India is not part of the recently negotiated Trans-Pacific Partnership trade deal, but that doesn't mean the TPP won't still have a trade impact on its drug industry. As some industry veterans see it, the free-trade agreement spells bad news for the $15 billion drug industry that India has built by being a go-to country for cheap generic drugs.
As they read it, provisions like the 8 years of exclusivity the deal guarantees drugmakers before copies of expensive biologics can come into play will mean far fewer sales for Indian companies in the developing countries, like Vietnam, that are part of the deal, but also in the U.S., the world's largest market for generics.
"The generics decline will be discernible from the end of 2017," D.G. Shah, secretary general of Indian Pharmaceutical Alliance, told Reuters. Shah leads an Indian industry group that represents top drugmakers like Sun Pharmaceutical and Dr. Reddy's Laboratories. As he understands the deal, provisions like the one that would prohibit generic companies from starting product development during the life of a patent "will delay the launch of generics in the U.S.A. and other TPP member states."
Kiran Mazumdar-Shaw, managing director of biosimilars maker Biocon, was just relieved that deal wasn't worse for Indian companies. She said that pushback to the U.S. stance on patents forced a compromise on the IP issue. The U.S. was adamant it should be 12 years of exclusivity, while Australia wanted 5, in line with its current laws. When it looked like the deal might buckle under the impasse, they agreed on 8 years. That "should work to the advantage of Indian biopharma," Mazumdar-Shaw told Reuters.
There are others that are not very impressed by the terms of the deal. Groups like Doctors Without Borders say it hurts poor people in developing countries who will never be able to afford expensive Western drugs and now will have to wait longer to benefit from cheaper versions of lifesaving drugs.
But even one economist and noted free-trade advocate thinks the deal stinks. Jagdish Bhagwati, a professor of law and economics at Columbia University who was born in India but is a naturalized U.S. citizen, said the TPP is a perfect example of a trend in trade deals that adds up to bad practice. That is a move to include special provisions for U.S. industry groups that are not even related to trade. "TPP is a model of such behavior and deplorable architecture," he said.
Of course, there is still a chance that the TPP gets a political whipping in the U.S. or from other key players. A fight in the U.S. Senate is expected to be difficult. Some Democrats oppose it because they think it will lead to the loss of more U.S. jobs, while Republicans have promised to bring down any deal that fell short of the U.S. position of 12 years of biologics exclusivity. And some Australian lawmakers are saying the same thing about approving a deal that extended the IP shield beyond that country's current limit of 5 years.
- read the Reuters story