http://edition.cnn.com/2005/BUSINESS/03/23/india.drugs/
India ending generic drug loophole
From CNN Producer Ram Ramgopal
NEW DELHI (CNN) -- Amid protests by opposition political parties, the lower house of the Indian parliament has approved legislation that would prevent Indian drug manufacturers from producing low-cost generic formulations without paying royalty to the patent holders.
In a voice vote Tuesday evening, Indian legislators passed the bill to amend the Patents Act of 1970, which gives process and product patent protection for medical drugs.
The bill now heads to the upper house of parliament where it's likely to win passage easily.
Under current law, Indian pharmaceutical companies are allowed to make generic versions of patented drugs without paying royalties so long as they follow a process different from that used to make the original drugs. India must amend the legislation to meet with its obligations as a member of the World Trade Organization. A 10-year window that allowed Indian drug companies to stick with the earlier rules ended on Jan. 1.
Indian drug manufacturers would now have to pay "reasonable royalty" to the patent holder, although the bill does not make it clear how that royalty would be determined.
Critics of the parliamentary amendment said the new law would raise the cost of generic drugs sold to hundreds of millions of people in developing countries. India supplies 40 percent of the world's low-cost generic drugs, including medicines to fight AIDS and malaria.
Ellen 't Hoen, director of the Affordable Medicines Treatment Campaign of Doctors Without Borders, said: "It will have repercussions internationally, that we are going to rely on one company that has a monopoly. And when you have a monopoly, you determine the rules of the game. So inevitably prices go up."
Deputies from the opposition Bharatiya Janata Party walked out of the parliamentary session without casting their votes, saying the government should have referred the bill to a special committee. "The government will be responsible for the consequences of the bill and the hardships," BJP spokesman Vijay Malhotra said.
For its part, the government said it would be able to keep the lid on the prices of medicines.
"If any upsurge in prices comes to the notice of the members (of Parliament) it will be brought to the notice of the Congress Party government. The government will have enormous powers to deal with any unusual price rise," said Industry and Commerce Minister Kamal Nath.
The controversial legislation was amended to take into account the objections of communist parties, part of the ruling coalition in New Delhi. The communists were particularly insistent that the concept of patenting and the right of the license holder be clearly defined in the bill.
Early industry reaction was positive. Dr. Yusuf Hamied of Cipla Limited, one of India's largest domestic pharmaceutical companies, said he had not had a chance to see the final version of the bill, "but if what I hear is correct, it's a big victory for India."
India joined WTO in 1995. The government noted it had to act to bring its laws in line with WTO mandates, and denied it was acting because of pressure from multinational corporations.