Challenges of India and Europe FTA – Brave new world

Source: The post Challenges of India and Europe FTA has been created, based on the article “Brave new world: India must invest in fundamental research to develop reliable drugs” published in “The Hindu” on 17th February 2024.

UPSC Syllabus Topic: GS paper 2- International Relations- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

News: The article discusses the challenges in the free trade agreement between India and EFTA, focusing on intellectual property rights and data exclusivity in the pharmaceutical industry.

What is the main issue in the India– European Free Trade Agreement (EFTA)?

Intellectual Property Rights: In the India-EFTA Free Trade Agreement, a major issue is the management of intellectual property rights in the pharmaceutical sector. This has been a persistent challenge since the discussions began in 2008, with both sides striving to find a middle ground.

Patenting: The agreement grapples with the concept of patenting, where drug originators are granted exclusive rights for a certain period. This practice is counterbalanced by the ability of governments to enforce ‘compulsory licensing’, which allows them to override these monopolies in the interest of public health.

Data Exclusivity: A critical point of debate is data exclusivity, which protects the clinical trial data of drugs for a minimum of six years. This provision, if included, could greatly affect India’s pharmaceutical industry, renowned for its export of affordable drugs. India has shown resistance to incorporating data exclusivity into the agreement.

High Cost of Drug Discovery: The negotiations are underscored by the high cost of drug discovery, a factor that drives the divide between original drug inventors and generic drug manufacturers. The expense of developing new drugs contrasts sharply with the lower costs of producing generic versions, highlighting a fundamental tension in the global pharmaceutical industry.

For information on India- European Free Trade Agreement (EFTA) read Article1 and Article2

What is India’s position in the negotiations?

1. India’s position in the negotiations focuses on rejecting the concept of data exclusivity. This stance is rooted in protecting its significant pharmaceutical industry, especially its role as a major exporter of affordable drugs.
2. The country recognizes the need for balance between protecting drug patents and ensuring access to affordable medication.
3. India’s experience with COVID-19 vaccine development highlights its capability in drug innovation, reinforcing its push for a more flexible intellectual property regime in the Free Trade Agreement.

Way forward

To secure its pharmaceutical future, India must invest more in fundamental research and ethical drug trials. This will enable the development of new drugs and therapeutics domestically. The successful creation of COVID-19 vaccines in India serves as a model for this approach.

Question for practice:

Examine the key challenges and India’s stance regarding intellectual property rights and data exclusivity in the India-European Free Trade Agreement (EFTA), particularly within the pharmaceutical sector.