India will be continued in priority watch list in the year 2016 as per Special 301 report submitted by PhRMA (Pharmaceutical Research and Manufacturers of America) to USTR (United States Trade Representative). PhRMA clearly reproval Indian IPR (Intellectual Property Rights) regime.
PhRMA urged to USTR to provide an opportunity for a meaningful assessment of India’s IP regime through an Out-of-Cycle Review, so that the U.S. Government can evaluate progress on important issues and dedicate the required bilateral attention necessary to translate India’s commitments into substantive and real policy change in the IP and market access barriers confronted by U.S. businesses in India.
As per PhRMA,
India’s legal and regulatory systems pose procedural and substantive barriers at every step of the patent process, ranging from the impermissible hurdles to patentability posed by Section 3(d) of India’s Patents Act to the narrow patentability standards applied in pre-grant and post-grant opposition proceedings. Not only is this a concern in the Indian market, but also in other emerging markets that may see India as a model to be emulated. Since early 2012, roughly twenty - five products have had their patent rights undermined in India. In 2015 alone, at least six products have faced issues due to the continued denial of applications under Section 3(d), infringement due to state - level marketing authorization for generic versions of on - patented drugs, and the threat of compulsory licenses (CLs), all of which demonstrate that there have been no concrete policy improvements in India.
While the Government is keen to reinvigorate clinical research in India, ambiguities continue to prevail in the Indian regulatory space. In particular, the ambiguities in the definition of “trial related injury”, a lack of appeals mechanism in decisions about causation, and criminal penalties for trial sponsors who deviate from clinical trials protocol continue to perpetuate a burdensome environment for clinical research and undermines the availability of new treatments and vaccines for Indian patents.
PhRMA member companies operating in India face high effective import duties for active ingredients and finished products. India collects more in taxes on pharmaceuticals than it spends on medicines. Broad analysis indicates total annual Government expenditure on drugs in India around $1.15B in comparison to the $1.22B it receives in taxation of pharmaceuticals. Compared to the other Asian countries in similar stages of development, import duties in India are very high.
PhRMA’s members are concerned about the general lack of access to health care in India. The Indian government circulated a draft National Health Policy early in 2015 that called for greater access to healthcare for low-income patients. India has an insufficient numbers of qualified healthcare personnel, inadequate and poorly equipped healthcare facilities, and most importantly lacks a comprehensive system of healthcare financing which would pool financial risk through insurance and help to share the cost burdens. 97 Still, government spending on healthcare remains at 1 percent of GDP, one of the lowest levels of expenditure in the world.
The Department of Pharmaceuticals (DoP) Committee on Price Negotiation for Patented Drugs released a report in February 2013 which recommended an international reference pricing scheme with a purchasing power parity adjustment for government procured patented medicines, and those patented medicines provided through health insurance. The Committee also considered whether the price negotiation of a patented medicine should be linked with its marketing approval. In 2014, an Inter - Ministerial Committee was constituted to suggest a methodology to be applied to pricing of patented medicines before their marketing in India. While the Committee has met several times in recent months, the decision on a patented medicines pricing policy is still pending. PhRMA members are highly concerned that the lack of transparency in to the Committee process and the threat of the existing recommendation represent an effort to significantly reduce the benefits of patent protection, which will de facto discriminate against importers, and will create an unviable government pricing framework and business environment for innovative pharmaceutical companies.
In July 2014, the National Pharmaceutical Pricing Authority (NPPA), without prior notice to industry, issued 50 identical orders setting prices for non - scheduled diabetes and cardiovascular medicines beyond the scope of the existing Drugs Prices Control Order (DPCO), 2013, which sets ceiling prices for 348 essential medicines. The notifications fall under Paragraph 19, which authorizes the NPPA “in case of extra - ordinary circumstances, if it considers necessary so to do in public interest, [to] fix the ceiling price or retail price of any Drug for such period, as it may deem fit.” Subsequently, NPPA withdrew the underlying guidelines, but continued to pressure the industry to implement the prices fixed by the July 2014 orders. Transparency and predictability are paramount to a robust environment for business investment. These recent pricing decisions, as well as the broad authority granted to NPPA under this provision, do not respect the need for transparency, predictability, and trust in the decision - making process.
Finally, Paragraph 32 of the DPCO 2013 exempts from the pricing formula, for a period of five years, new medicines developed through indigenous research and development that obtain a product patent, are produced through a new process, or involve a new delivery system. This section creates an un - level playing field that favors local Indian companies and discriminates against foreign pharmaceutical companies.
In its 2015 report, USTR noted its expectation that “new channels for engagement created in the past year will bring about substantive and measurable improvements in India’s IPR regime” and that it would “monitor progress over the coming months....” Continued attention to IP and market access barriers in India has been a strong signal of the importance of these issues to the bilateral relationship and has been critical in preventing further deterioration of the innovation environment in that country. However, no meaningful action has been taken to address these barriers, and significant unpredictability in IP protection and enforcement remains.
