, go beyond even what TRIPS stipulates.
The issue is particularly sensitive in India, which has been at the global forefront in reducing drug prices.
Speaking in September ahead of the RCEP talks and more recently and during a conference on regional trade agreements organized by the Confederation of Indian Industry (CII), Rajeev Kher, a secretary in India’s Ministry of Commerce, said the country needs to upgrade its regional trade agreements to reflect the changing ecosystem of regional and global value chains. Kher said the RCEP was a “great opportunity” for India and it complemented the emerging new architecture of global trade deals.
Negotiations for the RCEP started in May 2013 between the 10 countries of the ASEAN, plus Australia, China, India, Japan, New Zealand and South Korea.
The sixth round of talks began on Dec. 3 and the agenda included the third meeting of the RCEP working group on intellectual property rights (WGIP). The talks, however, concluded without any concrete outcome and are expected to continue through 2015 with an agreement to be reached in 2016 or 2017.
“India’s production of affordable medicines is a vital lifeline for MSF’s medical humanitarian operations and millions of people accessing treatment in developing countries. MSF alone purchases more than 80 percent of the HIV medicines used in its operations around the world from producers in India. Any inclusion of harmful IP provisions in trade agreements with India would threaten India’s role as the pharmacy for developing countries,” said Leena Menghaney, regional head- South Asia, MSF Access Campaign.
In 2011, the previous Indian government rejected some of the more stringent IP provisions in a free trade agreement (FTA) being negotiated between India and the EU, following similar protests by networks of HIV-infected patients.
Then-Minister for Commerce and Industry Anand Sharma said, “While data protection is something which must be respected, data exclusivity is well beyond the provisions of Article 39.3 of TRIPS (Trade Related Intellectual Property Rights) agreement. India does not provide data exclusivity for pharmaceuticals and agro-chemicals which is in the paramount interest of our generic pharmaceutical industry as grant of data exclusivity would have considerable impact in delaying the entry into the market of cheaper generic drugs.”
It is not yet clear what stand the new Indian government led by Prime Minister Narendra Modi, considered to be pro-industry, will take. Modi’s home state Gujarat has a significant pharmaceutical industry.
The stringent IPR suggestions drew the ire of patients in India, particularly HIV patients, who took to the streets on Dec. 3 to protest against the RCEP talks. They described the proposals as “damaging” and “harmful” and claimed that they could severely restrict access to affordable medicines for people in developing countries.
U.S. PUSHING FOR HARMFUL IP PROVISIONS?
“Several of the countries negotiating the RCEP are currently also negotiating the Trans-Pacific Partnership (TPP) agreement with the U.S. The TPP trade deal is currently being negotiated between the U.S. and 11 other Pacific Rim nations: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam; and its details are not yet in public domain,” said the MSF. “Leaked drafts of the IP chapter show that the U.S. is pushing for harmful provisions that go beyond WTO trade rules, which are aimed at restricting the ability of governments to regulate in the interest of the public health and delay the availability of low-cost generic versions of medicines.”
Japan a key participant in the TPP agreement negotiations is now closely allying itself with the U.S. in pushing “extremely stringent IP standards” that undermine and delay access to affordable generic medicines, MSF charges.
The leaked text of a proposal put forth by the government of Japan to the Working Group on IP, called the Elements Paper, includes the various provisions that Japan is pushing for. The provisions would “serve to extend monopoly protection beyond what is required by international agreements and to create new kinds of monopolies, even after patent-based monopolies have expired or where they never existed,” the MSF stated.
But Wignaraja dispelled the fears, pointing out that the main dialogue partners are ASEAN plus the free trade agreement partners China, Japan, Korea, Australia and New Zealand. “The U.S. as such is a part of the current RCEP negotiations.”