Indian pharma cos shun EU,route goods via SA ports

Despite Commerce Minister Anand Sharmas assurance that the European Union (EU) will amend its laws ceasing the seizure of generic drugs in transit....

Despite Commerce Minister Anand Sharmas assurance that the European Union (EU) will amend its laws ceasing the seizure of generic drugs in transit,Indian pharmaceutical giants are taking matters into their own hands to ensure safe transit. Rather than waiting for Parliamentary procedures in the EU and dispute resolution before the World Trade Organization (WTO),pharma companies are now re-routing their products through ports in South Africa instead of those in the Netherlands,where local customs officials had previously seized drugs under domestic patent violation laws.

Although pharma firms have declined to acknowledge the transit swap,which has taken away business from European ports already struggling because of low volumes,both Commerce officials and the Indian Pharmaceutical Alliance (IPA) have acknowledged the trend and potential for greater volumes to shift from the EU to South African ports. (Drug companies) are saying they have already moved traffic,the discussions had been in the air for a while so companies are now resorting to the longer,more expensive trade route to avoid European ports, said a Commerce official under a condition of anonymity.

The ministry says it will not try to intervene in the decision of private players,despite the on-going WTO dispute with the EU and the ever-contentious Free Trade Agreement (FTA) negotiations. India and the EU appear to be at a deadlock over the inclusion of environmental and labour standards in the FTA while the WTO dispute continues to be a strain on the dialogue. Irrespective of our relationship and the impact on European trade,we cannot intervene in every commercial business decision made by the private sector, the the commerce official.

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Although volumes have been difficult to pin-point for the pharma lobby and government,there seems to be potential for far greater trading of pharmaceuticals between South Africa,Argentina,Brazil and India. On behalf of Indias big-time pharma traders – Cipla,Ranbaxy and Dr. Reddys – the IPA has engaged traders in South Africa and Brazil to gauge viability of bulk south-south trading between the developing nations. As an industry,we are trying to promote south-south cooperation and develop a trade route using south-south lines using Johannesburg,Rio De Janeiro and ports in Brazil for all the traffic, said DG Shah Secretary General,IPA. Shah said the industry was not particularly interested in protecting the interests of European traders if an option of safer and cheaper passage was available. It would create more pressure and European airlines would lose business; if European airlines wants to retain this business,they had better tell their governments to resolve this issue. If theyre not willing to resolve it,then we will resolve this ourselves.

Shah has asked Commerce officials to consult with Air India to discover options for bulk-trading using chartered flights. But to make such a plan successful,South Africa and Brazil would have to share the cost by returning commodities back to or toward India. The import of coffee from Brazil and export of tea may also be factored into determining the volume products in transit. Hopefully we can make something happen under IBSA (India-Brazil-South Africa) trading partnership, Shah said.

Sharma visits South Africa this week.

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