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Tuesday 10 February 2009


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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10 February 2009 at 18:53 delete

This event may well have something in common with Mark Twain's "report of my death". The exaggeration lies in the word "seizure".

EU Ambassador Eckart Guth said at the WTO the shipment had been "temporarily detained" (not "seized"), obviously for the time needed to check the situation. He further said: "The goods were not intended for the EC market and the medicines were finally released by the authorities, leaving their (Indian) owner the right to do with these goods as he pleases." Dr. Reddy chose to have the consignment shipped back to India.

This does not subtract anything from the observation that there is a big trade-versus-IP issue. But it would surely be better for the issue to be handled on the basis of facts (was there "transit"?) rather than emotion.

And by the way, the Spicy IP has a sobering comment, "Why the big fuss over the Dutch seizing Dr. Reddy's patent infringing drugs during transit? India has done the same in the past".