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Thursday 13 May 2010

José Carlos Vaz e Dias

Brazil Takes the EU to the WTO Settlement Dispute: Generic Drugs on the Agenda

It has been reported that yesterday Brazil and India have launched separate formal complaints at the WTO against the EU’s policy towards seizure of generic drugs manufactured in India.

One may wonder: What has Brazil to do with this matter? Isn’t it India that manufactures the generic drugs and exports them everywhere? Have not been the Indian pharma companies who suffered in the last two years with more than 18 seizures in the EU ports? The answer to all these questions is: Yes! Nevertheless, the Brazilian market has been the final destination to a great quantity of generic drugs coming from India.

The conflicts involving Brazil started back in November/December 2009 when a shipment of 500 kilos of the generic drug Losartan® was seized at the Rotterdam port. The cargo left India with Brazil as its final destination, but had a stop over at the Rotterdam Port. Soon after the Dutch customs authorities realized that the generic drugs manufactured in India had existing valid patents for Losartan® in the EU, they informed the company that holds the patents for that drug - Merck Sharp & Dohme - which quickly obtained an injunction to restrain the importation transit procedure.

The cargo was after released and sent back to India, not to Brazil. The Brazilian government did not like it and argued that Merck did not hold patents for the Losartan® either in Brazil or India. India has also informed that such shipment and others did not violate the TRIPS Agreement. On the other hand, the EU authorities highlighted their fight against piracy and illegal drugs.

At first, the involved parties will initiate Consultation proceedings at the WTO, so as to reach an amicable solution. If an amicable settlement is not reached, official WTO judges will examine the case and render a final decision. In the meantime, countries such as Peru, Nigeria and Colombia are patiently waiting the outcome of this dispute, since they are also regular importers of Indian generic drugs. Indian companies, at their end, have decided to move away from EU ports and may use the Panama Canal instead. As to Brazil, importation will continue since the government’s view is that they are not breaking any rules.

Further developments on this matter are, indeed, worth being watched.

José Carlos Vaz e Dias

José Carlos Vaz e Dias