Compulsory licensing soon for export of generic drugs by India

The Indian pharmaceutical industry is expected to receive a massive boost if a recent attempt by the World Trade Organization (WTO) to amend its TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement on the access to essential medicines goes through.

If it happens, it will enable India to export generic versions of some costly life-saving drugs made under compulsory licensing to third world countries, especially in Africa, which do not have the production capacity for such medicines.

In a meeting of the General Council on February 20 at the WTO headquarters in Geneva, Director-General Roberto Azevêdo said for the ratification to go through, it still requires 27 member-countries to approve. If so, the amendment can come into force by December, a top official told Business Standard.

"It is an effective means of keeping prices of such drugs down because patent holders loathe seeing production licensed to other companies. India has ratified it. In fact, because of its production capacity, India has been seen as one of the countries that might be a third-country producer," the official added.

The 2001 Doha Ministerial Conference had decided to amend the TRIPS Agreement by allowing generic copies made under compulsory licences to be exported to countries lacking production capacity, if certain conditions and procedures are followed. Generally, a country issues a compulsory license to produce generic versions of a patented drug for domestic consumption. However, in 2003 it was agreed that such a provision could be expanded for export purposes, for the benefit of least developed countries and those lacking manufacturing capacity.

This was agreed in 2003 and implemented in 2005 but the ratification process could never be completed. What it says is the countries that lack the capacity to produce generic, life-saving drugs can import these from third countries under compulsory licensing provisions in the TRIPS agreement.

Presently, countries that require generics produced under compulsory licensing to be imported have used the waiver mechanism under the TRIPS pact.

However, this isn't enough. Countries with the wherewithal to export have to also change their domestic laws. So far, this has been only done by India, Norway, Canada and the European Union.