Mumbai, Dec 20: The Indian drug industry will be severely hit if the new patent legislation, now in a semi-dormant state, is pushed through by the government under pressure from the WTO, former RBI governor S Venkitaramanan said. He was delivering the key-note address at the annual function of the Indian Drug Manufacturers' Association (IDMA) here on Saturday.

In a hard-hitting speech, Venkitaramanan said that India should avail itself of all the loopholes available under the new regime and added that the US, the primary votary of free trade, pays only lip service to the concept of free trade.

The US has its own special legislation which enables it at will to supersede the requirements of the WTO, he said. "Wherever WTO is in conflict with US interests, the US can refer to section 301. Section 301 has enabled the US government to punish countries for alleged deviation from free trade, even though the deviation may be in keeping with the principles of WTO," he said.

In the entire legislation of the Uruguay Round Agreement Act, the US Congress has given primacy to its own laws in national interest and priorities over its obligations under WTO and TRIPS. Moreover, the Congress has even reserved powers to review and take decisions about continuing in WTO. The US has always believed in the canons of free trade, but only for others, he added.

On the issue of process patents, he said, economies like Germany and the US had themselves developed their industries based on reverse engineering and their current position on this was rather intriguing. Indian policy makers should note that India is not in the same stage as that of developed countries. "To deny India the right to develop new processes for drugs just because developed countries have switched to product patents is inherently unfair," he said.

Venkitaramanan also emphasised the need for strong political will and a legal and bureaucratic structure to meet the pressures of the external world. He cited the example of China which had succeeded in getting Boeing to invest heavily in a new factory to produce locally components and parts not only for the planes sold to China, but also for those made in Seattle, US.

Meanwhile, delivering the inaugural speech at the meeting, Union minister of chemicals and fertilisers M Arunachalam said that the National Pharmaceutical Pricing Authority (NPPA) had been given the necessary freedom to discharge its functions. "As the NPPA becomes fully functional, I am confident that many of the irritants in the pricing mechanism would disappear," he said.

The minister, however, expressed concern over the presence of irrational drug combinations and the proliferation of pack sizes and urged the industry to adhere to scientific ways through self discipline.

Earlier, IDMA president Dinesh S Patel urged the ministry of chemicals and fertilisers and the ministry of law to bury the issue of the Drug Price Equalisation Account (DPEA) and sought adequate protection for the bulk drug industry.

Patel also urged the government to replace the Drug Price Control Order (DPCO) with a price-monitoring system and provide incentives to encourage basic research in the pharmaceutical industry.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.