US based drug makers lobby group Pharmaceutical Research and Manufacturers of America (PhRMA) has complained that the positive signals given by India in terms of greater intellectual property protection and market access opportunities are yet to translate into real policy actions and practical changes.
In its annual submission to the United States Trade Representative (USTR), PhRMA highlighted unpredictable patent environment, regulatory data protection failures, high tariffs and taxes on medicines, discriminatory and nobn-transparent market access policies, and unpredictable environment for clinical research as the key challenges before US companies that operate or wish to tap the Indian market.
The lobby group wants India to remain on the Priority Watch List in the 2018 Special 301 Report of USTR until India addresses their concerns.
While acknowledging India's new National IPR (intellectual property rights) policy, PhRMA wanted the country to lay greater stress on effective and meaningful IP protection and enforcement mechanisms. "Implementation of the National IPR Policy should include a consultative process with relevant stakeholders and meaningful reforms to India's IP policies that lead to improvements in IP protection and enforcement for medicines", it states.
On tariff barriers, PhRMA states that its member companies operating in India face high effective import duties for active ingredients and finished products. "Though the basic import duties for pharmaceutical products average 10 ten percent, due to the Integrated Goods and Service Tax imposed on imports, the effective import duty can exceed 20 per cent. Moreover, excessive duties on the reagents and equipment imported for use in research and development and manufacture of biotech products make biotech operations difficult to sustain. Compared to other Asian countries in similar stages of development, import duties in India are very high. And while certain essential and life-saving medicines may be granted exemptions from some of the taxes, the eligibility criteria are vague and subject to constant revision and debate", they point out.
The submission also refers to the WTO Pharmaceutical Agreement because of which the United States and 33 other signatory countries do not impose any import duties on a wide range of medicines and other health products."However, biopharmaceutical innovators in the United States do not benefit from the same access to China, India and other emerging economies that are leading producers and net exporters of drugs and active pharmaceutical ingredients but are not parties to the WTO Pharmaceutical Agreement," it notes. Stating that United States is by far the largest market for Indian generic drug exports, it said that India's basic import duties on biopharmaceutical products and active ingredients average about ten percent. Additional duties and assessments can raise the effective import duty to as high as 20 per cent or more, it adds.
The Special 301 review is an annual exercise of the USTR to address market access and intellectual property barriers that harm US trade interests. Countries with significant IP concerns for US companies are placed in the Priority Watch List.