ITC Investigates India Trade Practices

The International Trade Commission Investigates India Trade Practices

02.17.14 | By Mark Grayson

US ITC LogoAt the International Trade Commission (ITC) hearing on the investigation into India's trade policies, Rod Hunter, PhRMA’s Senior Vice President for International Affairs, highlighted the industry's concerns and hopes surrounding India’s policies.

According to Mr. Hunter, “IP is central to productivity, growth, and the competitiveness of U.S. companies in the global market. IP-intensive industries contribute to greater and more sustainable long-term economic growth, accounting for nearly 35 percent of U.S. GDP in 2010 or over $5.1 trillion in economic output. Robust IP rights have helped spark innovation and growth in countries – both developed and developing – throughout the world.”

Despite the consensus that IP is important to growth, Mr. Hunter suggests that, “India’s IP environment does not value innovation. In May 2013, President Pranab Mukherjee pointed out in his National Technology Day speech, 'India’s innovation bottom line is not very encouraging.' He observed that the U.S. and China receive 12 times as many patent applications as India. The example of the pharmaceutical sector demonstrates the problems with India’s policies.”

Over the last two years at least 15 products (of the estimated 50 patented products on the market) have had their patent rights undermined in India. This is clear evidence that “the Government of India has created a protectionist regime that harms U.S. job creators. The harm is evident in our industry, where the U.S. has welcomed Indian companies while India is closing its borders to U.S. innovators. Indian pharmaceutical manufacturers enjoy unfettered access to the U.S. market. Approximately 40% of all FDA marketing approvals for generic medicines in 2013 were for Indian products. 

The industry believes that this protectionist regime has consequences within India. “It is well established that developing countries gain from high-quality and high-quantity technology transfers associated with foreign direct investment. Such investment brings with it new technologies, higher productivity and wages, and spillovers to other firms that spur modernization. International businesses also bring R&D to countries that provide supportive IP environments, including R&D that is aimed at unmet local needs.”

While industry recognizes the challenges of extending healthcare, India's approach to intellectual property and innovative medicines is not the answer. Public health spending in India is among the lowest globally and multi-stakeholder sustainable solutions are required to address health infrastructure, human resources, and financing challenges. "Global research‐based pharmaceutical companies remain concerned about patients’ access to medicines and are committed to working with the Government of India and other stakeholders to provide sustainable access to medicines and healthcare overall. This includes making significant investments in the R&D of new medicines that will address significant unmet healthcare needs in Indian patients.”

Industry welcomes this ITC investigation as we have not been able to engage the Government of India in a productive dialogue about the link between innovation and patient health and the significant barriers that we face in India. India has the potential to be an innovation leader, but its current policies serve to “discourage the new knowledge, new opportunities and new medicines in India and around the world.”


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