What’s Ailing the EU-India Free Trade Agreement

India and the European Union have reportedly hit a snag in their long-running negotiations over a free trade agreement, hoped to boost bilateral trade by nearly $30 billion. Initially slated for signature in early April, the agreement now appears to have been postponed until 2012. One of the key sticking points in the negotiations is a proposal to enhance intellectual property protections for medicine.

India has a thriving generic drug industry. It did not allow patents on pharmaceutical products until 2005, when it adapted its laws to conform with the World Trade Organization's intellectual property rules. Products produced prior to that date are still not patentable, and in many other respects India's intellectual property regime is more flexible than that of the EU and the U.S.

Leaked drafts of the FTA have indicated that the EU is insisting on a number of measures that would limit the freedoms afforded to generic drug manufacturers in India. Observers, including the U.N. special rapporteur on the right to health, have pointed to the EU's demand for data exclusivity requirements as being particularly problematic. Under these rules, companies seeking approval from national health authorities to produce a generic copy of a medicine would be barred from using the drug manufacturer's previously existing data on its safety and effectiveness. This would effectively require generic companies to conduct expensive clinical trials before producing generic medicines, a limitation that critics argue will significantly reduce (.pdf) the number of generics produced.

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