The Beginning of the End of Affordable Generics

[Guest guest]

Press Release Issued by the Affordable Medicines and Treatment Campaign

(India), Medicins Sans Frontieres, Lawyers Collective HIV/AIDS Unit,

Alternative Law Forum. Delhi, India, 22nd March 2005, 8:45 p.m.

The Beginning of the End of Affordable Generics

Under a new Bill approved today, India will start granting product patents

for medicines – something they have not done since 1970 - without the

necessary procedures in place to safeguard against wholesale hiking of

medicine prices. India amended its 1970 Patent Act in order to be compliant

with the requirements of the World Trade Organisation.

A key safeguard to assure availability of affordable medicines is the

procedure of compulsory licenses – government grants patents but allows

generic companies to make their versions of the patented medicines against a

payment of a royalty to the patent holder. However, in the Bill that passed

the Lower House (Lok Sabha) today procedures are still extremely complex and

there is no control on levels of royalties to be paid, which will lead to

endless litigation and delays.

The new Bill “grandfathers” products that are already on the market by

allowing for automatic right to produce. The generic companies in such cases

will pay royalties to be set by the government to the patent holder.

International norms for royalties are in the range of 3-4%. This new law

however does not set a fixed royalty rate. In South Africa, GlaxoKline

attempted to charge 40% royalty until activists and the courts intervened.

The worst-case scenario for people living with life-threatening diseases has

been averted, but only in the short-term.

People who rely on low-cost medicines will have to wait three years before a

generic company can even make an application for a right to produce the

drug. Whereas people in wealthy countries will have access to new medicines

immediately when they are proved safe and effective, people in poor

countries will have to wait years.

In addition, with this Bill the government has crippled the critical right

of the members of the public to oppose patent applications on medicines, the

so-called “pre-grant opposition”. It is has been rendered ineffective

because the essential information on which to base the opposition will be

withheld from the public.

The Bill will go before the Upper House (Rajya Sabha) for a final vote. It

is expected that the Upper House will approve the Bill in its current form.

Contacts: Leena Menghaney (Delhi) 98 11365412, Berman +33 677535317

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Lawyers Collective HIV/AIDS Unit

63/2, 1st Floor, Masjid Road

Jangpura

New Delhi 110 014

Phone - 2432 1101, 2432 1102, 2432 2237

Fax - 2432 2236

e-mail - aidslaw1@...