Context: India has rejected demand for data exclusivity in drug development in FTA talks with European Free Trade Association.
What is data exclusivity?
- Data exclusivity is an embargo clause that puts a minimum of six-year embargo on clinical trial data generated during the testing and development of a drug.
- Data exclusivity also applies to drugs not patented in India.
- Need for Data Exclusivity: This ensures adequate Intellectual Property Rights protection for the original drug manufacturers and incentivising innovation and R&D.
- Concerns of India and other developing countries against Data Exclusivity: However, such IPR restrictions like Data Exclusivity hampers the development of cheap generic drugs in the developing countries, particularly India and decreases the accessibility and affordability of latest drugs, hampering healthcare outcomes.
About Europe Free Trade Association (EFTA)
- It is an intergovernmental organisation set up in 1960 (through Stockholm Convention) for the promotion of free trade and economic integration between its members.
- Members: Four European countries of Iceland, Liechtenstein, Norway and Switzerland. Note: All these countries are not members of EU’s Common Market.
- EFTA does not envisage political integration but only an economic cooperation. It is not a customs union.
- EFTA States are not obliged by EFTA Convention to conclude preferential trade agreements as a group. They maintain the full right to enter bilateral third-country arrangements.
- EFTA Council is the highest governing body of EFTA, usually meets eight times a year at the ambassadorial level (heads of permanent delegations to EFTA) and twice a year at Ministerial level. Each Member State is represented, and decisions are taken by consensus.
- The Chairmanship rotates every six months. For the EFTA Council, the chairmanship rotates between Iceland, Norway, Liechtenstein and Switzerland.
- Secretariat: Geneva, Switzerland.
What is India- EFTA trade agreement?
- The India EFTA text is a broad-ranging agreement that is being negotiated between India and the four countries since 2008 to increase investment by these countries in India and reduce tariffs, on a range of exports from these countries.
- Trade and Economic Partnership Agreement (TEPA) is the the name of free trade negotiations between India and EFTA Countries.
- Over the past two decades, the total trade between the EFTA States and India has been growing steadily. In 2022, the combined EFTA-India merchandise trade surpassed USD 6.1 billion. The primary imports to the EFTA States consisted of organic chemicals (27.5%), while machinery (17.5%) and pharmaceutical products (11.4%), excluding gold, constituted the main exports to India.
Pharmaceutical Industry in India:
- Indian pharma industry is the third largest in the world by volume.
- India accounts for 60% of global vaccine production, making it the largest vaccine producer in the world.
- India accounts for 20% share in global supply of generic drugs by volume.
- The pharmaceutical industry in India is expected to reach $65 Bn by 2024 and to $130 Bn by 2030.
Growth drivers of the pharmaceutical industry in India:
- Government Support: PLI schemes to promote the production of high-value products in the country and increase the value addition in exports. Three bulk drug parks, located in Gujarat, Himachal Pradesh, and Andhra Pradesh should provide a consistent supply of bulk drug active components and will ensure India's drug security.
- Medical tourism: Quality services at marginal costs compared to US, Europe, and South Asia
- Infrastructure development: India has the highest number of US-FDA compliant plants outside the US.
- Strong drug manufacturing: Expertise in low-cost generic patented drugs as well as end-to-end manufacturing
- Strong domestic demand: Launch of the largest National Health Protection Scheme globally in the form Ayushman Bharat Yojna.
About Generic Drugs
- Generic Drugs refer to a medication that is equivalent to a brand-name drug product in terms of its active ingredient, strength, dosage form, and intended use.
- It is marketed either by a chemical salt or brand name. They have the same potency, quality, and implications and work in an identical manner as the branded medicine.
- India is the largest producer of generic drugs globally.
Need for generic drugs:
- Reduce Out-of-Pocket Expenditure: In India, around 94 million people are pushed into poverty due to expenditure on healthcare. About two-thirds of the expenditure is incurred on medicines.
- Accessibility, availability and affordability: It may become available once the patent on the brand-name drug expires. This allows for competition in the pharmaceutical market, which often results in lower prices for consumers. This makes generic medicines price 30% to 70% less than branded medicines.
- Effectiveness: It works in the same way as their brand-name counterparts. They have the same intended use and are equally effective.
- Rise in the number of fatal diseases: It has increased over the years and the cost of medicines for such diseases is very high.
Challenges to generic drugs
- Falsified and counterfeit drugs: Due to lack of transparency in the licensing procedures of Drugs, and lack of quality facility, it has resulted in the increased supply of low-quality, spurious and substandard drugs.
- Poor Quality drugs: In 2018, the Central Drug Standard Control Organization (CDSCO) identified nearly 4.5 per cent of all generic medicines in the domestic market to be substandard due to lack of testing facilities.
- Counterfeit products have entered the supply chain with severe consequences, as seen in Gambia and Uzbekistan.
- Doctors do not prescribe a generic drug due to their lack of trust in the quality available in the Indian market, which lacks scientific standards in India.
- Lack of resources and manpower: Drug control procedures in India suffer from a lack of resources and manpower. Widespread corruption within the system makes matters worse.
- Problem of naming a fixed-dose combination (FDC): Many fixed-dose combinations (FDCs) drugs contain even 8 or 9 Active Pharmaceutical Ingredients. To prescribe a generic name for each of the eight or nine ingredients is a very tedious and impractical task.
Government Initiatives
- Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP): To provide quality generic medicines at affordable prices. Prices of medicines sold through these outlets are 50-90% less than that of branded medicine prices in the open market.
- Free Drugs Service Initiative (FDSI) 2015: It was launched under the National Health Mission (NHM) on procurement of generic essential medicines at low prices, eliminating irrational medicines and unscientific fixed-dose combinations.
- Drugs Technical Advisory Board (DTAB) has recommended that retailers should maintain a separate rack/shelf solely for the storage of generic medicines sold in the proper name.
Way Forward
- Utilising anti-counterfeiting technologies for counterfeit drugs: Through imaging technologies, variable data printing of unique numbers or barcodes with speciality inks, including invisible inks, and with RFID.
- Strong regulatory framework: Strengthen and enforce regulations that ensure the safety, quality, and efficacy of generic medicines. Create a clear approval process for generic drugs to enter the market.
- Drugs Controller General of India need to work in close association with the pharmaceutical companies and local drug control authorities to combat the menace of counterfeit drugs.
- Research and Development Support: Provide grants or incentives to pharmaceutical companies to invest in research and development of generic versions of essential medicines.
- Pharmacy Incentives: Reward pharmacies for promoting and dispensing generic medications.
- API Sourcing: Ensure the sourcing of APIs from reputable and approved manufacturers, preferably those that adhere to Good Manufacturing Practices (GMP) to ensure the quality of drugs.