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GATT ITS IMPACT ON INDIAN PHARMACEUTICAL INDUSTRIES:

GATT ITS IMPACT ON INDIAN PHARMACEUTICAL INDUSTRIES Presented by: ROMESHCHAURASIA M.PHARMA (PHARMACEUTICS)-1 st year I.T.S Paramedical College-Ghaziabad(UP) Contact-09454948624

GATT:

GATT GATT: General Agreement on Tariffs and Trade, formed at Geneva round in 1947 with 23 countries as founding members. GATT is simply an independent multi lateral treaty between member countries, in which the agreed rules has been laid down for “Promoting International Trade”. Under GATT 8 rounds of negotiation took place between member countries –aimed at reducing TARIFF AND NON TARIFF TRADE BARRIERS.

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These 8 rounds can de divided into 3 phases : First Phase- Place/name Year Duration Countries Subjects covered Achievements Geneva (Switzerland) 1947 7 MONTHS 23 Tariffs SIGNING OF GATT, TARIFF CONCESSION Annecy (France ) 1949 5MONTHS 13 Tariffs TARIFF CONCESSION Torquay (England) 1951 8 MONTHS 38 Tariffs TARIFF CONCESSION Geneva 1956 5MONTHS 26 Tariffs TARIFF CONCESSION

Second Phase-:

Second Phase- Place/name Year Duration Countries Subjects covered Achievements Geneva Dillon Round 1960-1961 5 MONTHS 26 Tariffs TARIFF CONCESSION Geneva Kennedy Round 1964-1967 11 MONTHS 62 Tariffs TARIFF CONCESSION Geneva Tokyo Round 1973-1979 74 MONTHS 102 Tariffs, non-tariff measures. TARIFF CONCESSION

Third Phase-:

Third Phase- Place/name Year Duration Countries Subjects covered Achievements Uruguay Round (South America) 1986-1994 87 MONTHS 123 Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc GATT not only deals with trade of goods but also cover new areas such as: a)TRIPS b)GATS c)Textiles and Clothing d)Agriculture e)TRIMS f)An agreement on creation of WTO

What led to formation of GATT?:

What led to formation of GATT? Need to rejuvenate industry. To prevent polarization of countries and to provide due opportunities to under developed and developing countries to participate in World Trade. To remove Tariff and Non tariff trade barriers.

WTO(World Trade Organization):

WTO(World Trade Organization) After Uruguay round ,final act was signed at Marrakesh in Morocco On 15 th April 1994. Act entered into force On 1 st Jan 1995, And the “ GATT has Matured into the Adult,W.T.O ” WTO members are automatically bound by all WTO multilateral trade agreements.

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WTO - FACT FILE Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 123 countries participating in the Uruguay Round negotiations Today, 153 Members and 30 observer governments Functions: Implementation of WTO trade agreements Providing Forum for trade negotiations Resolving trade disputes Monitoring national trade policies Cooperation with other international organizations Main function is to ensure trade flows as smoothly, predictably & freely as possible. Thus Heart of the multilateral trading system.

Differences GATT / WTO:

Differences GATT / WTO GATT only a treaty (no institutional basis) trade of goods free adherence to agreements dispute settlement system inefficient WTO a real and permanent international organization trade of goods, services, intellectual property rights multilateral trade agreements binding all members an integrated and efficient dispute settlement system

The TRIPS Agreement: “Trade-Related Aspects of Intellectual Property Rights” (1994):

In becoming Members of the WTO, countries undertake to adhere to the specific agreements annexed to the Agreement establishing the WTO. Of these agreements , TRIPS is expected to have the greatest impact on the pharmaceutical sector and access to medicines. The TRIPS Agreement introduced global minimum standards for protecting nearly all forms of intellectual property rights (IPR). Protection for IPR on global basis has been ensured ,by bringing in uniformity of Patent laws amongst member countries. Provision for Exclusive marketing has been allowed. The TRIPS Agreement: “Trade-Related Aspects of Intellectual Property Rights” (1994 )

Before TRIPS: diversity:

Before TRIPS: diversity Patents granted either for pharmaceutical products, or for pharmaceutical processes , or both,(but in India only process patent ) Patent term protection varied from 5 to 20 years (but in India 14 years) Developed unhappy on trading with developing or least developing countries(LDC). Exemption to Exclusive marketing rights(EMR)and compulsory licensing.

After TRIPS: uniformity:

After TRIPS: uniformity Patents must be available in all WTO Member States for pharmaceutical products and processes. Minimum duration of 20 years from the filing date Provision of Exclusive Marketing Right(E.M.R) has been allowed. Obligatory for all members of the WTO. A certain amount of flexibilities in its provision ,to take effective steps to meet the health care needs for Member States. Compulsory licences are conditional.

Application of TRIPS:

Application of TRIPS The TRIPS Agreement provides transition periods , permitting developing countries additional time to bring national legislation and practices into conformity with TRIPS provisions. 1996 in developed countries 2000 in developing countries in general 2005 in developing countries using the transitional period like India 2006 in least developed countries (LDC) 2016 extension given by Doha for LDC

Coverage of TRIPS:

Coverage of TRIPS Areas of intellectual property covered: copyright trademarks geographical indications of goods /products industrial designs patents the layout-designs of integrated circuits trade secrets ; and Registration of plant varieties

Journey of Indian Pharmaceuticals Industry from 1970-1995::

Journey of Indian Pharmaceuticals Industry from 1970-1995: Indian patent law 1970, abolish product patent & allowed process patent for food ,pharmaceuticals, chemical (which is for 7 years againts 14 years for other fields from date of filing ). Exemption from compulsory licence were further reinfoced by introduction of Provision Of Right –permit any one to freely practice invention in public interest without the fear of infringement suit.

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As a consequence - there is an increase in growth of generic pharmaceutical industry in India and they went for developing innovating process and method of- standardization including bioequivalence studies for process development manufacture and marketing of Generic ones. This initiative earned the level of Reverse engineering for Indian national pharmaceutical industry

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Indian become nearly self sufficient in manufacture of medicines , and act as a large manufacturer and exporter of Bulkdrug/API. STATICALLY: The share of national sector of pharmaceutical industry record a growth from 15%-18%. Net Exporter of pharmaceutical- occupying 3 rd largest position in terms of volume & 14th largest in terms of values.

POST GATT SCENARIO(after 1995):

POST GATT SCENARIO(after 1995) A)Because of TRIPS agreement ,Re-introduction of Product Patent after a gap of 35 years, INDIAN P’CEUTICAL INDUSTRY has to face the following challenges: a- Reverse-engineering of patented molecules will be prohibited b- Higher drug prices - The impact will be on the new patented drugs which will bear a higher price tag and will be out of the reach of the common patient. c-Domestic companies will have to change its business model from IMITATION to INNOVATION and need huge invest in R&D.

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d-The high R&D costs will hampered the growth of the Indian P’ceutical industry because the smaller firms not be able to adjust to the transition. e-To capitalize on Export opportunities , Companies will have to upgrade their GMP standards as per International requirements. f-Unable to huge invest in R&D ,the best options left to explore in the Product Patent Era is for the Contract Manufacturing (only mean to maintain high growth rate).

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B) Post TRIPS Opportunities: Advent of WTO and TRIPS regime has done wonders for the Indian P’ceutical industry. Under Pre-1995 regime Indian P’ceutical industry had been floating without direction and with no sense of urgency . Only after the emergence of TRIPS ,Indian P’ceutical industry woke up to challenges of new intellectual property regime and the real action phase has commenced Post-2005.

Research Programme:

Research Programme Reasonable good no. of Indian P’ceutical industry have set up research facilities of global standard and have initiated new research programmes in NDDS and Drug discovery programme. Overseas P’ceutical industry expanded their research facilities substantially in India. Formation of Contract Research Organization(CROs)

HOPES FOR GLOBAL CORPORATION:

HOPES FOR GLOBAL CORPORATION Global corporation had great hopes of once again conquering the P’ceutical market that lost to them over the years to the Indian P’ceutical industry. MANUFACTURING AND EXPORT LEADER Being the large Manufacturer , Indian P’ceutical industry had commenced the export of bulk drugs and formulations to least developed countries in the late 70’s and 80’s ,has now emerged as a major global player ,POST-TRIPS And now the major exporter to developed ones also.

REVERSE BRAIN DRAIN:

REVERSE BRAIN DRAIN Being a treasure house of technically qualified people for the global research and knowledge driven manufacturing community. The research environment in INDIA has encouraged pharma professional of INDIAN origin to be a part of Reverse Brain Drain

CO-MARKETING OR STRATEGIC ALLIANCES:

CO-MARKETING OR STRATEGIC ALLIANCES Co marketing is another opportunity for Indian Mid Size P’ceutical Industry. Mid Size P’ceutical Industry of Europe and Asia that are keen to enter Indian P’ceutical Market form strategic alliance with Indian companies, having significant strength in field operations.

MERGERS AND ACQUISITION:

MERGERS AND ACQUISITION Many small scale P’ceutical companies merge with other National and MNC’s companies in order to compete in the International market Eg : Indoco Remedies have acquired brand KARVOL from Solvay P’ceuticals to take up market share in cough and cold medications

Indian Pharmaceutical Evolution:

Indian Pharmaceutical Evolution Phase II Government Control Indian Patent Act –1970 Drug prices capped Local companies begin to make an impact Phase III Development Phase Process development Production infrastructure creation Export initiatives Phase IV Growth Phase Rapid expansion of domestic market International market development Research orientation Phase V Innovation and Research New IP law Discovery Research Convergence 1970 1980 1990 2000 2010 Phase I Early Years Market share domination by foreign companies Relative absence of organized Indian companies

Moving up the Value Chain:

Moving up the Value Chain Specialty Products Innovative Products TIME Generic exports to under-developed & developing countries Generic exports to developed countries API Exports VALUE

:

www.wto.org Bansal.P,“Hand book for Pharma Students and researchers“pg no:141 Nair .G ,2008 “journal of intellectual property rights”volume 13,pg 432-441. Organization of Pharmaceutical Producers of India. 34th Annual Report,1999-2000:9.

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