LETTERS

Ever since the rst issue in 1966, EPW has been Indias premier journal for comment on current affairs and research in the social sciences. It succeeded Economic Weekly (1949-1965), which was launched and shepherded by Sachin Chaudhuri, who was also the founder-editor of EPW. As editor for thirty-ve years (1969-2004) K rishna R aj gave EPW the reputation it now enjoys.

Takeover of Indian Pharma Companies

ndia is, today, the fourth largest producer of drugs in the world and a world class supplier of relatively cheap generic medicines. It is the largest supplier in the world of low-priced anti-retrovirals and exports medicines to over 200 countries. However, major concerns regarding access to medicines in the country remain. The World Health Organisation has reported that about 68 crore people, i e, 65% of Indians, are without access to essential medicines. Instead of building on the excellent manufacturing capacity to make available essential medicines for all, there has been progressive undermining of these gains especially in recent years. All the three major developments which resulted in India becoming the pharmacy of the world have now been reversed the Indian Patents Act of 1970; initiation of manufacture of medicines from the basic stage by Indian public sector companies in the 1960s; and the 1978 Drug Policy that imposed several restrictions on the operations of foreign companies while providing preferential treatment to Indian companies. The immediate cause for concern is the series of takeovers of important Indian companies by multinational corporations (MNCs) and the trend towards domestic companies becoming junior partners through tie-ups. Six major acquisitions of Indian companies have taken place in the last four years Ranbaxy, Dabur Pharma, Shanta Biotech, Piramal Health Care, Matrix Lab and Orchid Chemicals, and more are on the anvil. Further, there have been several other tie-ups between MNCs and domestic companies viz, GSK with Dr Reddys; Pzer with three companies Aurobindo, Strides Arcolab and Claris Life Sciences; Abbot with Cadilla Health Care and Astra Zeneca with Torrent. The Indian drug industry, built by diligent application of public policy that sought to achieve self-reliance in the pharmaceutical sector and availability of medicines at affordable prices, is poised to be handed over to MNCs. These developments clearly affect Indias health security negatively. It is in this context that we note with concern reports in the media that a delegation
october 23, 2010

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from PhRMA (the representative of US-based drug companies), which is to visit India soon, is particularly interested in discouraging the Indian government from applying a cap on foreign direct investment (FDI) in the pharma sector and from issuing compulsory licences for patented medicines. We are strongly of the opinion that an FDI cap on foreign ownership of pharma companies and liberal use of compulsory licences are two vital avenues open to India to nd ways to ensure much wider access to essential medicines to its citizens. We also urge the government operationalise the following measures to rescue India from the opprobrium of being home to the largest number of people without access to essential medicines: (i) Examine the existence of collusive behaviour and abuse of monopoly through intellectual property rights and resultant high prices of patented drugs in India. (ii) Instead of automatic approval, FDI in the pharma sector be routed through the Foreign Investment Promotion Board with an imposition of an FDI cap of 40%, (iii) Liberal use of the compulsory licence provisions of the Indian Patents Act to secure access to patented medicines and therefore lower costs of medicines, (iv) Scrap the loan licence system and contract manufacturing to discourage big companies from reducing their manufacturing activity, (v) Formulate appropriate policies to incentivise bulk drug manufacture by Indian companies over import of bulk drugs, (vi) Resist attempts to introduce measures such as data exclusivity, or to dilute/remove Section 3d of the Indian Patents Act, especially through bilateral/ free trade agreements, (vii) Revive public sector units to ensure production of essential medicines and to provide security in emergency situations arising out of calamities such as war, natural disasters and epidemics.
Dr Amit Sengupta, All India Peoples Science Network; Dr Gopal Dabade, All India Drug Action Network; Dr Narendra Gupta, Prayas Rajasthan; S Srinivasan, LOCOST; Dr Anant Phadke, Medico Friend Circle; Dr C M Gulhati, Editor, MIMS; N B Sarojini, Sama Resource Group for Women and Health (Extracts from an open letter to Manmohan Singh, Prime Minister of India)
vol xlv no 43
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LETTERS

University of Hyderabad
e, the teachers at the University of Hyderabad, strongly oppose all moves by the university administration to alienate and gift away more than 1,000 acres out of the 2,324 acres of land that were granted to the university by the Andhra Pradesh government in 1974. First the university administration allotted 200 acres to CARE Foundation, a corporate medical organisation. Later the administration tried to set up a so-called Knowledge and Innovation Park by allotting another 200 acres of the university land to corporate rms for their R&D activity. The university community fought a successful battle against these allotments to private companies and got them cancelled. The administration has, however, succeeded in allotting university land to Teri, the Centre for DNA Fingerprinting and Diagnostics, the National Institute of Smart Governance, the Tata Institute of Fundamental Research and so forth. The university administration is currently pressing ahead with moves to allot 150 acres to the National Institute of Animal Biotechnology and 30 acres to the National Institute of Design. In all, this amounts to more than 600 acres of university land. We suspect that even government organisations are being used as front institutions that will facilitate the entry of private sector bodies through private-public partnership models. Most importantly, the university is still developing and growing and indiscriminate allotment of land will become a roadblock to its own growth. There is also no clear vision or strategy evident in all these land alienations and how they t in with the long-term prospects of the university. We wish to express the rm opinion that: (1) The university should adopt a highly cautious stance in considering requests for land allotment by outside organisations, whether private or public since it is a limited resource and could be required for its own future growth. (2) The university administration should resist, not appease, the Andhra Pradesh governments attempts to take back land given to the university. (3) All the land allotments by the university made in the last ve years should
Economic & Political Weekly EPW

be subjected to a thorough review and reconsideration. (4) All stakeholders of the university (teachers, students and employees) should be taken into condence about any future proposal to alienate university land. (5) A committee should be formed at the national level to look into land alienation issues pertaining to any Indian university.
P Appa Rao, Life Sciences; Purendra Prasad, Sociology; Durga Bhavani, Computer Science V Rajagopal, History; K Laxminarayana, Economics; Vamsi Vakulabharanam, Economics; K Laxmi Narayan, Sociology and Y A Sudhakar Reddy, Folk Culture Studies University of Hyderabad

On the UIDAI
project that proposes to give every resident a unique identity number is a matter of great concern for those working on issues of food security, NREGA, migration, technology, decentralisation, constitutionalism, civil liberties and human rights. The process of setting up the Unique Identication Authority of India (UIDAI) has resulted in very little, if any, discussion about this project and its effects and fallout. It is intended to collect demographic data about all residents in the country. Before it goes any further, we consider it imperative that the following be done: (i) Do a feasibility study: There are claims made in relation to the project, about what it can do for the PDS and NREGA, for instance, which does not reect any understanding of the situation on the ground. The project documents do not say what other effects the project may have, including its potential to be intrusive and violative of privacy, who may handle the data. (ii) Do a cost-benet analysis: It is reported that the UIDAI estimates the project will cost Rs 45,000 crore to the exchequer in the next four years. This does not seem to include the costs that will be incurred by the registrars, enrollers, the internal systems costs that the PDs system will have to budget if it is to be able to use the UID, the estimated cost to the end user and to the number holder. (iii) In a system such as this, a mere statement that the UIDAI will deal with the security of the data is obviously insufcient. How does the UIDAI propose to deal with data theft?
vol xlv no 43

(iv) The involvement of rms such as Ernst & Young and Accenture raises further questions about who will have access to the data, and what that means to the people of India. The questions have been raised which have not been addressed so far, including those about: (i) Privacy: It is only now that the Department of Personnel and Training is said to be working on a draft of a privacy law, but nothing is out for discussion, (ii) Surveillance: This technology, and the existence of the UID number, and its working, could result in increasing the potential for surveillance, (iii) Proling, (iv) Tracking, and (v) Convergence, by which those with access to state power, as well as companies, could collate information about each individual with the help of the UID number. National IDs have been abandoned in the US, Australia and the uk. The reasons have predominantly been costs and privacy. If it is too expensive for the US with a population of 308 million, and the UK with 61 million people, and Australia with 21 million people, it is being asked why India thinks it can prioritise its spending in this direction. In the UK the home secretary explained that they were abandoning the project because it would otherwise be intrusive bullying by the State, and that the government intended to be the servant of the people, and not their master. Is there a lesson in it for us? This is a project that could change the status of the people in this country, with effects on our security and constitutional rights. So a consideration of all aspects of the project should be undertaken with this in mind. We, therefore, ask that the project be halted; a feasibility study be done covering all aspects of this issue; experts be tasked with studying its constitutionality; the law on privacy be urgently worked on (this will affect matters way beyond the UID project); a cost-benet analysis be done; a public, informed debate be conducted before any such major change be brought in.
Justice V R Krishna Iyer, Romila Thapar, K G Kannabiran, S R Sankaran, Upendra Baxi, Shohini Ghosh, Bezwada Wilson, Trilochan Sastry, Jagdeep Chhokar, Justice A P Shah, and others. (Based on a statement issued on 28 September)

october 23, 2010