In a trade deal led by the United States, the Trans-Pacific Partnership (TPP) has two points that could lead to an increase in the prices of medicine worldwide. One sector to be most affected is the India drug industry, worth over US$15 billion and a major supplier of affordable generics to the world.

Leaders of this huge market have joined forces with the public health activists throughout the world in voicing their dissatisfaction with the new deal. They point out that it would only delay the arrival of cheaper drugs.

D.G. Shah, secretary general of an industry group representing some of India’s top drug makers, said the impact will be most noticeable from the end of 2017. This was especially dangerous because the India drug industry, considered by many to be the “pharmacy of the world”, is one of the world’s largest providers of generic medicine products. Countries ranging from the U.S. to South Africa relying on India as a supplier.

Comments by prominent figure suggested the deal favored big pharmaceuticals. Hilary Clinton, U.S. presidential candidate and former Secretary of State, said that the deal seemed to put the interests of big U.S. drug companies ahead of patients.

 

More Than Just About Trade

Jagdish Bhagwati, professor of economics from Columbia University, said the deal was meant to include trade-unrelated features on labor and intellectual property into trade deals, at the behest of U.S. lobbies.

“TPP is a model of such behavior and deplorable architecture,” he denounced.

The deal, which is a central tenet of U.S. President Barack Obama’s “pivot to Asia”, is pending ratification by its 12 member countries.

According to details from Wikileaks (the formal release of the text has yet to happen), the deal will extend patent life, which now stands at 20 years. The TPP will also abolish rules which allowed generic companies to undertake in product development during the life of the patent.

The estimated impact is still being studied by Indian drug makers. But industry executives have said that the deal would only hurt business in all nations which are party to the TPP.

 

India Drug Industry at a Disadvantage

Something  worth mentioning is the data exclusivity period for biologic drugs that the TPP would grant. Data exclusivity is stronger than a patent because it not only determines the length of time clinical trials data belonged to brand-name manufacturers, but also the period which other products cannot be approved using data by an innovator company.

The TPP would give companies in member nations data exclusivity rights for drugs for up to eight years.

This clause would effectively delay the launch of cheaper forms, or biosimilars, of such drugs by other companies since some TPP countries are not under similar protections.

Activists against this movement are in fear that these provisions could become the global norm. But there are others who believe it’s too early to tell what impact TPP will have on the world’s drug industries.

Amitabh Kant, secretary of India’s Department for Industrial Policy and Promotion, said that TPP is a long-term process involving negotiations with many parties. He added that the India drug industry is keen to become a global player.

India’s involvement with the TPP is part of a greater trend. Some countries choose to make themselves less competitive, but others are moving in the right direction.

About Ashoke Gupta

Ashoke is an expert in international trade and has worked in over 10 countries during his life, from Panama to Japan. He currently lives in his hometown of Mumbai and is an expert on West Asian markets.
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