Fears over EU demand to seize drugs in transit

EU also says that if infringement is on commercial scale, judicial authorities may order seizure of assets of faulting company

Even as India moves forward to an advance stage of finalization of its Free Trade Agreement (FTA) in trade and investment, many in the industry as well as civil society are worried over the demands raised by the European Union.

According to sources, in the India-EU FTA draft document, EU has proposed its customs authorities will have the right to seize medicines in transit in case it suspects infringement of intellectual property rights (IPR).

Besides, EU has also demanded that in such situations where infringement is on commercial scale, the judicial authorities may order seizure of assets of the faulting company including its bank accounts as a precautionary measure.

Commerce Minister Anand Sharma is expected to meet EU trade commissioner Karel De Gucht on April 15 in Brussels to conclude talks on the agreement in a ministerial meeting. This meeting is crucial because its failure may jeopardize the agreement, as India will not be keen on negotiations if general elections are imminent.

According to reports, the FTA will also be on the agenda of Prime Minister Manmohan Singh, who is travelling to Berlin on April 10, and will hold talks with German Chancellor Angela Merkel. Germany is a key member of EU.

The domestic pharmaceutical industry, which is a major supplier of generic medicines to many African and other developing countries, is worried that strategic clauses and provisions of the agreement may hijack India’s stand and stricter law on patent.

“India is the pharmacy of the world and it not only produces generics, but also supplies it to many other countries. Patients across the world will suffer if EU manages to get through such provisions as suggested under the IP enforcement in the FTA draft document,” says Médecins Sans Frontières (MSF) campaign coordinator (India) Leena Menghaney.

“All our efforts and India’s stand so far related to patenting will go into waste if it agrees to EU’s conditions with respect to IPR in this FTA”.

Indian pharmaceutical companies have faced trouble on IPR related issues in European ports several times in the past as well. Consignments from major domestic drug makers were seized in the past in transit at European ports on grounds of alleged patent infringement.

In 2008, there were 17 cases where consignments containing medicines produced by some of the reputed Indian companies such as Dr Reddy’s Labs and Aurobindo Pharma were confiscated in the Netherlands, Germany and France. These consignments were on their way to countries in Africa and Latin America that do not have the capability to manufacture life-saving medicines.

The seizures followed complaints by pharmaceutical giants, holding patents to the medicines in Europe, including Sanofi-Aventis, Novartis AG and Eli Lilly. Subsequently, India had also filed a complaint with the WTO arguing that the seizures amounted to violation of the international intellectual property agreement, TRIPS, and asked the EU for consultations.

The domestic industry is afraid that though issues were temporarily resolved then due to pressure from India, EU is again trying to assert such norms through FTA.