Intellectual Property Reform Must Be a Priority during Indian State Visit to U.S.??
Sep 25, 2014
Prime Minister Narendra Modi’s state visit to the United States in late September represents a new opportunity for both sides to improve their once fragile relations. For India, it is an excellent time to improve their poor international reputation for intellectual property (IP) protections, which in turn will attract more business to its market of 1.25 billion consumers.
If India is serious about improving its trade relations with the United States, any efforts must involve substantial improvements to Intellectual Property, especially in the Pharmaceutical sector, where a number of IP violations have attracted global attention and outraged international business leaders.
On numerous occasions, India has invalidated patents on innovative drugs held by foreign firms in order to allow local corporations to sell cheaper copycats. India has engaged in similar practices in other industries including IT and energy although it is most prevalent in pharmaceuticals. On average, new medicine in India faced copycats within one year 50% of the time and 85% of the time within 3 years.
However, without protection for intellectual property, the medicine that Indian companies are copying would never have been invented in the first place.
Prime Minister Modi, who is known for his pro-growth business policy represents the best hope for an Indian revival and is taking serious steps to attract foreign investment. Improving international perception on Intellectual Property Rights will be a key step to achieving reform, because of its importance to protecting and promoting innovation, and through this, creating economic growth.
At present, there is significant scope for India to improve on this issue – India was ranked 56th in IP rights in the 2013 edition of the International Property Rights Index, behind many other developing nations.
Reports indicate that India is beginning to take its global obligations to protect IP seriously, with officials agreeing to meet with American Pharmaceutical groups to discuss medicine IP protections during the visit to Washington.
John J Castellani, president and CEO of Pharma, expressed optimism that improving relations will help the issue to be resolved.
"We hope the government of India would be open to these discussions and demonstrate seriously India’s commitment to provide patients meaningful access to safe, effective medicines and protect intellectual property, which serves as the foundation for innovation across the globe”, he said in a statement.
While the move represents a step in the right direction, India has so far refused to make any commitments about improving its treatment of foreign firms. In doing so, it is continuing to reduce Indian citizen’s availability to innovative medicines.
According to a study by Professors Ernst R. Berndt and Ian M. Cockburn India’s IP policy is a major reason for a lack of product availability in India and is also a drag on the ability of the US to innovate. As a result, almost 25% of new medicine produced overseas is unavailable in India 10 years after its release.
It is not uncommon for Pharmaceutical companies to invest over $1 billion and 10 to 15 years to develop new medication. Firms undertake these extensive costs because they believe they will be able to recoup their investment, with patent law providing protection from counterfeiting for a period of time. However, IP policies that do not respect innovation, such as the one present in India, threaten to undermine the process of technological progress.
Progress on this issue is long overdue and if Prime Minister Modi is serious about improving U.S.-India relations, attracting foreign investment and growing the economy, he must address and improve his nation’s treatment of the medical industry by implementing Intellectual Property reform.