AEGiS-MISC: ARV ACCESS ISSUES (2): Why Is It That India Can Produce Cheap Generic ARV?

Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.

ARV ACCESS ISSUES (2): Why Is It That India Can Produce Cheap Generic ARV?

JVnet Forum posting** - April 19, 2004
Ngoc and Trang

The previous message mentioned cheap generics from India, and then talked about patent barriers to the production and importation in different countries. Did this question come to your mind, why is it that India can produce cheap generics for its people and for export to other countries, while many other countries cannot do the same?

Let's put aside India's advantages in terms of technology, human resources, production capacity and the fact that generic companies do not incur research and development cost... and look into which legal aspects allow India to do this.

In 1972, India passed its Patent Act, regulating patent protection in all areas of technology. According to this Act, pharmaceuticals and foods are considered vital areas, so no monopoly is allowed for products in such areas; only production processes are granted patent protection for 7 years. In accordance with this law, Indian pharmaceutical manufacturers have been able to produce generics legally.

On January 1, 1995, India became one of the first members of the World Trade Organization (WTO) and had to respect WTO's Trade-Related Aspects of Intellectual Property Agreement (TRIPS Agreement), which requires patent protection for inventions for a term of 20 years. This means pharmaceutical products and production processes would be the objects of patent protection.

An important detail is that the TRIPS Agreement has some articles allowing delay of TRIPS application after the Agreement's entry into force, and India has made full use of these articles.

According to article 65.1, a WTO member is only obliged to apply TRIPS provisions one year after the date of the Agreement's entry into force. This means India could delay application for one year, until Jan 1, 1996.

According to article 65.2, a developing country member can delay for a additional period of 4 years. This means India could delay until Jan 1, 2000.

According to article 65.4, if there is any area of technology for which a developing country member did not provide patent protection before the general data of application of the Agreement to the country, it is allowed to delay providing patent protection in this area for another 5 years. This means India could delay patent protection for phamarceuticals until Jan 1, 2005.

India decided to make full use of the total allowance of 10 years delay in patent protection for pharmaceuticals according to TRIPS after joining WTO.

According to TRIPS article 70.8, during the delay period, this member country has to provide a mechanism for patent applications to be filed. This mechanism is often called the "mailbox", which is kept during the delay period, and open for examination for patent granting on expiration of the delay period. Thus, many pharmaceuticals have been without patent protection in India, but their patent applications have been filed in the mailbox, waiting to be opened on Jan 1, 2005.

India's use of the flexibilities of TRIPS agreement has helped the people of India an many other poor countries access to important medicines in the form of affordable generics, including ARVs. It is unfortunate that few countries have made use of TRIPS flexibilities the way India did.

What will happen to Indian generic medicines after Jan 1, 2005 is an issue that affects many poor countries in the world. We hope that JVNET readers will look into and share information on this issue. Please send any information you have/find to quynhtrang@fpt.vn and ngocvn@yahoo.com.

PS: The Doha Ministerial Conference extended the period of TRIPS compliance delay for 49 least developed country members until 2016, but this list of countries does not include India.

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** JVnet, an email forum in Vietnam, was founded by Dr. Jamie Uhrig, currently moderated by Institute for Social Development Studies.

To post message on JVnet: send to jvnet@netnam.vn

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