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Science Special Report Sport

16 - 23 February, 2001 TRIPS DRUGS

PATENT ROW TRIPS UP INDIAN DRUG COMPANY

The Indian drugs company Cipla has long supplied cheap generic drugs to the developing world, most recently anti-AIDS drugs. But new patent rules of the World Trade Organisation means the company risks running foul of multinational companies and the powerful governments that protect them. Gemini News Service reports on a tussle over treatments. BISWAJIT CHOUDHURY New Delhi960 words approx. The patents regime instituted by the World Trade Organisation in 1995 has recorded its first Indian cause celebre - in the Mumbai-based pharmaceutical company Cipla. The fallout, however, is worse for the HIV-infected in Ghana, who have been denied access to anti-HIV/AIDS drugs, known as anti-retrovirals. The Indian drug manufacturer has been accused by the multinational GlaxoSmithKline of patent infringement for trying to supply a cheaper generic copy of Combivir - a combination of two anti-AIDS drugs for which GlaxoSmithKline claims to hold the patents - to Ghana. After hearing about the patent row in August 2000, the Ghana Food and Drug Board rejected Cipla's applications to market its anti-AIDS drug in the West African country. For the present, Cipla is not the biggest loser in the episode. It was their first consignment of anti-retrovirals to Ghana, and worth no more than $17,000. Cipla maintains that it simply wants to provide cheap drug alternatives to AIDS sufferers. "We respect patents," Cipla's managing director Amar Lulla told Gemini News Service. "But our position is that we would like to supply cheaper drugs for the millions affected by the killer illness in Africa." Cipla is currently ranked as the second largest pharmaceutical company in India, after GlaxoSmithKline. The company, founded in 1935, now caters for a broad therapeutic category, with a bouquet of more than 800 drugs on the market. It exports to more than 120 countries and has an annual turnover of about $250 million. In comparison, GlaxoSmithKline has annual sales of $27.2 billion. Cipla specialises in marketing anti-AIDS and anti-cancer drugs at lower prices than its Western competitors. "We are able to offer cheaper prices mainly due to technological improvements that allow less costly processing," Lulla said. In the same way, antibiotics are made in India at one-eighth the price of the patented versions. India is one of about a dozen developing countries which have the know-how and capacity to produce

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and export inexpensive versions of the patented products available in industrialised countries. To reinforce Cipla's desire to sell the AIDS drugs at low prices, Lulla points to its package offered for Africa through the nonprofit organisation Medicines Sans Frontieres - the per person cost is $350 per year. This comes to less than $1 a day, compared to GlaxoSmithKline's offer to sell at $2 a day. Cipla's normal market price is $1,100. The Cipla case highlights the issue of WTO rules on drug patents - which critics such as the Britain-based aid agency Oxfam say provides the legal basis for global pharmaceutical giants and rich country governments to sell drugs at inflated prices. Oxfam accuses these governments and corporations of "conducting an undeclared war" against poor countries. The aid group's latest campaign, launched on 12 February, shows how exclusive marketing rights created by patents are driving up prices for medicines needed to treat major killers such as HIV/AIDS, respiratory infections and childhood diarrhoea. It targets GlaxoSmithKline by questioning its challenge against generic drug companies like Cipla. Oxfam policy director Justin Forsyth also warns of eroding public support for the industry, saying: "The global pharmaceutical industry runs great risk if it continues to protect its profits and drug patents at all costs." This, says Dr Meera Shiva of the Voluntary Health Association of India, a leading non-government organisation, is already happening. "Consumer and health groups are furious about these developments, which are loaded against health and humanity," she says. Shiva points to the tremendous pressure Western governments impose on developing countries to conform to patent regimes, including by threats of trade sanctions. The United States has its Special 301 provision a 'blacklist' of trade violators - by which it can impose sanctions on countries whose patent systems run against US trade interests. In the past, the US has threatened to invoke such sanctions against India and recently filed a case against Brazil at the WTO. Such pressures have prompted India to accept the WTO's Trade Related Intellectual Property Rights (TRIPS) agreement. TRIPS ensures that pharmaceutical companies maintain a 20-year patent on their products and guarantees exclusive marketing rights - which critics argue entrenches the monopoly on essential drugs produced by wealthy pharmaceuticals. The Indian government drafted a bill on intellectual property rights in 1999, incorporating TRIPS, but it has yet to be passed by Parliament. Until then, India continues operating under its 31-year-old patent law, which has allowed India's pharmaceutical industry to thrive for decades. Under India's Patent Act of 1970, pharmaceutical products themselves cannot be patented; only their production processes are protected for seven years - a distinction from product patents secured under TRIPS. Developing nations were required to comply with TRIPS by January 2000, but the poorest of them have been granted a 'grace period' until 2006. TRIPS does allow countries to guard public health from monopoly and high prices in cases of dire emergency by allowing governments to produce a patented drug or import cheap alternatives without permission from patent holders. But even this is being challenged by pharmaceutical companies, as shown in the case between 42 drug companies, including

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GlaxoSmithKline, and the South African government - over a South African bid to import cheap generic AIDS drugs. India's pharmaceuticals, along with its agro-chemical industry, would be most affected by the WTO's patent rules. Cipla could effectively be shut out of the business of providing low-cost generic drugs such as the AIDS-fighting antiretrovirals - to countries that need it most. A lawsuit launched by consumer groups, currently being heard by the Indian Supreme Court, contends that drug prices would rise steeply if TRIPS were to be implemented and pharmaceutical companies guaranteed exclusive marketing rights. The figures speak of how much global interest is at stake. Since January 1995 around 4,000 applications have been received by the WTO for product patents, though the average of new 'molecules' - that is inventions and processes - is only about 50 to 60 per year, worldwide. - GEMINI NEWS (GN34827) About the author: BISWAJIT CHOUDHURY is a freelance writer and regular contributor to Frontline newsmagazine, published from Chennai. 12 - 19 April, 2002 THE UNFULFILLED PROMISES OF A HERO 'WE ARE A FORCE TO RECKON WITH' WARN SIERRA LEONE'S WOMEN CANDIDATES TOUGH RECOVERY IN CAMP WHERE 'HOPE IS FADING AWAY'

'WE DON'T REALLY WANT THEM BACK ON OUR SHORES' PROVINCES WILL BICKER UNTIL THE HEAVENS OPEN WILDLIFE FLYING SQUAD SWOOPS INTO TROUBLE

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