Context: 

The draft of the Trade and Economic Partnership Agreement (TEPA) between India and European Free Trade Association (EFTA) was leaked.

Trade and Economic Partnership Agreement Between India and EFTA

• A free trade agreement is being negotiated between India and European Free Trade Association (EFTA) comprising the countries of  Switzerland, Iceland, Liechtenstein and Norway.
• India-EFTA: It is a broad-ranging agreement being negotiated between India and the four countries since 2008 to increase investment in India and reduce tariffs on exports.
• A draft of the Trade and Economic Partnership Agreement (TEPA) was leaked and made available on the website bilaterals.org (tracks international free trade agreements)

Specific Duration Clause in Draft Trade and Economic Partnership Agreement

• Specific  duration” clause: As per the clause, pharmaceutical companies could not rely on undisclosed test data (clinical trial data of the original manufacturer) while applying to their country’s regulators for permission to sell a drug to gain market approval for at least six years.
• The condition has to apply  for new’ chemical drugs as well as for biologics drugs also 
  • Biologics drugs: They are monoclonal antibodies, vaccine formulations involving  complex mixtures of organic and inorganic entities, and are harder to make copies of. Many Indian biotechnology companies are developing biologics drugs.

• Implication

  • It can lead to a delay in  access to affordable, generic versions of patented drugs in India by a minimum of six years
  • Data exclusivity: Implementing  it could  jeopardise access to essential drugs in general, as well as to delay the approval of generic versions of newer medicines. India does not have data exclusivity in its law.

Generic Drugs

• Definition: It is a drug which is similar to  an already marketed brand-name drug in dosage, safety, strength, quality, performance characteristics, risk, and intended use.
• They demonstrate bioequivalence, meaning that it  works in the same way and provides the same clinical benefit as the branded drug.
• Indian pharma industry: India produces over 60,000 generic drugs across 60 therapeutic categories with an  annual turnover of ₹3.4 lakh crore making it the 3rd largest Pharma country in the world.
  • Indian government’s Jan Aushadhi Scheme which allows free drugs to be made available to the poor runs on the strength of our Generic Industry

Indian Regulatory Approval of Generic Drugs

• The Patents Act 1970 regulates the patent protection regime for drugs in India. 
• The Act was amended in 2005 reintroducing  patent protection for medicinal products and agrochemicals in conformity of the TRIPS Agreement.
• Patents are granted for a term of 20 years from the date of application to novel (i.e. previously unknown) innovations involving an inventive step.
• Compulsory licensing:  It is a provision in the WTO’s agreement on intellectual property, TRIPS (Trade-Related Aspects of Intellectual Property Rights).
  • As per the provision a government can allow another manufacturer to  produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself.
  • Indian Patent Act:  Compulsory licence can be granted after the expiration of a period of three years from the date on which the patent has been granted. 
  • Grounds: 
    • The reasonable requirements of the public with respect to the patented invention have not been satisfied
    • The patented invention is not available to the public at a reasonably affordable price
    • Patented invention is not worked in the territory of India.
  • Example: India’s first ever compulsory licence was granted to Natco Pharma for generic production of Bayer Corp Nexavar for treating liver and kidney cancer in 2012.

News Source: The Hindu