Current affairs

Plot to criminalize India’s drug exports

In the month of January, this year, India’s premier drug manufacturer, ‘Dr.Reddy’s Laboratories’, exported a consignment of bulk drugs to Brazil. This consignment was seized and impounded in transit by Dutch customs, on charges of patent infringement.  The consignment, worth about US$500,000, contained the drug ‘Losartan’, which is used mainly to treat high blood pressure. This was a perfectly legal trade transaction, between India and Brazil. There was no patent infringement of any kind or any other violation of any international law or laws of both Brazil and India. In Holland, patent for this drug, is held by ‘DuPont’ under brand name ‘Cozaar’. However, the consignment was not meant for Holland and had not even reached Holland. It was seized in transit to Latin America. This Dutch act therefore just amounted to international Piracy if nothing else.


Consignments sent by few more Indian drug manufacturers such as, JB Chemicals and Pharmaceuticals Ltd, Medico Remedies Pvt. Ltd, Titan Pharma India Pvt. Ltd, and Mission Pharmaceuticals Ltd, all based in Mumbai, and Hyderabad-based Sainor Pharma Pvt. Ltd. also ran into similar trouble. Their consignments, no way sub-standard and absolutely genuine and legal were also seized on various EU ports.

All these and many other manufacturers in India, produce Generic Medicines in huge quantities. Generic medicines are equivalent to branded medicines in all respects, but have no patent protection. Just like branded medicines, they are manufactured under tightly controlled environment, use best quality raw materials and undergo stringent tests. Generic medicines essentially are cheap and are therefore very popular in almost all the developing world.

When a company develops a new drug, it has to bear astronomical costs towards development and user trials. To prevent duplication of their work, international patent acts provide protection to the original manufacturer for certain number of years. The idea behind this protection is that the original manufacturer should be able to recover his development and trial costs during these years. Multinational drug companies, who are major developers of new medicines, not only recover their costs by this protection but also make huge profits as during these protection years, they can really charge a price they wish, since there is no competition. Once this patent protection is over, other manufacturers bring out Generic medicines, equivalent to original branded medicine. These are naturally very cheap as development costs are low and the market for that medicine is already established. This benefits the consumer to a large extent. The original manufacturer however, can no longer make the huge profits as the market becomes very competitive. Multinational drug companies therefore hate these Generic medicines as these cut into their huge profits.

Indian manufacturers are producing Generic medicines in such huge quantities that it has become universal goal of all multinational drug companies, to try and kill this industry or at least stop their exports to other countries, by any means they have. However, the consumer response to these Generic drugs from international community is so huge that these multinational companies find themselves at a loss. Even countries like USA do allow Generic drugs to be sold after strict inspections and trials. The benefit of this naturally goes to Indian producers and American consumers, who get medicines at a reasonably low cost.

OXFAM organization has now reported that a group of rich developed nations, that include European Union, United States, Canada, Japan, Australia and New Zeeland, would be holding a meeting in Morocco in next few days under a very deceptive name of Anti-Counterfeiting Trade Agreement. Only two developing nations, no way connected in this issue, Morocco and Mexico, have been invited to this meeting. The meeting proposes to look into rules regarding international patent protection and trademark protection. In real terms this means that the countries attending this meeting, shall be given a right, to seize and confiscate Generic Medicines manufactured by India. Such of their acts, would become legal under international law. Surprisingly, their actions are proposed to be binding on countries, which would not even attend this meeting. These countries can also criminalize and prosecute Indian Generic drug manufacturers. Obviously, India and China have not been even invited to attend this meeting. The meeting is being held in such hush hush manner that even draft resolutions have not been released.

The plot is very clear. Kill Indian Exports of Generic medicines to poor and developing nations. Judge Indian Generic medicines manufacturers, to be criminals. The world would have no choice but to buy heavily priced medicines from Multinationals.

After all, what is the value of life for the poor and sick people from developing world? It is more important that the multinationals keep making their huge profits.

21 July 2009


About chandrashekhara

I am a retired electronics engineer. I am interested in writing, reading books. Other hobbies include Paper models, wooden fret work and social networking.


7 thoughts on “Plot to criminalize India’s drug exports

  1. A very comprehensive post, but I’d offer some words of caution:

    Firstly, only 6% of the EU’s seizures of medicines in 2008 were on the basis of patent-infringement. The vast majority (around 93%) were faked trademarks. Some Indian companies produce high quality generics, but many others produce vast amount of fake drugs that cause huge harm to patients across the world – especially in poor countries.

    India is the largest source of fake drugs in the world – over half of all the fake drugs that the EU seize are from India.

    Thus, while the EU must be sensitive in restricting drugs on the basis of alleged patent-infringement, it should be noted in the greater context of fake drug seziures.

    Posted by Julian H | July 22, 2009, 4:26 pm
    • It would be difficult to agree with your comment, that many Indian companies produce fake drugs. On the contrary, Drug production in India is very well regulated and controlled by the Drug Controller. Obviously there are always possibilities of some unscrupulous characters making misuse of system, but by and large Indian drug producers produce high quality generics.

      Posted by chandrashekhara | July 22, 2009, 4:34 pm
  2. Well the evidence suggests otherwise – as I say, EU figures constantly show that over half of all fake drugs they seize come from India.

    A new (peer-revied) study in India showed 12% of medicines bought in reputable urban pharmacies were significantly substandard – and the situation in rural areas will be much worse.

    A 2008 survey by India’s Associated Chambers of Commerce and Industry (ASSOCHAM) estimates that counterfeit drugs account for between 20 and 25 percent of the market in the National Capital Region (Delhi).

    Then there are stories like this: – where 92.5% of sampled drugs from Bhagirath Palace were fakes.

    And more recently: substandard drugs being sold in Maharashtra:

    The Confederation of Indian Industry says that civil law is too weak in India, and that companies cannot protection their trademarks. So long as this is true counterfeiters will fake drugs and get away with it.

    Posted by Julian H | July 22, 2009, 4:47 pm
    • That exactly appears to be the main problem. Indian Generic drug consignments sent to Latin America, are absolutely genuine and legal in both the countries of production and consumption. These consignments only reach EU in transit. They are not at all meant for EU. On what basis does EU customs seize them and brand them as fake?

      Posted by chandrashekhara | July 22, 2009, 4:55 pm
  3. I’m afraid I don’t understand your point. My point is that many drugs produced in India are fakes, and I’ve provided evidence to support this (and I have even more evidence if you’d like it).

    How do you know that all drugs exported from India (to South America or elsewhere) are genuine? Can you cite any evidence for this?

    In my first comment I stated that the EU should be careful when blocking drugs solely for patent-infringement when they’re in transit to South America – on this point I agree with you.

    But the EU also finds many fake drugs from India (millions, in fact), so we need to bear this in mind before criticising the other seizures too harshly.

    India (like everywhere else) needs a strong rule of law, less corruption, and reliable trademark protection – this encourages and rewards producers of high quality drugs (generic or on-patent) and punishes the producers of spurious products.

    If it can get this right, the Indian pharma market will prosper and could become one of the best in the world.

    Tapan Ray had a good article about this in the Economic Times yesterday:

    Posted by Julian H | July 22, 2009, 5:09 pm
    • You are very right. I am not at all disputing points raised by you in your post. The point I am trying to make is EU has no business to inspect, seize and brand any consignment of any product, which is originating in India and going to a third country. EU ports are being used only as a transit point. In any case, thank you for your wonderful response to my article. I thank you for that.

      Posted by chandrashekhara | July 22, 2009, 5:17 pm
  4. No problem at all, thank you for raising the issue and publishing my comments.

    Posted by Julian H | July 22, 2009, 5:19 pm

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