India and Brazil have said they may launch a dispute at tomorrow’s meeting of the World Trade Organisation’s General Council over the seizure by Dutch authorities of Indian-made generic drugs bound for Brazil.

The consignment, of $500,000-worth of bulk losartan (Merck & Co’s antihypertension drug Cozaar) manufactured by Indian firm Dr Reddy’s, was confiscated as it passed through Rotterdam in the Netherlands on its way Brazil last month. The drugs, which were bound for EMS Sigma, Brazil’s leading pharmaceutical company, were impounded after a Dutch company claimed patent infringement in a local court. They were then sent back to India.

Speaking about the incident during the World Economic Forum meeting in Davos at the weekend, India’s commerce and industry minister Kamal Nath and Brazil’s external relations minister, Celso Amorim, said that as well as challenging the Dutch action at the WTO meeting, they might also initiate legal procedures under the Dutch or European Union (EU) legal systems. Mr Amorim described the Dutch authorities' action as “preposterous,” pointing out that Cozaar is not under patent protection in either India and Brazil and emphasising that at no time had the consignment entered Dutch territory.

The WTO’s Asian and South American member states pledged to protest against the seizure to the General Council tomorrow.

The incident was also condemned by the Brazilian ambassador at last week’s meeting of the World Health Organisation’s (WHO) Executive Board. She described it as “a grave drawback” for universal access to medicines and a “distorted use of the international intellectual property system,” and pointed out that the consignment of was “strategic to public health in a developing country and exported in conformity with the existing norms.”

Moreover, the Indian government has protested to the European Commission, describing the event as “an act of piracy” and part of a strategy to target generic drugs from India. While this is the first such seizure of a shipment from a large Indian drugmaker, India’s Pharmaceuticals Export Promotion Council (Pharmexcil) reported late last year that consignments from a number of small and medium-sized bulk drugmakers based in Mumbai and Hyderabad had recently been seized at EU ports including Germany, France and the UK as well as the Netherlands, all on claims of intellectual property rights violations.