Indian drugmakers are to be reimbursed by the government for the extra costs of shipping their products to developing nations without going through the European Union (EU), where a number of shipments have recently been confiscated, according to government officials.

In the last 16 months, more than 20 shipments of generic drugs manufactured by Indian companies - including Aurobindo, Cipla and Dr Reddy’s - have been seized by EU customs officials while in transit in the Netherlands, France, Germany and the UK on their way to customers in Asia, Africa and Latin America. These seizures have resulted from claims by drug majors that the products were in violation of their EU intellectual property (IP) laws.

The confiscations are also to be the subject of a formal complaint by India to the World Trade Organization (WTO)’s dispute settlement body. The complaint, currently being prepared by Ministry of Commerce, claims that the EU has allowed drug majors to misuse the region’s customs regulations and initiatives to combat the trade in counterfeit drugs in order to stop the medicines getting to their lawful destinations, such as Brazil, Colombia and Peru.

Critics of the seizures claim that drug majors are particularly misusing EC Regulation 1383/2003, which is designed to protect the IP rights of EU member state citizens and allows seizure of medical shipments if they are suspected of containing counterfeits or infringing IP rules.

The World Health Organisation (WHO), which has condemned individual seizures, has been asked, with the WTO, to examine the issue by a group of 16 nongovernmental organisations (NGOs). Under WTO rules, IP rights apply at a shipment’s point of origin and its destination only, the NGOs point out, and they claim that the drug majors’ actions represent a direct violation of the WTO’s Doha Declaration on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement and Public Health.

One international aid agency, Medecins Sans Frontiers (MSF), has noted its concerns for its own supplies, as it regularly transports and stores medicines in Europe on a temporary basis, while another, Oxfam International, said it was “nonsensical that a regulation intended to save lives could instead be jeopardizing the ability of doctors and nurses in developing countries to protect them.”

The EU is refusing to re-examine Regulation 1383/2003 and could now be pushing, according to Oxfam, for the rule to be extended globally through free trade agreements and the proposed Anti-Counterfeiting Trade Agreement (ACTA), currently being drawn up by 12 nations plus the EU, and which is due to start its sixth round of negotiations in South Korea in November.

- India’s Department of Pharmaceuticals has also this week signed an agreement with Nigerian regulators which aims to curb Nigeria’s trade in counterfeit medicines. Recently, Nigerian officials have seized quantities of fake drugs made in China but labelled “made in India.” Also, any unregistered drugs seized in Nigeria are automatically classified as counterfeit.