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Freedom of transit -- or risk of profiteering?

ISCTD reports that the Brazilian ambassador to the World Trade Organization has condemned the European Union for seizing a shipment of generic drugs that was bound for Brazil, claiming that the move “sets a dangerous precedent” for public health. 500 kilograms of the hypertension drug losartan potassium was confiscated on 4 December while the ship that was delivering it to Brazil was docked in the Netherlands. The Dutch authorities held the shipment for 36 days before returning it to India, where the drugs had been manufactured. Losartan potassium is patented in Europe (where DuPont and Merck Sharp & Dohme own the patent and marketing rights to the drug, sold as Cozaar), but the drugs were not under patent in Brazil or India and had not been released into the market in Europe.

There is a big trade-versus-IP issue here. Brazil and India argue in favour of freedom of transit, in respect of drugs that can be freely made and sold both in India and Brazil without infringing any IP right. The European Union is however unhappy that valuable drugs, in which originator drug companies have invested heavily, can easily find themselves available for sale in an increasingly unrestricted and fluid European single market in which their sale will fetch a far higher price than it would in Brazil.

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