Home/ Politics / Policy/  India cancels EU trade talks over pharma ban

New Delhi: India has cancelled a meeting with the European Union’s (EU’s) chief trade negotiator in protest against an import ban on 700 of its generic drugs for alleged manipulation of clinical trials, dealing a blow to the proposed free-trade accord between the European trade bloc and Asia’s third-largest economy.

The decision was taken as the government is “disappointed and concerned by the action of EU in imposing legally binding ban on the sale of around 700 pharma products clinically tested by GVK Biosciences, Hyderabad" on 16 July, the commerce ministry said in a statement on Wednesday. The meeting between chief trade negotiators of the two sides was scheduled for 28 August.

The cancellation of talks is only the latest setback to the proposed free-trade agreement (FTA) that the two sides have been negotiating since 2007. Differences over the lack of access for Indian professionals to EU’s labour market and high taxes imposed on liquor and car imports from Europe have thwarted efforts to reach an accord that is expected to boost trade between India and the EU.

D.G. Shah, secretary general, Indian Pharmaceutical Alliance, a lobby of domestic drug makers, said the government seems to be sending a strong signal to the EU against the arbitrary decision to ban some Indian generic medicines. “EU has acted unfairly and without any proof."

The ban follows the recommendation of the European Medicines Agency’s (EMA’s) Committee for Medicinal Products for Human Use to suspend the licences for some medicines in the EU that were based on clinical trials conducted at GVK Biosciences’ site in Hyderabad.

EMA’s recommendation was based on an inspection by the French medicines agency (ANSM) in 2014 of GVK Biosciences’ Hyderabad facility. The inspection cast doubt on the way clinical trials were performed at the site and therefore the reliability of data used to support the granting of a licence.

“While the drug inspector sent by the French authorities claimed ECG (electrocardiogram) data of clinical trials were manipulated, the inspector was not competent to vet such data. It is only a cardiologist who can verify such data," Shah claimed, terming the ban on 700 generic drugs, sweeping.

The UK government on Tuesday said the ban on the drugs was being imposed only as a precautionary measure. “There is no evidence of safety concerns or loss of efficacy with these products. People should continue to take their medicines as prescribed," it said.

India could lose about $1-1.2 billion worth of drug exports because of the decision taken by the European Commission to ban the drugs, according to Pharmaceuticals Export Promotion Council (Pharmexcil).

The country exported $15.4 billion worth of pharmaceutical products in 2014-15, with Europe accounting for $3 billion, or 20% of the total. Out of the $3 billion, exports of generic medicines constituted about $1 billion and drug ingredients accounted for the rest, according to Pharmexcil.

“Pharmaceutical industry is one of the flagship sectors of India which has developed its reputation through strong research and safety protocols over the years and, therefore, government of India will examine all options in this regard. It is pertinent to mention that most of these drugs are already in EU market for many years without any adverse pharmaco-vigilance report from any member state,’ the commerce ministry statement said.

India and the EU have missed at least four deadlines to clinch a free-trade accord, called Broad Based Trade and Investment Agreement, even after 15 rounds of talks.

A prolonged recession in the EU, and its focus on concluding the Transatlantic Trade and Investment Partnership agreement with the US, also delayed the progress.

Trade minister Nirmala Sitharaman met her counterpart, EU trade commissioner Cecilia Malmström, on the sidelines of an informal meeting of trade ministers in Paris in June and decided to revive talks at the chief negotiators’ level.

Accordingly, India’s chief trade negotiator J.S. Deepak and his EU counterpart Ignacio Garcia Bercero were scheduled to meet in Delhi.

India’s exports to the EU contracted 4.4% to $49.3 billion in 2014-15 while imports contracted 2.2% to $48.8 billion.

India and the EU have a long history of tussle over generic drugs. India initiated dispute settlement consultations in May 2010 at the World Trade Organization with the EU on the issue of detention of Indian generic medicines while in transit. The dispute was triggered by repeated instances of seizure at EU ports, particularly in the Netherlands, of Indian generic drugs meant for export to Latin American and other countries in 2008. However, both sides reached a settlement to the dispute in 2011 and EU agreed not to seize generic drugs consignments in transit through its territory.

The EU also banned the import of Alphonso mangoes, brinjal, taro, bitter gourd and snake gourd starting May 2014 citing the presence of pesticides. However, after a strong protest by India, EU lifted the ban on Alphonso mangoes in January though the ban on vegetables still continues.

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Updated: 06 Aug 2015, 01:06 AM IST
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