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Mumbai: The US Trade Representative’s (USTR’s) latest report on intellectual property protection—called Special 301—has sparked an open fight between a section of the global pharmaceutical industry and healthcare groups over India’s intellectual property law.

The USTR report, published on Wednesday, retains India on its ‘priority watch’ list of countries that are alleged violators of US patent laws, but does not name it as a “priority foreign country," a category of serious offenders that could have invited US sanctions.

Instead, because of the ongoing Indian general election, Washington has decided to conduct an out-of-cycle review later this year to evaluate the ongoing engagement between the US and India with a focus on what USTR Michael Froman called “issues of concern with respect to India’s environment for intellectual property protection and enforcement".

The US stand has been overwhelmingly welcomed by Pharmaceutical Research and Manufacturers of America (PhRMA), an industry lobby that represents large research-based drug makers worldwide.

“We continue to believe that the systemic pattern of undermining patented medicines in India warrants its elevation to ‘priority foreign country status,’ and we welcome the announcement that USTR will initiate an out-of-cycle review of India," PhRMA president and chief executive John Castellani said in a statement on Thursday.

“Such a review (out-of-cycle review) provides a needed avenue for constructive engagement with the incoming Indian government on how to resolve the deteriorating IP (intellectual property) environment in India. Nothing less than full engagement in the months ahead is needed to resolve these critical issues," added Castellani.

But international patient care group Médecins Sans Frontières (MSF), or Doctors Without Borders, has strongly criticized the report, calling it a pressure tactic by the US to make India submit to the interests of big pharma companies.

“The US Trade Representative is throwing every single intimidation and pressure tactic it has at its disposal at India," said Judit Rius Sanjuan, US manager of MSF’s Access Campaign.​

“This is just the latest example of how USTR is attempting to penalize India for not bowing to the endless efforts of the multinational pharmaceutical industry to severely restrict generic competition in India and world-wide," she added.

The Big Pharma argument in support of keeping India under patent law pressure is that it is essential to incentivize research and development in the industry.

“Maintaining global incentives for research and development into new medicines is essential for continued innovation of treatments for improving the health and lives of patients," says PhRMA.

Mutlinational drug makers, led by US-based companies such as the world’s largest drug maker Pfizer Inc., have been complaining against India’s poor enforcement of intellectual property law for some time now.

Certain provisions in India’s 2005 amended patent law, including section 3 (d) that denies patent grant for incremental research without significant change in the efficacy profile of a known drug and provisions for opposing frivolous patent claims, have been cited by multinational drug makers in their complaints.

The government granted India’s first compulsory licence to a domestic generic company, Natco Pharma Ltd, in 2012 to manufacture a copy of a patented cancer drug of German multinational Bayer Healthcare AG. And in 2013, an adverse ruling by the Supreme Court in a patent dispute involving Swiss drug maker Novartis AG claiming patentability of its cancer drug Glivec added to big pharma concerns.

In a US house committee hearing on US-India trade relations on 13 March, Pfizer’s chief intellectual property (IP) counsel Roy F. Waldron accused India of being anti-IP rights.

“The business environment (in India) for innovative industries has deteriorated significantly in recent history," Waldron said in a written testimony, adding: “India has taken steps that call into question the sustainability of foreign investment and the ability of American companies to compete fairly."

Waldron added in his testimony that despite being a member of the World Trade Organisation (WTO) and an important global trading partner, India “has systematically failed to interpret and apply its intellectual property laws in a manner consistent with recognized global standards, and it (Pfizer) has seen growing trend of anti-IP developments..."

Patient care groups MSF counter this US stand, saying “India, the world’s principal producer and supplier of quality generic medicines, has in recent years repeatedly been singled out by the US government and the multinational pharmaceutical industry on the grounds of insufficient enforcement of intellectual property,"

“Yet what India is doing when it seeks to limit patent ever-greening (where companies file multiple patents in a bid to keep extending monopolies), or when it authorizes the sale of a generic version of an expensive patented medicine through the use of compulsory licenses, is entirely within global trade rules, and these actions save lives," patient groups say.

The US is particularly worried because other countries are now considering adopting domestic legislation modelled on the Indian law.

The US pharmaceutical industry and USTR are clearly worried and are now seeking to curb India’s influence on global patent reform efforts that have the potential to increase access to medicines for millions in need in developing countries, said Médecins Sans Frontières in a statement on Thursday.

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