Pakistan Defence
Indian Prime Minister Manmohan Singh's visit to Washington on Friday is an opportunity for President Barack Obama and the U.S. Congress to highlight a worrying development in the bilateral relationship: the Indian government's discrimination against American firms and misappropriation of their intellectual capital. These actions punish our innovators and stifle job creation.
While India's economy has expanded nearly eight-fold since turning from autarky to liberalization in the early 1990s, the Indian government now seems intent on returning to protectionism and intellectual property theft. During a visit to Washington earlier this year, Indian Finance Minister P. Chidambaram praised China's "indigenous innovation" program of forcing transfers of new technologies from foreign firms as a model for India.
True to that vision, India has been demanding technology transfers and local content, erecting barriers to investment, and disregarding foreign intellectual property rights. The most flagrant abuses have been aimed at the pharmaceutical sector.
Over the last 18 months, India has denied, revoked or otherwise attacked the patents of 15 of the 45 or so patented medicines on the Indian market. In March, for example, Indian officials authorized a local company to copy Bayer's innovative Nexavar cancer drug, citing the fact that the drug was not manufactured locally. Such local production conditions violate basic World Trade Organization non-discrimination principles.
Indian officials seek to justify their disregard for foreigners' intellectual property rights by pointing to the need to ensure their citizens' access to medicines. But patents are not the obstacle to treatment that these officials and activists allege.
For instance, 95% of the Indians who were prescribed Novartis's Glivec received the cancer medicine for free. Nonetheless, the Glivec patent, recognized in over 40 other countries, was rejected in India.
The real obstacles to medical access stem principally from the Indian government's failings. India devotes a derisory 1.25% of GDP to health care, a level lower than Haiti, and lacks the insurance, doctors, clinics and hospitals necessary to make effective use of the full potential of modern medicine. Health-care infrastructure problems won't be solved by plundering foreign inventions.
For all the pretense of altruism, the motives for disregarding foreign intellectual property rights appear to be mercenary. Indian drug giants, many of which make the majority of their sales in the United States and Europe, want the technologies created by foreign R&D. Cipla Chairman Y.K. Hamied, a revered Indian business leader, has called for the "automatic license" of foreign patents to local champions.
Some may counsel forbearance in the face of India's mercantilism because of the country's poverty. But India isn't the destitute land of yesteryear. It also has a burgeoning middle class of more than 150 million people and vibrant urban regions. Indeed, by some estimates, the Mumbai area's GDP per capita is higher than Hungary's. It does not have to depend on hand-outs or intellectual property theft.
Rod Hunter: India's Attack on Innovation - WSJ.com
While India's economy has expanded nearly eight-fold since turning from autarky to liberalization in the early 1990s, the Indian government now seems intent on returning to protectionism and intellectual property theft. During a visit to Washington earlier this year, Indian Finance Minister P. Chidambaram praised China's "indigenous innovation" program of forcing transfers of new technologies from foreign firms as a model for India.
True to that vision, India has been demanding technology transfers and local content, erecting barriers to investment, and disregarding foreign intellectual property rights. The most flagrant abuses have been aimed at the pharmaceutical sector.
Over the last 18 months, India has denied, revoked or otherwise attacked the patents of 15 of the 45 or so patented medicines on the Indian market. In March, for example, Indian officials authorized a local company to copy Bayer's innovative Nexavar cancer drug, citing the fact that the drug was not manufactured locally. Such local production conditions violate basic World Trade Organization non-discrimination principles.
Indian officials seek to justify their disregard for foreigners' intellectual property rights by pointing to the need to ensure their citizens' access to medicines. But patents are not the obstacle to treatment that these officials and activists allege.
For instance, 95% of the Indians who were prescribed Novartis's Glivec received the cancer medicine for free. Nonetheless, the Glivec patent, recognized in over 40 other countries, was rejected in India.
The real obstacles to medical access stem principally from the Indian government's failings. India devotes a derisory 1.25% of GDP to health care, a level lower than Haiti, and lacks the insurance, doctors, clinics and hospitals necessary to make effective use of the full potential of modern medicine. Health-care infrastructure problems won't be solved by plundering foreign inventions.
For all the pretense of altruism, the motives for disregarding foreign intellectual property rights appear to be mercenary. Indian drug giants, many of which make the majority of their sales in the United States and Europe, want the technologies created by foreign R&D. Cipla Chairman Y.K. Hamied, a revered Indian business leader, has called for the "automatic license" of foreign patents to local champions.
Some may counsel forbearance in the face of India's mercantilism because of the country's poverty. But India isn't the destitute land of yesteryear. It also has a burgeoning middle class of more than 150 million people and vibrant urban regions. Indeed, by some estimates, the Mumbai area's GDP per capita is higher than Hungary's. It does not have to depend on hand-outs or intellectual property theft.
Rod Hunter: India's Attack on Innovation - WSJ.com