‘Specific duration’ clause in India-EFTA pact

Source-This post on ‘Specific duration’ clause in India-EFTA pact is based on the article “Thorny clause in ripening India-European Free Trade Association deal may hit generic drug industry” published in “The Hindu” on 13th February 2024.

Why in the News?

A ‘Specific duration’ clause in a free trade agreement draft being discussed between India and the European Free Trade Association (EFTA) may postpone access to affordable generic drugs in India for at least six years.

What does the draft say?

1. Specific duration– It states that within six months of the agreement being signed, signatories should include a “specific duration” during which drug applicants cannot use “undisclosed test data” to obtain market approval for at least six years.
Note– The “signatories” are countries, and the “applicants” are pharmaceutical companies. The “undisclosed test data” refers to information about the drug’s effectiveness and its effects on people.

2. Extension of Drug Coverage:
a. This specific duration rule should cover not just new chemical drugs but also a group known as biologics drugs, such as monoclonal antibodies and vaccine formulas.
b. These involve complicated combinations of organic and inorganic substances and are difficult to replicate.

What are the implications of this clause on India?

Make essential drugs unaffordable:
a. It will promote monopolization for foreign pharmaceutical companies as Patented drugs give the first inventor exclusive marketing rights for 20 years. It will make essential drugs more expensive in many countries, including India.
b. It would be a setback for the Indian generic industry, which is the third largest in the world and has resisted attempts by foreign pharmaceutical companies to extend patent monopolies.

Note- However, Indian law permits drug makers to produce and sell generic versions through compulsory licensing after just three years of patent issuance in India.

UPSC Syllabus- Indian Economy/International Relations