India said to mull taking EU to WTO over threat to drug exports
New Delhi: India may challenge the European Union over stricter trademark rules that could stop exports of some generic drugs via the bloc to markets such as Latin America, people with knowledge of the matter said.
The nation is considering taking the EU to the World Trade Organization if talks over the regulations fail, the people said, asking not to be identified as the plan isn’t public. The rules from this month allow owners of EU trademarks to prevent the transshipment of goods, including medicines, that use those logos or designs without authorization.
“Drug shipments going to Latin America, some African markets and North America will be impacted,” said D. G. Shah, secretary general of the Indian Pharmaceutical Alliance in Mumbai. “Anything can be construed as trademark violation — packaging, sign, logo, shape or colour. The industry is concerned anything even remotely similar may attract the new regulation.”
Companies such as Sun Pharmaceutical Industries Ltd., Dr. Reddy’s Laboratories Ltd. and Lupin Ltd. transformed India into one of the biggest manufacturers of generic medicines, with exports of about $15 billion in fiscal-year 2015. That’s stoked tension with global pharmaceutical majors seeking to maximize returns from drugs they developed, patented and marketed.
India wants to remove the risk to shipments transiting through the 28-member EU, even though the bloc signalled exports won’t be affected, the officials said. They didn’t say how long the discussions with the EU might last.
“The EU has already responded extensively and in full detail to India’s questions on EU trademark legislation in the WTO trade policy review,” the EU authorities said in an e-mailed statement.
India’s commerce ministry declined to comment immediately.
The exact impact of the regulation remains unclear, said Surya Patra, an analyst at PhillipCapital India Pvt. in Mumbai. Companies could turn to hubs outside the EU for transporting medicines, Patra said.
India’s 63-member S&P BSE Healthcare index has dropped about 6% this year, partly in the wake of increased scrutiny of quality standards at some companies by the US Food and Drug Administration.
The trade spat follows a dispute last year over an EU ban on some medicines tested by Hyderabad-based GVK Biosciences Pvt., and is flaring just as India struggles to snap a record drop in exports that spans more than a year. Bloomberg