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THE
HINDU: Time for pharma course correction
The
Finance Ministry’s decision to
withdraw customs duty exemptions for 76 life-saving drugs will at once make them more expensive
and impact patients who are already paying a high price for such medical
treatment.
It is important to keep in mind that a majority of Indians meet health
care costs through out-of-pocket expenditure, and any increase is bound to
adversely affect them. It is true that the customs duty waiver is an interim
measure, and that the list has to be revised periodically. Certain drugs now
removed from the list are either no longer used by patients or are being
manufactured in India at a lower cost than the imported ones, and therefore
should be removed from it anyway. However, it is not clear what “public
interest” is served by removing certain essential medicines that are either not
manufactured in India or whose demand currently exceeds local manufacturing
capacity. While the government has been enthusiastic about withdrawing the
exemption for 76 drugs, it has failed to include certain life-saving or essential
drugs that have been launched recently and are under patent protection. This
indicates that consultations have not been broad-based; this has to be
corrected as the patient’s interest should be the priority. Unlike in the case
of other commodities where the consumer is the decision-maker, doctors’
prescription preferences, sometimes based on partisan considerations, dictate
whether a patient ends up buying imported drugs even when locally manufactured
options are available at a lower price. It is for this reason that the
withdrawal of 22 per cent customs duty exemption on imported drugs could have
an impact on a patient’s budget; imported active pharmaceutical ingredients
(APIs) will also increase the cost of generics made locally.
Since
the late 1990s, India has lost out to China in the API market. Active as well
as enabling support from the government in various forms helped the Chinese
industry flood the Indian market with cheap APIs. While the product patent
regime that came into full force since 2005 and the flooding of the market with
Chinese APIs may appear to be genuine reasons for giving the Indian industry
cover to catch up, any protection cannot be long-lasting. The only way for the
Indian drug industry to grow is by investing in research and development and in
producing novel drugs that enjoy patent protection. India is the pharmacy of
the South, but that dominance is restricted to generics. This has to change,
and the government has to extend support in larger measure. As is the case in
the U.S., many drugs that go on to become commercially profitable have their
origins in academic and government institutions. Unfortunately, the recent
decision to cut research funding will not help the industry. The earlier the
government realises this and changes its priorities, the better it would be for
the country.
waiv·er
An act
or instance of waiving a right or claim
in·ter·im
The
intervening time.
dic·tate
Lay
down authoritatively; prescribe.
nov·el
A
fictitious prose narrative of book length, typically representing character and
action with some degree of realism.
THE HINDU: Adhering to basics
and freedom
The
Telecom Regulatory Authority of India (TRAI) has to be commended for batting unambiguously for net
neutrality, the principle of non-discrimination that is vital for the Internet
to remain an open platform. Its decision was made clear on Monday when it
prohibited telecom providers from charging differential rates for data
services. The regulator’s stance is commendable for two other reasons as well.
One, it had to face enormous pressures to tinker with the way the Internet is
governed. And, two, net neutrality, with its numerous interpretations, is a
complex concept. The latest ruling could no doubt set the tone for regulators
across the globe, especially those of countries that have socio-economic
features akin to India’s. More important, it would ensure that generations of
Indians are not forced to be satisfied with services that pretend to be the
Internet itself, robbing them of the real benefits of the medium. TRAI’s
decision would bring relief and cheer to the millions of Indians as also some
voluntary groups that admirably campaigned
for months together for this result, worried as they were that the regulator
would give up on net neutrality. The danger had seemed that real. In the last
year or so, there have been more than a few attempts by the big players to
offer Internet services that intrinsically seemed to violate this principle.
The public debate on net neutrality began during late 2014 when India’s top
telecom carrier Bharti Airtel decided
to charge users extra for the use of applications with which they can make free calls
over the Internet.
But
the most prominent and persistent among the companies has to be Facebook, which
spent a lot of time in pitching
its Free Basics initiative as an altruistic effort that would help millions of India’s
Internet have-nots. Its founder, Mark Zuckerberg, took a personal interest in
the campaign. Facebook’s global rebranding of its internet.org initiative as a
platform open for all but adhering to Facebook’s standards, which offered “free
and basic services”, was arguably the consequence of the debate over net
neutrality in the country. The point about providing at least some access to
millions of new users for free, who otherwise cannot afford it, must have been
difficult for TRAI to ignore. And that is why it is important to recognise that
a ‘no’ to Free Basics does not imply a failure on the part of TRAI to recognise
the importance of catering to the Internet have-nots. In fact, the regulator
has noted that it is not against the provision of limited free data that allows
a user to explore the Internet. Simply put, it finds this route palatable
because the choice is with the user. This is also a route that Free Basics
could explore in the immediate future in order to stay alive in India. The
regulator’s problem with a price-based differentiation has more to do with the
fact that in a market such as India it would distort consumer choice and have
consequences that wouldn’t be understood easily. The ruling also suggests that
while TRAI recognises the need for India to bridge the digital divide, it
realises that compromising the basic ideals of the Internet is not the way to
do it.
ad·here
Stick
fast to (a surface or substance)
pro·hib·it·ed
That
has been forbidden; banned.
com·mend·a·ble
Deserving
praise.
e·nor·mous
Very
large in size, quantity, or extent.
tin·ker
(especially
in former times) a person who travels from place to place mending metal
utensils as a way of making a living.
a·kin
Of
similar character.
intrinsically
With
respect to its inherent nature; "this statement is interesting per
se"
pal·at·a·ble
(of
food or drink) pleasant to taste.
dis·tort
Pull or
twist out of shape.
INDIAN
EXPRESS: Beyond the figures
The advance estimates
of national income, released by the Central Statistics Office (CSO) on Monday,
have flummoxed many — for good reason. Firstly, the third quarter (October to
December) real (after adjusting for inflation) GDP growth rate has been pegged
at 7.3 per cent, which was above market expectations. Data suggests this growth
has been driven by manufacturing and services. However, most of the leading
indicators, such as credit growth or capital expenditure, signal a very slow
economic recovery. Secondly, there was another positive surprise as the (real)
GDP growth rates for quarters one and two were bumped from 7 to 7.6 per cent
for Q1 and 7.4 to 7.7 per cent for Q2. As a result, the overall GDP growth rate
for the current financial has been pegged at 7.6 per cent, better than the 7.2
per cent for the last financial year (2014-15). Incidentally, the FY15 figures
were revised down on January 29. Of course, the revisions are a valid outcome
of the new methodology, yet the extent and frequency of revisions as well as
the lack of clear understanding of the new methodology have made the task of
drawing meaningful conclusions more difficult than usual. The new data may well
lead to a monetary and fiscal policy showdown.
To be sure, not all
pieces of data were positive. The nominal (inclusive of inflation rate) GDP
growth rate for FY16 is pegged at a 13-year low of 8.6 per cent. This has at
least two implications. One, the government is likely to miss its fiscal
deficit target (3.9 per cent of the GDP). Reduced nominal GDP growth would mean
a 4.1 per cent deficit. Two, while the government looks at the falling nominal
growth (due to negative wholesale inflation) to argue for an expansionary
fiscal policy, which, in turn, will lead to still higher fiscal deficits and
inflation, the RBI will pull in the opposite direction on the monetary policy
front (towards raising interest rates) because it looks at retail
inflation (around 5.6 per cent). Needless to say, this imminent policy mismatch would have to be resolved.
inflation (around 5.6 per cent). Needless to say, this imminent policy mismatch would have to be resolved.
On the face of it,
India has done well to weather back-to-back droughts as well as the crash in
exports without losing its way. Even by the old GDP methodology, economic
growth in Q3 was 5 per cent. The future will depend on policy action by the
government as well as a normal monsoon. That sounds familiar, even if not very
promising.
flum·moxed
Bewildered
or perplexed.
peg
Fix or
make fast with a peg or pegs.
bump
Knock
or run into someone or something, typically with a jolt.
THE FINANCIAL EXPRESS: TPP’s all about the health of
Big Pharma
The signing of the Trans-Pacific Partnership (TPP)
agreement in New Zealand on February 4 by the US and 11 other countries clearly
had a celebratory ring around it. However, we need to reflect on the damage
that the implementation of TPP is likely to inflict on public health policies
in the world. Many provisions in the TPP are designed specifically to protect
and further enhance the windfall profits of pharmaceutical MNCs in the US,
while overriding the legitimate concerns on access to affordable medicine.
By eliminating competition in the
market from generic drugs, the TPP tilts the balance significantly in favour of
the Big Pharma in at least six different ways. First, the TPP lowers the bar on
patentability by mandating that any new use of a known substance or a new
process or a new method of using a known substance would become eligible for a
patent. Thus, a drug molecule that has already benefited from 20 years of
patent protection can become a viable patentable subject matter for yet another
20 years if a new use is found of the same substance. Sustained release forms
of existing molecules and fixed dose combinations of drugs, could be some of
the other channels for repeated grant of patent protection on essentially the
same medicine.
Second, the TPP provides for patent
protection beyond 20 years for supposedly compensating the applicant for delays
in patent office. It is important to recall that two decades earlier, using the
very same argument, Big Pharma, had secured the 20-year term for patent protection
under the WTO TRIPS Agreement. Clearly, there appears to be no limit to the
number of times the same argument can be flogged by the Big Pharma to enjoy
monopoly protection in the market. What is worse is that this will also lead to
differing periods of patent term depending on delays in country jurisdictions.
Third, TPP mandates countries to
provide data exclusivity for 5 years for pharmaceuticals which can be extended
by 3 years if new clinical information is submitted and 8 years for biologics
from the time it is registered in the concerned country. During the period of
data exclusivity, clinical trial data submitted by the originator company
establishing safety and efficacy of the medicine cannot be relied upon by the
regulator to grant approval to another applicant showing bioequivalence with
that medicine. Data exclusivity, which is a TRIPS Plus measure, will delay the
entry of generic drugs in the market.
Fourth, data exclusivity protection
will also apply to sustained release or fixed dose combinations of molecule,
paediatric dose or for developments that improve the administration of the same
medicine. As small improvements in existing formulations is a continuous
process, even marginal changes which satisfy the conditions for application of
data exclusivity will get protected. This will lead to yet another form of
ever-greening the monopoly rights enjoyed by the Big Pharma.
Fifth, the TPP mandates that the
principles developed by the International Conference on Harmonization (ICH) be
adhered to by the TPP members while considering applications for marketing
authorisation for pharmaceutical products. ICH standards for drugs have been
extremely controversial. Even the WHO has observed that the adverse impact of
withdrawal of certain drugs might well be “far more dramatic than that of any
hypothetical risk posed by failing to achieve the ICH standards.” This should
ring alarm bells among developing countries that are parties to the TPP, as
well as other nations that may be contemplating to join TPP.
Sixth, the TPP has opened a window
for preventing new generic drugs from being listed as a pharmaceutical eligible
for reimbursement under national health care programmes operated by different
countries. The TPP requires that companies be allowed to intervene and seek
remedy if they are dissatisfied with the process of listing of eligible
pharmaceutical products and the amount of reimbursement. This has raised
concern among many quarters of the possible influence that the Big Pharma may
employ to exclude new generics from national health care programmes.
Overall, the TPP will critically
reduce, if not totally eliminate, competition from generic pharma companies and
adversely impact access to medicines. The repercussions of a regime that would
be created by the TPP can be visualized from the example of the drug
‘Sofosbuvir’. For a three-month treatment in the US for Hepatitis C, this
medicine costs $80,000. If patients in developing countries are deprived of
generics and instead have to pay this price, bursting of family budgets on
account of medical treatment would become a common crushing reality.
The TPP would also disincentivise
path-breaking medical research and future development of technologies.
Investing resources in new research would be more expensive and risky, while an
easy alternative of ensuring high profits would exist through ever-greening of
patents. If more countries become party to the TPP, the magnitude of the
unpredictability, uncertainty and fragmentation of the market due to differing
terms of patent protection and data exclusivity would make it unviable for
generic manufacturers to invest in new manufacturing facilities.
In conclusion, it would not be an
exaggeration to state that some of the rules under the TPP for the protection
of intellectual property are clearly written by MNC pharma companies. With
medicine prices set to surge significantly as a consequence, even the
middle-class in most countries may get deprived of life saving drugs. Is this
the world that trade negotiators wish to bequeath to our future generations?
World leaders have a moral obligation to prevent this human tragedy from
unfolding.
The author is professor, the Centre for WTO Studies, Indian Institute of Foreign Trade. Views are personal
The author is professor, the Centre for WTO Studies, Indian Institute of Foreign Trade. Views are personal
in·flict
Cause
(something unpleasant or painful) to be suffered by someone or something.
en·hance
Intensify,
increase, or further improve the quality, value, or extent of.
tilt
Move or
cause to move into a sloping position.
man·date
Give
(someone) authority to act in a certain way.
sup·pos·ed·ly
According
to what is generally assumed or believed (often used to indicate that the
speaker doubts the truth of the statement)
flog
Beat
(someone) with a whip or stick as punishment or torture.
bi·o·log·ic
Another
term for biological (noun)
paediatric
Pediatric:
of or relating to the medical care of children; "pediatric dentist"
ad·here
Stick
fast to (a surface or substance).
reimbursement
Compensation
paid (to someone) for damages or losses or money already spent etc.; "he
received reimbursement for his travel expenses"
re·per·cus·sion
An
unintended consequence occurring some time after an event or action, especially
an unwelcome one.
de·prived
Suffering
a severe and damaging lack of basic material and cultural benefits.
burst
(of a
container) break suddenly and violently apart, spilling the contents, typically
as a result of an impact or internal pressure.
un·vi·a·ble
Not
capable of working successfully; not feasible.
ex·ag·ger·a·tion
A
statement that represents something as better or worse than it really is.
be·queath
Leave
(a personal estate or one's body) to a person or other beneficiary by a will.
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