Wednesday, 10 May 2017

Role of MNCs in influencing Indian Foreign policy ... The case of drug corporations (Pharma. sector)
       Multinational companies have an undue influence over the making of global trade rules at multilateral institutions such as World Trade Organization (WTO). Big business lobbyists have privileged access to government policy-makers and use it to push agreements that undermine the fight against poverty. This case highlights example of privileged corporate access to, and excessive influence over, the WTO policy-making process, pressure tactics on Indian government by Foreign MNCs through lobbying at ministerial levels to change its policy in order to make it more suitable for Multinational Corporations.
      Trade Related Aspects of Intellectual Property Rights (TRIPS) is administered by WTO. The importance of the TRIPS stems from the fact that it lays down minimum standards that the member countries need to provide to protect intellectual property (IP). TRIPS was a result of intense lobbying by developed countries like US and Japan, who wanted to have uniform standards for the protection of IP, throughout the world, primarily to protect the interests of innovator drug companies. (Gokhale G, 2015)  Under TRIPS, if a member country does not adhere to its obligations then another member country can lodge a complaint with the Dispute Settlement Body (DSB) of the WTO. In the context of WTO negotiations on intellectual property, PhRMA, a US drug industry group whose members include Pfizer and Merck, waged a comprehensive lobbying campaign in India that helped push through a new WTO-compliant patent law in 2005. Drug industry representatives lobbied the Indian prime minister’s office and used their easy access to government officials to put pressure on the Indian government to bring in the new law. There is  fear that it will deny AIDS treatment to up to 350,000 people who depend on low-cost Indian drugs worldwide as 90% of the 11 million people living with HIV/AIDS in developing countries are on generic drugs, most of which come from India.
      Senior officials from Pfizer, the world’s largest drug company, negotiated directly with the director-general of the WTO and officials from WTO member states in 2003 to block a proposal from developing countries that would allow them to import cheaper copies of patented drugs during public health emergencies, including the HIV and AIDS pandemic.(Spinwatch Report, 2006) Although the agreement reached allows countries in theory to import copies of drugs during health crises, relentless and sometimes aggressive lobbying by the drug multinationals helped ensure the process of compulsory licensing. The drug lobby also helped to make sure the WTO’s agreement on intellectual property means key countries that are able to manufacture cheaper copies of patented medicines – including Brazil, India and Thailand – are only permitted to do so under compulsory license. This is in spite of the fact that large numbers of people in poor countries suffering with conditions such as HIV and AIDS rely on cheaper drugs from these countries for treatment.
         The global drug industry’s biggest victory so far under the new WTO TRIPS regime came when India enacted a new patent law in spring 2005. The TRIPS Agreement requires governments to align their national policies with WTO rules by January 2005. The pharmaceutical giants wanted India’s 30-year old Patent Act consigned to history, and to use the opportunity of new national legislation to limit some of the flexibilities built into TRIPS that they had not managed to block at the WTO level. The old law allowed Indian companies to manufacture brand name drugs, keeping prices substantially lower than in the developed countries, and it led to the rise of a strong local generic drug industry. By the 1990s, the Indian pharmaceutical industry had become a world leader, supplying life-saving medicines to African countries battling the AIDS epidemic at a very low cost. Indian drug companies are widely credited for lowering the prices of ARV drugs in Africa from more than $10,000 to about $300 per person each year.(Eagleton D, 2006)
      Even though India had 10 years to comply with the TRIPS Agreement after its introduction in 1995, pharmaceutical firms wanted India to guarantee them stronger intellectual property protection in a shorter timeframe. On behalf of its pharmaceutical industry, the US kept up the pressure on India by filing a complaint to the WTO in1997, stating that India was failing to comply with its obligations under the TRIPS Agreement. The US also kept India on its ‘Section 301 list’ and threatened the country with trade sanctions.
      Senior US officials were adept at pulling strings in New Delhi on behalf of the industry, and PhRMA acknowledged their support in a Section 301 petition, submitted to USTR in 2004: “The high-level Indo-US dialogue on intellectual property issues has helped to improve the patent climate in India...In particular, PhRMA members would like to commend Under Secretary of Commerce Kenneth Juster and the Indo-US High Technology Cooperation Group (HTCG), as well as the efforts of Assistant USTR Ashley Wills and the US Embassy in New Delhi. We appreciate continuing efforts to ensure that Indian law is fully compliant with TRIPS obligations by January 1, 2005.” (S. Krudy, 2006)
      The drug companies themselves waged a comprehensive lobbying campaign to change the Indian patent law. Industry representatives lobbied the Indian prime minister’s office and used their easy access to the US-India High Technology Cooperation Group (HTCG), an inter-governmental body set up to facilitate cooperation between businesses in the two countries, to put pressure on the Indian government. Ken Juster, one of the US officials PhRMA thanked in its 2004 Section 301 report, is a co-chair of the HTGC and Susan Finston, PhRMA’s associate vice president for intellectual property, attended an HTCG meeting. The drug multinational Glaxo Smith Kline publicizes its efforts to increase access to essential medicines in poor countries. At the same time, it is an influential member of the Pharmaceutical Research and Manufacturers of America (PhRMA), which lobbies aggressively for WTO rules and national laws that restrict people’s access to low-cost drugs in developing countries. According to Columbia University professor Jagdish Bhagwati, the Agreement primarily benefits big business: “TRIPS does not involve mutual gain; rather, it positions the WTO primarily as a collector of intellectual property-related rents on behalf of multinational corporations.” (J. Bhagawati, 2000)
      In response to pressure from the US and its drug companies, as well as lobbying from Indian business groups and elements within the Indian government, the Indian parliament amended India’s patent law in March 2005. The new Indian Patents Act does not make maximum use of flexibility in the TRIPS Agreement, and actually contains stronger intellectual property protection than the WTO requires, known as ‘TRIPS-plus’ provisions. In other words, the act was used by the US and the pharmaceutical industry to regain ground they had been forced to give to developing countries in the WTO.
      Developing country governments, civil society groups and patients’ rights organisations, as well as the Indian generic drug industry, had warned that the new Act could have devastating effects on India’s five million HIV patients and on people living with HIV in other poor countries. Critics say the new law will:
Ø  Severely limit the ability of the Indian generic drug industry to produce the next generations of ARVs, making them prohibitively expensive
Ø  Deprive patients in other developing countries of low-cost drugs.
 According to the aid group Médecins Sans Frontières also known as ‘Doctors without Borders’, an estimated 350,000 people on AIDS treatment depend on Indian generic production worldwide – around half of all people on ARVs in developing countries. A study by Medicines Sans Frontières predicted that the new generation of anti-AIDS drugs could cost up to 12 times more in sub-Saharan Africa, and cited a lack of competition and the new India Patents Act as reasons for the projected price differences between the first- and second-generation lines of ARV drugs. (Médecins Sans Frontières Report, 2005) It has generated fear in other developing countries, especially in Africa, where many people are likely to be affected by it. News accounts report there were public protests against the Indian laws in countries that rely on Indian generic drugs, including in Kenya, Tanzania and Uganda. (BBC News, 18March 2005)
      Multinational drug companies are now lobbying through PhRMA for a further amendment to India’s patent law to include ‘data exclusivity’. This would mean generic drug firms are denied access to information needed to make drugs, further crippling their ability to produce cheaper products. According to Dr. Vineeta Gupta, an Indian physician and human rights lawyer “Data exclusivity, in combination with the new Patents Act, can result in absolute monopoly in pharmaceuticals which would further affect the production of generic medicines. PhRMA has spent nearly $132 million lobbying Congress since 2008 and ranks 5th among the top spenders in Washington, according to the Map Light campaign finance database.  Alliance for Free Trade with India AFTI spent a total of $240,000 on lobbying Congress and the State Department in 2013 and 2014. The group exclusively hired lobbyists with the firm Akin Gump, which provides lobbying and legal services on international trade, intellectual property and other issues.
      As per the news report lobbying records confirmed that "intellectual property" and "market access" issues related to trade with India have been among the organization's top issues when lobbying Congress, the White House and the Department of Commerce. PhRMA is a member of the AFTI, a coalition of manufacturers ranging from the music recording industry to agrichemical companies that also have gripes with India's intellectual property laws. In the days before Modi's visit, AFTI sent a letter to Obama urging the president to push Modi on economic and intellectual property reforms. This resulted in commitment from Mr. Modi during bilateral visit with Obama to establish an intellectual property working group at the US-India Trade Policy Forum.(TruthOut report,2014)  In 2013, top officials from a number of US drug makers such as Pfizer, Mylan and Merck met the Department of Industrial Policy & Promotion (DIPP) Secretary to lobby against use of compulsory licences by India. The delegation, organised by the US India Business Council (USIBC), also tried to dissuade the Government from putting in place restrictions on foreign direct investment in pharmaceuticals and urged it to enforce stricter intellectual property rules. The Indian Patent Office allowed Natco to sell the copied version at Rs. 8,800 for a month’s treatment compared to Bayer’s version priced at Rs. 2.8 lakh making treatment affordable to thousands of patients afflicted with kidney cancer. It created strong discontent among US and European drug manufacturers.(The Hindu Businessline, 23october 2013)
       The US lobby groups put pressure on India through congress lobbying. Akin Gump and its employees top the list of 2014 contributors to Sen. Ron Wyden's (D-Oregon) campaign committee, with $61,533 in total donations, according to the Centre for Responsive Politics (CRP). Akin Gump also donated nearly $20,000 during the 2012 cycle, and the drug company Amgen Inc. and its employees donated $26,000 in 2014. Wyden is a member of the Senate Finance Committee US, and is one of four members of Congress who helped put mounting diplomatic pressure on India by requesting the International Trade Commission to launch a special investigation into India's trade policies in 2013. As Prime Minister Modi arrived in Washington in late September 2014, Wyden and his allies filed another request to the commission demanding a second investigation into "India's trade policies that discriminate against US trade and investment" to build on the first. (PQ Portland blog, 2014)
      Joining Wyden in the request was Finance Committee Chairman Sen. Orrin Hatch (R-Utah), who received $341,600in campaign contributions from pharmaceutical manufacturers since 2008 - more than any other member of Congress. Si)nce 2012, Hatch's campaign war chest has received more than $105,800 from Merck, $117,000 from Amgen and $44,000 from Pfizer. (The European AIDS Treatment Group report, 2014) The out-of-cycle review of India's trade policy came only months after the US Trade Representative once again placed India on its "priority watch list" of countries of concern in its annual Special 301 Report on the intellectual property regimes of US trading partners. Both moves amount to the threat of economic sanctions, according to Health GAP and Doctors Without Borders. Since 2013, Camp has received $15,000 in donations from the political action committees associated with Amgen, Eli Lilly and Pfizer. Levin receives support from several health care firms. Since 2012, Paulsen has received $94,000 in campaign contributions from pharmaceutical manufacturers, according to MapLight and the CRP. During During Modi’s US visit, the CEOs of Merck and other drug companies pressed Modi on India's patent laws during a breakfast meeting with US businesses leaders.       
        To conclude, we can say that big pharma corporations from developed countries put very strong pressure on developing countries like India to formulate laws that would benefit corporations for maximization of profits despite understanding its implication on lives of poor people in developing countries. Ability of state to take decisions independently has been clearly challenged by MNCs. Multilateral forums represented by state representatives are being used by big corporates to negotiate or pressurize smaller states to change their policies in order to make it suitable for corporates. Developing or under developed  nations get easily  trapped into pressure tactics of developed wold and are compelled to take decisions as per  the demands  and needs of big corporates. Money and influential power of the corporates has been growing day by day challenging state decisions.   
It is necessary to put the needs of poor people above those of multinational corporations. Therefore the access to MNCs in world multilateral platforms such as WTO should be restricted or regulated properly. Practice of companies advocating policies that damage human rights and the environment, or from blocking legislation designed to protect the same should be stopped.  Countries should enhance democratic scrutiny of the policy making process, reduce the corporate sector’s excessive influence policy making over sensitive area such as pharma sector and should improve the quality of decision-making by not coming under any pressure and taking decision as independent as possible in order to serve the national interest.


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