A good deal, but what about the drugs?

India’s dream of becoming an economic powerhouse will take a giant leap forward later this year with the scheduled signing of a bilateral free trade agreement with the European Union. The goal of the agreement is to triple the existing $74-billion trade flow between the two regions over the course of the next five years. Yet one outstanding issue is drawing considerable backlash, at home and abroad.

The agreement, according to a new study in the Journal of the International AIDS Society, could significantly harm India’s generic drug industry, which supplies 80 per cent of the cheap, anti-retroviral drugs (ARVs) that are sold to low- and middle-income countries. The study, which contains data from more than 17,000 donor-funded purchases of ARVs by 115 countries, suggests that negotiations between India and the EU have included measures that could delay, or in some cases restrict, generic medicines from reaching certain regions due to product patent restrictions, data requirements and tighter border rules. Such a move could significantly increase the cost of India’s ARVs, in addition to limiting dosage availability and delaying access to newer and more advanced drugs, the study argued.

Asian and Sub-Saharan countries have been able to purchase India’s cheap, generic drugs because Indian law requires that patents be granted on the manufacturing process but not on the product itself, allowing different companies to produce effectively identical drugs using different methods. It’s been a boon for India’s generic drug industry. Between 2003 and 2008, the number of Indian firms supplying ARVs more than doubled from four to 10, while the number of actual drugs supplied rose from 14 to 53.

Anand Sharma, India’s minister of commerce and industry, has gone on the record saying that “we will not allow any injury to be caused to the Indian generic industry.” But if the discussed measures turn into stipulations in the final trade agreement, the industry will be forced to change. And critics suggest that the inevitable greater restrictions will have catastrophic consequences for the people who need generic drugs to survive. “It will deprive hundreds of thousands, or even millions, of people in developing countries from having access to new life-saving medicines,” said Marcus Low, a researcher at Treatment Access Campaign, a South African-based activist group that promotes universal access to cheap medicines, in an interview with SciDev.net. “A problem that will become even more acute as resistance to currently used anti-retrovirals increases.”

Yet those in support of greater restrictions say it will motivate Indian companies to move away from “retro-engineering” existing drugs and promote the development of more innovative drugs that can be sold in Europe. Furthermore, it has been pointed out that by signing the Trade-Related Intellectual Property Rights (TRIPS) agreement in 2005, India was aware of the fact that it might be required to grant patents on products, along with the process, and that the new trade agreement will only promote an existing idea that was previously agreed upon but not yet implemented.