Brave new world: On the India-European Free Trade Association agreement and IPR

India must invest in fundamental research to be able to develop reliable drugs 

February 17, 2024 12:20 am | Updated 12:50 pm IST

Expectations are high that a free trade agreement involving India and the European Free Trade Association (EFTA) is close to fruition. However, a bone of contention relates to intellectual property rights, and has persisted as an issue since 2008. Switzerland and Norway, which are prominent members of EFTA, host several of the pharmaceutical and biotechnology companies that are responsible for several of the drugs and therapeutics that underpin health care globally. The nature of the pharma industry — it costs much to discover a useful effective drug and relatively little to make generic copies of it — with demand that is far disproportionate to affordability, means that there is a constant tussle between the inventors and the generic-drug companies. Patenting, or an exclusive monopoly for a fixed number of years to originators and a reciprocal right by governments to issue directions for ‘compulsory licensing,’ thereby selectively breaking such monopolies in the interest of public health, has brokered the peace and sustained the global pharma industry for decades. But new legal innovations such as data exclusivity continue to inveigle themselves in free trade negotiations. Under this provision, all the clinical-trial data that concerns the safety and efficacy of a drug generated by the originator firm becomes proprietary and out of bounds for a minimum period of six years. Permission to make a generic is possible if a country’s regulator can rely on supplied clinical trial data to approve a drug. For this, generic makers usually rely on the originator’s published data.

The principle of data exclusivity is present among European countries as well as in agreements involving many developing countries. Were it to take effect in India, it could significantly hinder India’s drug industry which is also a major exporter of affordable drugs. Indian officials have rejected data exclusivity as a point of negotiations in the FTA, though leaked drafts of the agreement suggest that it is alive. However, India’s rise up the drug manufacturing chain in the last few decades means that it must invest in an ecosystem that can conduct ethical drug trials and make new molecules and therapeutics from scratch. The paradigm that drug development will always be expensive and confined to the West need not be permanent, as was seen in the development of several novel technology approaches to developing vaccines in India during the COVID-19 pandemic. But as preparation, India must invest substantially more in fundamental research to incubate the local drug industry into the future.

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