India calls off EU trade talks

Action reflects disappointment at EU ban on 700 Indian-made generics

India has called off a scheduled meeting with European Union representatives in talks over the proposed free trade agreement. Chief trade negotiators from both sides were expected to meet in Mumbai on 28 August to resume the talks for the Broad based Trade and Investment Agreement (BTIA), stalled since 2013.

The decision to call off the proposed meeting has been taken 'as the Government of India is disappointed and concerned over the action of the EU in imposing a legally binding ban on the sale of around 700 pharma products clinically tested by GVK Biosciences', according to an official communique from India's commerce and industry ministry.

The EU has banned the marketing of around 700 generic medicines for alleged manipulation of clinical trials conducted by Indian pharmaceutical research company GVK Biosciences. The largest EU-wide suspension of sales and distribution of generic drugs ordered by the European Commission is scheduled to come into effect on 21 August, and will be applicable to all 28 member nations, according to Germany's drug regulator, the Federal Institute for Medicines and Medical Products (BfArM).

The EU has been India's largest trading partner and bilateral trade is likely to swell significantly if the countries could firm up the long pending BTIA. In total, India received US$24.91bn in foreign direct investment (FDI) equity inflows from EU between April 2012 and May 2015.

The ministry statement said the government has engaged on the issue with various EU regulators over the past eight months. Pointing out that most of the drugs banned by the EU have already been in the market for many years 'without any adverse pharmacovigilance report from any member state', the ministry said that the pharmaceutical industry is one of the flagship sectors of India which has developed its reputation through strong research and safety protocols over the years.

The EU’s ban on 700 generic drug products based on data integrity issues is set to affect Indian exports worth at least $1bn, according to the Pharmaceutical Export Promotion Council of India (Pharmexcil). While products being manufactured and marketed directly by Indian pharmaceutical companies constitute around 30% of this estimated total, the rest of the value is being sourced by global generic players from India, estimates Pharmexcil.

'We have estimated the value of the products banned by the EU to be between $1bn and $1.2bn. These products are being sourced from India by global majors. Therefore, the EU decision impacts our pharmaceutical exports to the extent of around $1bn,' said Pharmexcil director general P V Appaji. The commerce ministry is reviewing the situation arising out of the EU decision and has asked Pharmexcil for the necessary feedback on the impact, he added.

Appaji said the ministry was unhappy with the blanket ban since the French regulator, ANSM, which had found discrepancies in the ECG reports in its May 2014 audit, itself stated that the findings should not be extrapolated beyond the clinic part of the facility.

DG Shah, secretary general of the Indian Pharmaceutical Alliance, said that the EU decision was flawed on two counts. 'First, the inspectors inspected only 25 products and based on that they extrapolated their findings to 1,000 products,' Shah said. 'Second, the charge is of manipulation of ECGs that were taken for clinical trials. The inspectors who visited were not experts in reading ECGs, which can be correctly read only by cardiologists. These ECGs were sent to globally expert cardiologists and none could say that there was manipulation.'

GVK Biosciences opened dialogues with various regulatory agencies in Europe, and presented more data from cardiologists as well as from the company’s internal investigations following the recommendation for suspension of these products by the European Medicines Agency (EMA) in January this year.

The Indian government has said it will exercise all options. Chief trade negotiators from the two sides were expected to meet on 20 August in Delhi, but the meeting never took place.

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