India's New Patent Law Attracts NGO Controversy

March 22, 2005

New patent legislation to comply with India's WTO obligations is at last under discussion in the country's legislature, but the bill has continued to attract strong criticism from NGOs and leftist parties. The Patent Law is expected to be approved only after several weeks of fractious debate.

Groups hostile to the new legislation, such as international charities Oxfam and Medecins Sans Frontieres, claim that it will force producers of cheap HIV/AIDS and cancer generics off the market. The NGOs and opposition parties have also called for continued price controls to ensure continued affordability of essential drugs, although the proposed law does not directly envisage significant changes to the country's already harsh pricing policy. Meanwhile, in a worrying comment for the multinational drug sector, India's Trade Minister has pronounced himself "open to changes and suggestions" on the legislation.

There are roughly 5.1mn reported HIV/AIDS patients in India, with the US$5.1bn generics industry also a major player in treatment of the disease worldwide. Health activists claim that 50% of Sub-Saharan Africa's sufferers who currently take medicines are dependent on low-cost Indian generics.

Nevertheless, multinational drug companies and the government continue to claim that the law will directly benefit India's research sector and foreign investment levels, assuming it is approved. While it is clear that the new patent framework threatens many smaller producers dependent on production of so-called copycat drugs, many sophisticated Indian companies have already moved to develop their discovery capabilities and offer low-cost drug development services. Further, claims that the multinational sector will effectively dominate the industry are somewhat after the fact, given the long-standing strong market presence in India of the leading research-based foreign drug majors.