India — a leading producer of generic medicines — has earned the title, "pharmacy of the developing world." Photo: iwishmynamewasmarsha (flickr)

Medical experts fear that clauses in the EU-India Free Trade Agreement (FTA) could leave millions of the world's most vulnerable people without access to the lifeline India presently provides: cheap, generic medicines, reports Al Jazeera.

The debate over generic drugs goes to the heart of the way medicines are produced and distributed around the world. India's pharmaceutical industry makes most of its money producing cheap generic versions of drugs patented by its Western counterparts, bypassing a system designed to ensure drug developers are rewarded with a period of exclusive sales rights for new medicines.

The patent system is supposed to incentivize the production of new treatments and ensure that research costs are recouped. But it also creates a monopoly, allowing drug companies to charge whatever they see fit for their products…

The concern is that the FTA may disallow India from continuing to sidestep this system. This could limit the capacity of India's generics industry to produce and distribute these cheap medicines, which are primarily channeled to other developing countries.

India's pro-public health laws allow multiple manufacturers to compete for India’s medicines market. According to an opinion piece written for the Bankok Post by Paul Cawthorne of Médecins Sans Frontières' campaign for essential medicines, this has driven "prices for the most-affordable drug combination down by more than 99 percent over the last decade."

That India can provide essential medicines at this price explains the fact that at least half of Africa’s five million AIDS patients already undergoing treatment use Indian-made generic drugs, says to Dr. Hans Hogerzeil, who heads the World Health Organization's essential medicines and pharmaceutical policies department.

The millions who comprise this demographic stand to loose the most, as the "data exclusivity" provision of the FTA could make cheap generics significantly less accessible. It appears that this provision will effectively copyright data collected during clinical trials in a drug’s originator country, according to the Al Jazeera article. If this occurs, Indian generic drug manufacturers will be forced to choose one of two options to gain approval for marketing their generic version of a drug: Either wait for up to 10 years until the period of exclusivity ends, or re-conduct already-completed trials. Both options would likely hike up the prices and delay the market entry of essential medicines.

The European Commission (EC) says the purpose of this clause is to protect the intellectual property rights of the patent-holding pharmaceutical companies (mostly Western and transnational). Given that the clinical trials are so costly and long-lasting, this motive is logical. But according to Al Jazeera, members of the medical community suspect that in fact, the data exclusivity clause is a masked effort to buffer the profits of these companies from the competition India’s generics industry introduces.

The EC has yet to formally release the fine print, though the FTA is expected to be finalized by the end of 2010 or early 2011, according to Intellectual Property Watch, an independent news service which focuses on intellectual property policies. The Commission is steadfast (if vague) in its claims that these agreements will not adversely affect the Indian generic drug industry:

The EU fully acknowledges India's right and capacity to manufacture and export life-saving medicines to other developing countries facing public health problems. The [intellectual property rights] provisions proposed in the EU-India FTA are not intended to weaken this.

Only when the FTA is finalized will its full impact on India's generics industry be felt, and will it become clear whether or not India will be able to maintain its vital position as the "pharmacy of the developing world."