Brazil, India Challenge Generic Drug Detentions

12 May 2010

After months of speculation, Brazil and India have launched a WTO dispute against the EU and the Netherlands over the seizure of generic drugs in transit, the Brazilian Mission to the WTO announced on Wednesday.

The two complainant countries have requested consultations with the EU and the Netherlands, the first step in the WTO's dispute settlement process. The first meeting of the parties to the dispute should take place later this month, a source close to the matter said.

Brazil and India's complaint centres on a series of detentions of generic drugs that took place in 2008 and 2009. In each case, a batch of medicines en route from one developing country to another was temporarily held by border officials at European harbours or airports.

The first such case concerned a shipment of a generic version of the hypertension drug Losartan potassium that was confiscated in the Netherlands in December 2008. The Dutch authorities held the shipment, which was bound for Brazil, for 36 days before it was returned to India, where the drugs had been manufactured. The medicine is protected by patent in Europe, but not in Brazil or India.

"The seizure of goods due to alleged patent infringements in the country of transit is a clear violation of the WTO disciplines on the freedom of transit, which is one of the cornerstones of the multilateral trading system," said a statement released by the Brazilian Mission on Wednesday.

The statement noted that Brazil has urged the EU to change its border regulations to prevent such detentions in the future.

"Despite all these efforts, the Regulation 1383/2003 that provides the legal basis for the seizures remains unchanged, causing lack of predictability and increased costs of medicines at the destination markets," the Brazilian statement said.

The EU is open to revising its border regulations, the European Trade Commission insisted on Wednesday.

The European Commission "has already signalled its intentions to modify its legislation to the extent necessary to clarify the procedures relating to medicines in transit," said John Clancy, spokesman for the EU Trade Commission. "We are confident that a dispute on this issue will not be necessary," he added.

ICTSD reporting.

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