Britain’s trade deal with India at risk amid row over cheap generic drugs

A multibillion-pound free-trade deal with India is under threat from a row over the UK’s demands for new curbs on the production of cheap generic drugs.

Indian negotiators have rejected Britain’s demand that patents on drugs should be extended before cheaper copies can be produced as a means to protect pharmaceutical giants’ businesses from generic competitors.

It is another dispute delaying the deal ahead of Rishi Sunak’s trip to India next month for talks with the country’s prime minister, Narendra Modi. Kemi Badenoch, the trade secretary, is also in India this week in an attempt to give political impetus to the discussions.

The differences over drug patents as well as India’s demands for more visas for nurses and care workers have dampened hopes of any imminent announcement. It is thought final agreement on a free-trade deal is unlikely before the end of the year although there is a possibility parts of it could be announced before then.

It came as Covid vaccine maker AstraZeneca on Friday launched legal action against Joe Biden’s administration over legislation that allows the US government to negotiate prices on behalf of members of its national health insurance programme, Medicare.

The measures are expected to save Medicare $100bn by 2031 and came in response to public pressure to lower drug prices for its patients, who are typically older or disabled. 

However, medicine manufacturers have complained that this will reduce profits and hinder research into new therapies. 

British pharmaceutical group AstraZeneca, which generates 40pc of its revenue from the US, said it has been forced to cut investments in rare diseases and cancers as a result of President Biden’s legislation.

At the heart of the Indian drugs patent row is India’s thriving generic drug industry which is set against Britain’s pharmaceutical prowess that has led to the development of world-leading drugs such as vaccines for Covid.

Britain wants India to accept so-called TRIPS-plus arrangements, which offer longer patent protection for drugs than normally applies under the international agreements to which India has signed up, according to a leaked draft of the free trade agreement.

An official at India’s commerce ministry told The Telegraph that the Indian government was strongly opposed to the UK’s demand for patent term extensions on drugs and claimed it was unlikely the UK would be able to get it included in the final agreement.

He said the Indian government was “committed to protecting access to affordable medicines” and that it would not agree to any provisions in the trade deal that would make it more difficult for generic drug manufacturers to operate in India.

“We are still in negotiations over the trade deal, and it is possible that the UK may withdraw its demand for patent term extension,” he said.

More than 120 health and human rights groups and experts have written to Ms Badenoch this weekend urging her to withdraw the proposals which they claimed could threaten the supply of generic medicines not only to low and middle-income countries but also globally.

In their letter, the health experts cited as an example this year’s decision by the Indian patent office to reject an attempt by Johnson & Johnson to extend the patent on its tuberculosis drug Bedaquiline.

“This case opened the door for other companies to produce affordable generic versions of Bedaquiline, with some health experts estimating the cost of treatment could be cut by up to 80pc,” said the experts from 28 countries ranging from Italy and Thailand to India, Ghana and Vietnam.

They added: “Depriving people of affordable medicines would increase health inequality, as only the wealthiest in our countries may be able to afford these medicines. Moreover, it would add further financial burden on our already stretched health systems.”

Opponents of the UK proposals have warned they could have a knock-on effect in the UK. Four in five of the medicines and drugs used in the NHS are generics, of which a third are from India, meaning about one in four medicines are un-branded Indian versions.

However, officials at Ms Badenoch’s business and trade department have strongly denied such claims.

“The NHS, its services and the cost of medicines are not and have never been on the table for any trade deal. We will never agree provisions that would increase the cost of medicines for our NHS,” said a department spokesman.

“The UK’s approach to IP is to strike a balance between encouraging innovation and ensuring access to affordable medicines – this has not changed.”

As revealed this week by The Telegraph, India is also demanding more visas for nurses, care workers and IT professionals as the price of a free-trade deal. UK ministers have, however, said there will be no special treatment for Indians under the Government’s points-based immigration system for skilled workers.