Stands up to White House’s strong-arm tactics against manufacturers of generic equivalent

Over the summer one thing about U.S. President Barack Obama has become clear. His hawkishness in foreign policy affects not only nations like Pakistan and Yemen, which are saddled with U.S. drones carrying out targeted assassinations on their soil. India too is very much a victim of Mr. Obama’s harshest policy campaigns, albeit in a less headline-grabbing area: cancer medication pricing.

In a hearing on Capitol Hill that slipped under the radar of media scrutiny, a top Obama administration official blatantly pressed the case for the deployment of American lobbying power to keep the price of cancer drug Nexavar closer to the $5,000-per-month-mark that it now sells at in India.

In doing so, Deputy Director of the U.S. Patent and Trademark Office (PTO), Teresa Rea, was equally pushing for Congressional approval for the Obama White House’s strong-arm tactics to bully Indian manufacturers of Nexavar’s generic equivalent into giving up their plan to sell their product at a much more affordable $157 per month.

An insightful Huffington Post investigative report on the covert campaign by the PTO argued that during the 70-minute hearing, Ms. Rea “repeatedly castigated India's government for approving the generic drug, calling the move an egregious violation of World Trade Organisation treaties.”

According to reports Ms. Rea said that she was “dismayed and surprised,” by India’s decision and admitted to “personally” engaging “various agencies of the Indian government” in efforts to knock it down.

It is hard to miss the contrast between Mr. Obama’s domestic policies to keep drug prices low via the Supreme-Court-validated Affordable Care Act and his administration’s persistent efforts to protect drug firm revenues even in developing nations such as India, which have a toxic combination of poverty and rampant disease.

A principal stakeholder that would appear to be deriving vast profits under the aegis of the U.S. President’s protection is none other than pharmaceuticals giant Bayer AG. Despite the Germany-based company’s best lobbying efforts the Government of India has refused to bow to U.S. pressure and “continues to offer the generic alternative, which was approved in March after several months of negotiations with [the company],” according to the investigative study.

Following India’s decision not to yield to the clout of the deep-pocketed Bayer, whose earnings touched $3.4 billion last year, Indian pharmaceutical Natco Pharma obtained permission to sell the generic drug and pay a royalty of six per cent on the revenue derived to Bayer.

This arrangement is a widely accepted trade practice called “compulsory licensing,” and is supported by WTO treaties, “an effort to ensure that good health care is not merely a privilege for the rich,” and a process that is ironically used by the U.S. to address domestic drug shortages, the HuffPost report noted.

After her acerbic performance before Congress was criticised on the grounds that compulsory licensing was consistent with the WTO, Ms. Rea in a blog post reluctantly agreed that it “can be permissible under the TRIPS Agreement.”

Yet apparently adamant on blocking India’s efforts to make essential drugs affordable to the vast majority of its poor, she added that the U.S. was “trying to stop the granting of further compulsory licenses.”