India going harder : India may ask exporters to boycott KLM to deter EU for holding up drug cargo

Even as the Indian government is planning to file a complaint with World Trade Organisation (WTO) against the European Union (EU) on the issue of seizure of Indian drug shipments at EU ports, the government is also exploring other options to pressurise the EU nations to change the patent laws, amended some time back, to make them more stringent.


According to pharmabiz sources, the Union Commerce Ministry is contemplating to motivate the pharmaceutical exporters in the country not to send their cargo through KLM Airlines of Netherlands as a retaliatory measure against that country. It may be noted that Netherlands has been one of the EU countries which has been seizing Indian drug shipments at its ports on charges of counterfeit/patent infringement. For instance, the customs authorities at Rotterdam in the Netherlands had some months back seized shipments of the generic drug losartan, which was manufactured in India and was in transit to Brazil. Losartan, indicated to treat high blood pressure, is not under patent protection either in India or Brazil.


Due to its competitive prices, most of the Indian pharmaceutical exporters have been using the services of KLM Airlines to send their cargo to Latin American and African countries. As the volume is quite large, if the Indian pharmaceutical exporters take the retaliatory measures in this regard, it will be a huge loss to the Netherlands company, sources said.


The Indian government's contemplation in this regard comes in the wake of near total collapse of all efforts at different international forums to find an amicable solution to the nagging issue. The entire issue was triggered last year when the EU countries began implementing local patent rules rigidly some months back. These EU rules stipulate that any product patent that has been granted in EU countries, if being transported through their countries, is also liable for confiscation under their patent law.


Though the country had engaged in hectic negotiations at different international forums during the last several months to find an amicable solution to this vexed issue, there have been no desired results with no abatement in the seizure of Indian drug shipments at different EU ports. There were several instances of seizures by EU/US Custom authorities of the Indian generic medicines in transit to various developing countries in Latin America and Africa on the grounds of counterfeit/patent infringement, patent litigations in US courts, etc.


The government so far failed to cut much ice with the EU authorities in relaxing regulations on patent and trade mark issues so that at least the drug shipments on transit cannot be seized at the EU ports on charges of counterfeiting and patents infringement. Though the government had provided data of Indian drug shipments which were seized at EU ports, the EU authorities have so far defended their action.

India again raises issue of seizure of generic drugs by European nations at World Trade Organization (WTO)

Three consignments of Indian-manufactured generic medicines – seized last year while in transit in the EU – have been earmarked for destruction by EU authorities.

These consignments – of clopidogrel, rivastigmine and olanzapine – were being exported from India to other developing countries to treat patients with serious and life-threatening conditions such as heart attacks, strokes, Alzheimer's disease, Parkinson's disease and psychosis. Yet they were seized by Dutch customs authorities on the basis of alleged patent infringement.

Although these medicines are not under patent in India or in the destination countries, EU customs legislation still permits the destruction of these life-saving medicines. A humanitarian organisation, Médecins Sans Frontières (MSF), has highlighted several other recent cases of generic medicines in transit in the EU that have been detained, seized or destroyed.

According to Pharmexcil, companies whose consignments also ran into similar trouble (other than as listed below) include JB Chemicals and Pharmaceuticals Ltd, Medico Remedies Pvt. Ltd, Titan Pharma India Pvt. Ltd, and Mission Pharmaceuticals Ltd, all based in Mumbai, and Hyderabad-based Sainor Pharma Pvt. Ltd.

Listed below are the consignments of Indian companies that were seized on grounds of patent infringement by the Dutch customs authorities.

1.15.10.08: Ind-Swift Laboratories Ltd (Clopidogrel Bilsulphate- API): Destined for Columbia
A consignment valued at some $100,000 (Rs 49 lakh) of Ind-Swift in transit for Venezuela was seized in November by customs authorities in the Netherlands under suspicions of being counterfeit.

The product was the generic drug Pantoprazole, used for treating ulcers, in the form of pellets that were to be filled in capsules and sold in Venezuela, where Ind-swift has marketing rights for it.

2. 27.11.08: Cipla Ltd, through Uni World Pharma Ltd, Dubai
(Olanzapine 10 mg Tabs): Destined for Peru.
3. 27.11.08: Cipla Ltd, through Uni World Pharma Ltd, Dubai
(Rivastigmine 3 mg Tabs): Peru.
4. 24.12.08: Dr Reddy’s Laboratories Ltd (Losartan - API): Destined for Brazil

A DRL shipment of the generic version of losartan was seized in transit in the Netherlands. This shipment, on its way to Brazil, was held by the customs authority at Rotterdam, which said it infringed the patent of the original drug-Cozaar. Losartan is not patented in India or Brazil. The patent for Cozaar in the Netherlands is held by DuPont, while US-based pharma multinational Merck and Co. holds the marketing rights."

5. A consignment of HIV/AIDS medicines by Aurobindo Pharma Ltd meant for use in Nigeria was seized by Dutch officials. The grounds on which they were allegedly seized again is that they contained counterfeit goods.

Concerned over the continued seizure of generic drug consignments at different European ports on charges of counterfeiting and patents infringement, India has once again raised the issue at the WTO seeking the world body's intervention to ask the European Commission (EC) to urgently review the EC Regulation 1383/2003 and the actions of the national authorities based on the Regulation, and bring them in conformity with the letter and spirit of the TRIPS Agreement.

Even though the Indian government had raised the issue at the WTO's last meeting in March this year, the seizure of Indian drugs destined for other developing countries continued at EU ports. On May 5, a shipment of a generic antibiotic, Amoxicillin, manufactured in India and destined for a least developed country, the Republic of Vanuatu in the Pacific, was seized by customs officials, while in transit through Frankfurt, Germany.

Amoxicillin is an essential medicine used to treat a wide range of bacterial infections. The consignment worth approximately 28,000 Euros consisted of 3,047,000 tablets of Amoxicillin (250 mg), equivalent to 76,000 courses of treatment. The seizures were made on grounds of alleged trademark violation although GlaxoSmithKline (GSK) has confirmed to the German authorities that GSK is the former patent holder for 'Amoxil', a brand name for amoxicillin. Seeking WTO intervention on the issue, the Indian representative at the WTO said that there seems to be no valid reason for detaining these medicines especially since the name 'Amoxicillin' is an international non-proprietary name (INN).

Seizures have continued to take place at EC ports. The multitude of allegations and the spread across several EC ports, imply an emerging pattern to disrupt and create barriers to legitimate trade of generic drugs and to challenge the Doha Declaration on Public Health. The basic principle of transparency of procedures has also been violated by the inability of the authorities to share and explain the specific cause of action under EU regulations.

"EC has sought to justify the action of customs authorities to control goods in transit suspected of infringing IPRs as a means to stop traffic of potentially dangerous products, such as fake medicines, even when the shipments were destined for any country. It seems that it has been ingrained very deeply within the EC authorities that IP violative products are synonymous with potentially dangerous substances," the Indian representative said at the WTO.

Widespread and repeated seizures have an adverse systemic impact on legitimate trade of generic medicines, South-South commerce, national public health policies and the principle of universal access to medicines. The importance of generic drugs to public health in developing countries and particularly in the LDCs is obvious. Such barriers to legitimate trade of generic drugs will also seriously impair the efforts of civil society organisations engaged in providing medicines and improving public health in the least developed parts of the world.

It is ironical that while on one hand WTO has taken steps to promote access to affordable medicines and remove obstacles to proper use of TRIPS flexibilities, on the other hand some members seek to negate the same by seizing drug consignments in transit and creating barriers to legitimate trade, the representative said.