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BW Businessworld

How USIBC Lost Pfizer, Roche

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Global pharmaceutical giants Pfizer and Roche have reportedly disassociated with the US India Business Council (USIBC) – a grouping of top global companies (mostly US) and leading Indian firms with interests in the US - after USIBC failed to toe the hard line position the drug companies wanted it to take against India.

While the multinational drug companies wanted USIBC to ask the US Trade Representative (USTR) to bracket India among the nations with the worst compliance level of intellectual property rights (IPR), USIBC took a milder position by arguing that India should not be penalised on an election year when a new government is about to take charge. Instead USIBC called for a long term engagement where these issues could be handled through bilateral discussions, a position which is closer to the official line taken by Indian officials.

The decision of the pharmaceutical companies is a clear indication that they wanted USIBC to act as an agency to support their own interests and not as a bilateral lobbying group that represents a balance of interests of both Indian and foreign multinational companies. The very fact that the US Chamber of Commerce – which solely represents the US interest groups – adopted the Pfizer-Roche position in its entirety makes it clearer.

Interestingly, USIBC had never renounced Pfizer’s or Roche’s position. It’s only their approach that was not supported. For instance, the agenda of USIBC for 2014-15 elaborates on the need to encourage Indian government to “appreciate that the unpredictability in their IPR regime is harmful to both foreign and domestic industry as well as to Indian patients”. “USIBC will vigilantly resist compulsory licensing, acknowledging that measures designed to allow government intervention should be for emergency situations only. USIBC will also continue to monitor and provide comments on GOI’s Draft Intellectual Property Rights Strategy and monitor developments in the interpretation of India’s Patents Act”, the agenda says.

Advocating for the linkage of granted patents to marketing approval, patent protection for incremental innovations, creation of a faster and more efficient judicial system, inclusion of noncompetition agreements in brown-field investments, separate regulatory framework for medical devices and resistance against expansion of price controls on medicines and medical devices  - all music to the ears of global drug majors due to the revenue potential attached to each of these measures - are among the USIBC agenda for the current year.

Further, it should be noted that it was not Indian pressure that resulted in the USIBC position. Several US industry majors are known to have taken a stand that was not in line with the Pfizer-Roche argument.

The development should also been seen in the context of India’s repeated statements that the country’s laws including the ones that government IPRs such as patents and copyrights, are complied with its World Trade Organisation commitments. India maintains that the IPR requirements sought by companies such as Pfizer go beyond such international commitments and are against the interest of making life saving medicines available at affordable costs to millions of poor within the country and in the developing world.

The lesson from the Pfizer-Roche decision is simple: It is high time the Indian companies companies scrutinise the advocacy positions taken by advocacy groups such as USIBC where they are part of, more closely. It need not always be a balanced approach.

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