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Patently unfair trade: India's state-protected pharmaceuticals industry is being patented, privatised and plundered by WTO trade rules.

Article Excerpt
India's pharmaceutical industry, the world's fourth largest by volume, is a major exporter of relatively cheap generic medicines to both developed and developing countries. In 2001, the Mumbai-based firm Cipla commenced exports of a generic version of a triple-combination drug for the treatment of HIV/AIDS to Africa for around US$350 (for a one-year course). The price charged by the multinational drug companies was around US$12,000. The response of the 'big pharma' companies, supported by the US government, was to attack the Indian firms and their customers, notably the South African government, in the courts and the international institutions. This caused public outrage that ultimately forced a withdrawal of the legal action against South Africa, and the prices for HIV/AIDS drugs charged by the multinationals were also lowered. Still, the need for HIV/AIDS drugs in developing countries is far from being met, and US resistance to generics remains a key factor hampering supply.

Large-scale Indian exports of generic medicines were made possible by the absence of product patents for drugs, which were abolished (along with patents for agro-chemical products) in the early 1970s. Process patents were recognised but firms were free to develop alternative processes to manufacture a wide range of bulk and finished drugs at low cost. There were also high tariffs and restrictions on the importation of ready-made formulations, and transnational drug companies were required to reduce their stake in their Indian subsidiaries. The Indira Gandhi Government of that period subscribed (in some respects at least) to Nehru's vision of autonomous industrialisation, and sought to encourage the development of an indigenous pharmaceutical industry and to provide access to low-cost medicines. All in all, until recently, India was an unattractive market for the multinationals and many abandoned the country altogether. In 1970, domestic companies supplied only around 20 per cent of the drug market; by the 1990s this figure...

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