WTO Leaves Door Open for Generic Drug Manufacturing of Patented Pharmaceuticals in India

On August 29, 2003, a drugs pact backed by the United States was rejected by the World Trade Organization (WTO). The pact was meant to set limitations on the Doha declaration allowing poorer countries access to cheaper, generic medicines, including those covered by patents. The original agreement signed in Doha, Qatar, in November 2001 allows for necessary medicines to be generically manufactured by non-patent holding companies. Poor countries can then purchase generic forms of patented drugs from manufacturers in countries such as India.

With the rejection of the drug pact, the wait is finally over for Indian pharmaceutical companies. India is well positioned to exploit the generic drugs market and has been eagerly anticipating the decision of the WTO. The country possesses a significant competitive advantage in the areas of high-process development skills and low manufacturing cost base. Indian pharmaceutical companies manufacturing generic drugs are expected to make significant export gains as a result of the WTO ruling. Poorer countries which lack the capabilities of producing their own generic drugs can now turn to India to supply them these necessary pharmaceuticals.

According to US trade representatives, the US is willing to allow countries such as India to produce life-saving medicines and export them to poorer countries. However, precautions are being set up to ensure that these generic drugs are not smuggled back into developed nations and sold for huge profits.