India: Government rebuts drug-piracy charge

by Ranjit Devraj

New Delhi, 11 Mar 2001 (IPS) -- Accused of “piracy” by Western transnational drug companies, India is defending its right to make cheaper generic medicines on legal and ethical grounds.

The charges were renewed when an Indian pharmaceutical company recently offered poor countries an anti-AIDS medication at a fraction of its international price, which is said to have shown again the strengths of India’s 31-year-old patent rules.

These recognise only manufacturing processes and not the products themselves. This allows local pharmaceutical companies to use strengths in basic chemistry to produce medicine molecules which are only slightly different from the original.

Western drug majors call this piracy. According to a study released last year by the Pharmaceutical Research Manufacturers of America, the drug industry in the United States loses about $60 million annually on 20 drugs made this way in India.

However, India’s top government health official, Javed Chowdhury, says there is nothing illegal about generic manufacture, at least until the year 2005. That is when India will have to start conforming to the World Trade Organisation (WTO) rules on intellectual property.

“Present laws help millions of poor people in this country to buy and use medicines which could become unaffordable after that date,” says Chowdhury.

India’s patent policies on drugs were put into place in the year 1970 with the aim of making the country self-sufficient in medicines. The laws were backed by strict government control on drug prices.

Though chafing at the regulations, the largely private Indian pharmaceutical industry grew rapidly. According to government figures, India’s drug industry provides direct employment to more than half-a-million people, besides producing the cheapest drugs in the world.

India’s prowess in making generic drugs was dramatically evident earlier this year, when the Mumbai-based Cipla offered to sell poor countries an anti-HIV “drug cocktail” for a fraction of the price charged by the drug transnationals that make this.

With support from Nobel Prize winner, Paris-based doctors’ group Medecins Sans Frontieres (MSF), Cipla is offering a one-year course of the AIDS drugs at $350, against the about $15,000 charged by Western pharmaceutical companies.

The global debate which followed Cipla’s offer saw WTO chief Mike Moore defending the patent system. “Were it not for a patent system that rewards companies for risking millions on research, anti-AIDS drugs would not exist,” Moore wrote in the “International Herald Tribune” newspaper.

The WTO Chief, however, acknowledged that the new world trade rules have made medicines more expensive for the poor.

The rules of the WTO-administered Trade-related Intellectual Property Rights (TRIPs) Agreement require members to protect patents for 20 years. The new rules do impose some conditions and permit certain national restrictions on patent rights to help poor nations, but couched in some ambiguous language..

But Indian public health activists say that the WTO regime could result in many essential drugs being priced out of the reach of ordinary people in the country.

“Pharmaceutical companies may even stop production of drugs which are used to treat diseases that have been wiped out in the West but continue to plague warm tropical countries,” says Mira Shiva of the Voluntary Health Association of India.

However, companies like Cipla have said they will continue developing cheaper generic drugs until the WTO deadline year 2005.

Indian drug companies are confident that by that time, pharmaceutical producers in the country would be ready to take on the drug transnationals. Indian drug companies, like Dr. Reddy’s Laboratories, have already made cheaper versions of formulations to treat diabetes and related illnesses.

Meanwhile, Cipla’s offer on anti-HIV drugs has already triggered a downward revision in prices.

The US drug maker Merck and Co. announced in the first week of March that it was slashing prices of two AIDS drugs in developing countries.  The company also announced that it would strive not to profit on sales of these medications. According to a Merck statement, this was partly a response to increasing competitive pressure from Indian generic drug manufacturers.