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India insists its intellectual property rights are compliant with global laws, including the World Trade Organisation (WTO).
The US imposes trade sanctions after a country is included into the “Priority Foreign Country”.
The US Trade Act defines a Priority Foreign Country is the worst classification given to those which deny adequate and effective protection of intellectual property rights (IPR) or fair and equitable market access to the US persons relying on IPR protection.
Officials in New Delhi have said the demands of the US industry are “completely wrong”.
“If the US does that, then India probably will have no option but drag them to the WTO’s dispute settlement mechanism,” an official said.
A low-level trade war between the two largest democracies has been long simmering.
US pharma companies had objected to India’s move to issue a compulsory license in 2012 to India-based Natco Pharma to manufacture and sell cancer-treatment drug ‘Nexavar’ at a price over 30 times lower than charged by patent-holder Bayer Corporation.
The German drugmaker Bayer had sought to block the entry of Natco’s generic version of Nexavar, which the Indian firm has been told to sell at 8,800 rupees ($160) for a monthly dose.
The USITC has raised this issue besides the rejection of patent to Bristol-Myers Squibb’s Sprycel and Novartis’ Gleevec. It has stated that Indian IPR laws are not Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant under the WTO.
In India, generic medicines account for more than 90 per cent of sales.
Swiss pharma major Novartis AG had lost a legal battle for getting its blood cancer drug Gleevec patented in India and to restrain Indian companies from manufacturing generic drugs. India’s top court had rejected the multinational company’s plea last year.
The US International Trade Commission (USITC), a quasi-judicial federal American agency, has already initiated an investigation against India’s trade and investment policies.
It has alleged that New Delhi’s laws discriminate against the American companies.
“The country’s IPR (intellectual property rights) laws are fully compliant with WTO. If America has any issue with our laws, they can raise that in the WTO,” an Indian official was quoted by Press Trust of India.