From: "D G Shah"
Subject: IPA Letter to African Group
Date: Tue, 3 Dec 2002

I forward herewith a letter that we sent yesterday to some African Missions in Geneva on TRIPS Council Deliberations on Paragraph 6 of Doha Declaration on TRIPS and Public Health. You may like to post this on IP-Health and other websites.


TRIPS Council Deliberations on Paragraph 6

I wonder if you would recall three days that we spent together in Stavanger (Norway) in July this year discussing issues related to the implementation of Paragraph 6 of Doha Declaration on the TRIPS Agreement and Public Health.

Since then you have been repeatedly told by Big Pharma and their agents that the Indian pharmaceutical industry is interested only in exporting their medicines to your country and that it has no intention of developing your capabilities, setting up local manufacturing and transferring technology to your country. They have also told you that the legal mechanism proposed by the US/EC combine would ensure development of indigenous pharmaceutical industry in your country.

As you know, the Government of India's position is of looking at the entire issue of TRIPS and Public Health as a humanitarian one and not of commercial interest. We are behind the African countries in their attempt to have a successful resolution of the issue. However, the existing flexibilities available under the Agreement should not be undermined by any new procedures that are evolved.

In this context, I would like to invite your attention to the following and leave you to draw your conclusion.

  1. Role of Big Pharma:

    1. Big Pharma have established sales/branch offices and have been importing their medicines in your country for several decades. They have captured up to 90 per cent share of your markets;
    2. But, they have not helped you in developing your own pharmaceutical industry;
    3. Not only they have not helped in the development of your pharmaceutical industry, but they do not want even the generic industry to enter your markets and help you do that;
    4. They are averse to competition not only from the affordably priced quality products of the Indian generic companies, but also from the generic companies of their own country. This explains the earlier position of the US/EC combine on the supplying countries;
    5. They want to sell even off-patent products at prices which very few can afford by warding-off entry/development of generic industry in your country; and
    6. They just do not sell technology. Not even of the off-patent products. They want to sell only products of their technology. Check, if you can find, any instance of their having sold any technology or know-how.

  2. Development of Indian Pharmaceutical Industry:

    Let me share with you experience of the development of the Indian pharmaceutical industry. In 1960s, the Big Pharma had, like in your country to day, close to 90 per cent of the market share. The Government of India then sought to purchase technology for some drugs and set up own manufacturing facility to tackle issue of access to affordable medicines. But, none of the Big Pharma companies was willing to sell technology. Finally, the then Soviet Union helped India in setting up a plant to manufacture life saving drugs in the country and a generic company from Italy offered the technology for some others. Thus, Indian pharmaceutical industry grew not with the support of Big Pharma but with the help of generic industry.

  3. Our Track Record: Now consider track record of the Indian Pharmaceutical Industry:

    1. They have registered companies (not just branch offices) in Africa, in some cases, with a local partner. But they have not yet overcome various entry barriers, including those created by the Big Pharma.
    2. The current size of operations and market share do not support indigenous production. It would only make the medicines costlier than supplying from the existing facilities;
    3. However, wherever the markets have justified, Indian companies have not shied away from setting up the local facilities with or without the local partners. The notable examples are of investments in China and Brazil, where more than one company have invested in local production, and Indonesia and some CIS states.
    4. The Indian companies have also helped and are helping in setting up new facilities with technical know-how and project management services in several countries, including the Middle-East.
    5. Intense competition is corner stone of the Indian pharmaceutical industry, which makes prices of its products affordable across the world.

    I would also like to mention here about two proposals that we wish to pursue with your Government through the Government of India. The Indian pharmaceutical industry is willing to offer:

    Both these initiatives can become corner stones of our mutual cooperation and land marks in the development of your health care system. To conclude, I can do no better than reproduce what Ms Rosa Whitaker, Assistant United States Trade Representative for Africa, wrote to you, with one modification:

    "Like you, I strongly believe that African countries should approach negotiations in Geneva based on their own interests- and not be party to US/EC combine position that run counter to regional development goals. You know best where the interests of your country lie."
    Looking forward to our continued cooperation,

    Yours sincerely,

    D G Shah
    Secretary General
    Indian Pharmaceutical Alliance
    Tel: 91-22-26 00 0632
    Fax: 91-22-26 00 0633