EU trade deals risk affordability of generic medicines for Global South

This article was originally published in Politico. You can read it here.


India has long been known as the “pharmacy of the world,” producing generic medicines at prices that other developing countries and global institutions can afford. The country was the single largest supplier of pharmaceutical products to Africa in 2018, and accounted for a fifth of the continent’s pharmaceutical imports.

However, as the European Union now negotiates free trade agreements with India and Indonesia — another major generics-producing nation — the bloc’s been proposing far stricter protection of intellectual property rights. And such protection could threaten the affordability of generic medicines these countries export to the Global South.

It’s vital we remember the lessons of the HIV and AIDS pandemic. It was the influx of affordable generics from India that helped drive down the price of treatment from over $10,000 to under $100 per year, saving countless lives. But India’s thriving generics industry could only do this because these medicines were developed before it had to implement the 1995 World Trade Organization (WTO) agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS was based on the promise to increase innovation and social benefits for all. However, it instead tipped the balance in favor of the pharmaceutical industry’s commercial interests, and away from access to affordable medicines. For example, the development of a range of long-acting HIV prevention and treatment medicines could be transformative in advancing the end of AIDS — but this can only happen if those medicines are made widely available at low prices through large-scale generic production.

This issue came to a head during the COVID-19 pandemic when, after relentless pharmaceutical industry lobbying, the EU and other wealthy countries blocked India and South Africa’s proposal to temporarily waive some TRIPS obligations for COVID-19 medical products.

Interestingly, the European Commission does appear to recognize that overly restrictive intellectual property rules can be harmful. It recently proposed a seismic package of reforms to pharmaceutical and intellectual property regulations — seemingly an attempt to wrestle back some balance between such restrictions and access to medicines in Europe.

The Commission is right to do this for its citizens’ health, and the lesson applies to other parts of the world too. However, in trade agreements, the bloc has continued to pressure developing countries to include disproportionate intellectual property protections that go far beyond the TRIPS agreement.

For example, in negotiations with Indonesia, the bloc proposed an extensive intellectual property enforcement regime that could adversely impact access to medicines. It has also sought to extend the duration a pharmaceutical producer is granted a patent monopoly and expand exclusive rights to data, both of which would delay the marketing of affordable generic versions.

We already know from previous experience that such proposals — known as TRIPS-plus — can have devastating consequences for access to medicines.

In Jordan, for instance, between 2002 and 2006, the less expensive generic alternatives of 79 percent of medicines were delayed by data exclusivity, threatening the financial sustainability of government public health programs. Similarly, Guatemalans found themselves unable to access medicines readily available in most countries at affordable prices, as Guatemala is bound by data exclusivity clauses in its free trade agreement with the United States.

The cost burden of these restrictions can be devastating. In Colombia, data exclusivity increased the public health system’s costs by $396 million between 2003 and 2011. Meanwhile, in 2006, the Korean National Health Insurance Corporation calculated that a four-year patent term extension would cost 722.5 billion won — the equivalent of $757 million at the time.

These provisions have been repeatedly denounced by human rights experts.

The U.N. Special Rapporteur on the Right to Health proposed that “developed countries should not encourage developing countries to enter into” free trade agreements with TRIPS-plus measures, and that they should “be mindful of actions which may infringe upon the right to health.” In the same vein, as U.N. system leaders, we supported a 2016 report acknowledging governments’ limited policy space to enact actions regarding access to medicines due to TRIPS-plus measures in trade deals, which undermines their ability to protect the human right to health.

The European Parliament has similarly recognized the importance of medicines as global public goods, and it has repeatedly called on the Commission to exclude TRIPS-plus requirements in trade negotiations — much like in its 2021 resolution to ensure all HIV antiretroviral treatments are affordable.

A sustained, affordable supply of generic medicines is essential for health — as well as for preventing the next pandemic. Yet, the stricter intellectual property rules EU negotiators propose for India and Indonesia would undermine — and even thwart — access to affordable medicines in developing countries.

India’s negotiators note they’ve “firmly communicated” that data exclusivity and patent term extensions are “redlines” for them in these negotiations. But the EU should never have demanded such changes in the first place.

EU negotiators should drop TRIPS-plus proposals, and entirely avoid them in future negotiations with developing countries. The world’s supply of generic medicines is a lifeline for the Global South — and this is more important than the profits of a handful of companies.