Pointing the Finger at Big Pharma - Dutch Seizure of Generic Medicines

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy
February 10, 2009

Treatment and trade activists and developing countries are justly outraged at the decision of Dutch customs authorities to seize a cargo of 500 kilos of Losartan Potassium that was in transit in Rotterdam while on route from India to Brazil.  This active pharmaceutical ingredient is used in the production of medicines for arterial hypertension, a dangerous and potentially fatal disease.  The production of this API in India is completely lawful, as it is not under patent there, and its use in the formulation of medicines in Brazil is also lawful because there is no valid patent on the API or the final product in Brazil either.

So, why did the Dutch customs officials have any even colorable jurisdiction to seize this in-transit shipment on December 4, 2008, hold it for 34 days, and then redirect it back to India, thereby frustrating not only legitimate trade in non-patented products, but more importantly legitimate trade in life-saving drugs?  Well, they can do so because of some backroom, closed door lobbying by Big Pharma that resulted in the passage of EC Council Regulation 1383, which in turn gives impunity to Big Pharma to make frivolous claims of its "suspicion" that the products "might" violate intellectual property rights in the Netherlands. Admittedly, if this shipment was intended for sale and use in the Netherlands, its importation would violate patent holders rights in the Netherlands where the API is patent protected.  But this shipment was not intended for the Netherlands, and was clearly marked for transhipment to Brazil.  It was part of the regular and legitimate flow of products in transit via airports, seaports, and other border crossings throughout the world.

Does every cross border movement of goods in international transit get stopped if any IP right holder in the transit country has a nonfactual fear that the product "might be diverted" and thus that it "might" violate its territorial interests in the in-transit country?  Is international trade as we know it going to grind to a halt?  Obviously, the vast majority of in-transit goods go their merry way, something that the GATT Article V and even the TRIPS Agreement, Article 51, note 13, clearly endorse. Nonetheless, IP right holders can misuse the EC regulation to make frivolous claims against medicines and APIs in transit, thereby either dramatically increasing costs or even deterring legitimate trade in generics.

Here, the patent holder in the Netherlands, DuPont, and/or the Big Pharma drug company with marketing rights in the Netherlands, Merck and Co., apparently picked up a phone and without legal justification or excuse "requested" that the shipment be impounded and eventually returned to India.  So far, far too little attention has been directed at these corporate criminals who are acting with impunity to thwart lawful generic competition even in countries where their patents and marketing rights have no effect.  This embargo of medicines, at the frivolous behest of drug company bullies, is not only a direct violation of the Doha Declaration on TRIPS and Public Health that prioritizes access to medicines for all, it is also an unconscionable violation of the human right of access to essential medicines enshrined in multiple international treaties.

Unfortunately, Big Pharma is not content with EC Council Regulation 1383, it and its rich country abettors are intent on expanding extra-territorial intellectual property enforcement rules and derailing international trade in generic pharmaceuticals via non-participatory and non-transparent negotiations at the World Health Organization (IMPACT initiative), the World Customs Organization, and in many other settings.  Many of these efforts are under the ruse of stopping "counterfeits," but their true purpose is to increase their monopoly pricing power by frustrating lawful generic competition.

Developing countries are correct in yelling "foul" at the World Trade Organization, as Brazil, India, and a dozen other countries have done.  But we must also point our collective finger at Big Pharma as well.  It masterminded the expanded and illegitimate activities of customs authorities and it hardwired its impunity to make frivolous claims.    It's hypertension medicine today, but tomorrow its AIDS medicines, cancer medicines, and pediatric formulations.  Shame on DuPont, shame on Merck.



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