Fears of patented drug prices going through the roof were scotched on Monday (November 12) as developing countries finally won the battle for cheaper drugs under the World Trade Organisation (WTO) regime. Consensus was reached on the fourth day of WTO Doha Ministerial on a draft text on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and public health.

The draft text on TRIPS and public health calls for adequate flexibility for countries to provide drugs at affordable prices. Countries can now override their patent obligations under circumstances of public health crises. With this, the patients vs patents debate also reached its logical conclusion at WTO.

The new flexibility for protecting public health under TRIPS will keep drug prices from rising in the domestic market. It also holds out an opportunity for Indian drug manufacturers to get a foothold in the overseas generics market.

India has emerged over the years as a major producer of generic drugs. As a result, drugs are much cheaper in India compared to other countries where product patent regime is in place. Export markets will now open up for Indian drugs in countries where prices have been relatively high due to stringent patent laws. India has manufacturing capacity to supply large volumes of generic drugs. The US authorities recently approached Indian drug majors for large volume supply of ciprofloxacin to fight the anthrax menace.

Stringent TRIPS provisions on public health came under scrutiny following filing of a legal suit by an alliance of 35 pharma multinationals against government's decision in South Africa to allow parallel import of AIDS drugs. The widespread campaign launched by public health NGOs ultimately forced the pharma companies to drop the court case. This was a major victory for NGOs working for public health in AIDS-ravaged African countries.

The focus of the debate continued on the definition of a per capita income of $1000, which is the limit for non-action on the violation of export subsidies under the WTO Agreement on Subsidies and Countervailing Measures. Latin American and Central American countries, however, want eligibility criteria to be expanded to countries with a Gross National Income of less than $20 billion and/or a share of world merchandise export not greater than 0.01 per cent. These would put a large number of countries with a per capita income above $1000 under special dispensation.

Stalemate continues over draft implementation texts calling for an accelerated dismantling of textile quotas. The US, Canada, Italy, Spain and Portugal are not ready to accept the demand for higher growth-on-growth provision.

The European Union (EU) has upped the ante on the clarification of existing WTO provisions on environment. The EU says this is an extremely important, if not the most important, issue of the Doha Ministerial. The EU may drop its demand on new issues like competition, investment, trade facilitation and government procurement to salvage faltering negotiations on environment.