This week, India’s National Pharmaceutical Pricing Authority (NPPA) imposed measures that significantly cut the prices of a variety of “essential” drugs, including drugs that treat cancer. These price controls are by no means unprecedented. For decades, the Indian government has worked to keep drug costs low, which has often meant bucking international drug patenting and pricing norms. In doing so India nurtured and developed a massive generic drug industry. While the Indian government must not be admonished for keeping drug costs low, its longstanding obsession with cheap drugs may distract from broader health care accessibility issues.

In 1970, India passed a newly revised Patents Act, which upended the Indian pharmaceutical industry. The act stipulated pharmaceutical patents would only be issued to drugs that exhibited “one or more inventive step(s).” While this language seems relatively innocuous, it totally changed the way in which pharmaceutical corporations conduct business.

Drug patents allow holders to charge high prices because patents ensure market exclusivity for a given period of time. However, in order to maintain market exclusivity, drug companies engage in a practice known as “evergreening.” In most countries, patent laws are such that pharmaceutical companies are able to extend patents and maintain monopolies by making trivial modifications to an already patented product. According to the American Medical Association, these slight alterations allow patent holders to claim they are releasing a new, innovative drug and extend their exclusive rights over said drug “despite the absence of any compelling pharmacologic difference.” In the United States, companies do all sorts of things to “evergreen” drugs including “obtaining additional patents on other aspects of a drug, including its coating, salt moiety, formulation, and method of administration.”

The language in India’s 1970 act is such that companies selling drugs in India would no longer be able to get a patent unless they were offering a new and “inventive” drug. Companies would no longer be able to patent known drugs in an attempt to extend a market monopoly. As a result, a drug that might have enjoyed patent protection elsewhere, would not be protected under Indian patent policy. Soon after this policy shift, India’s generic drug industry exploded, and domestic drug prices plummeted. Before long, India became one of the world’s largest pharmaceutical exporters.

India has made changes to its patent policy over the years, but its generic drug industry continues to operate and thrive under legal conditions set in motion by the 1970 act. Ironically, India’s largest manufacturers are beginning to push back against price-oriented policies that brought them into existence.

While India’s patent polices undermined evergreening practices, price controls were instituted as an additional means of keeping drugs affordable. The creation of a generic drug industry worked to cut costs by undermining market monopolies but, as time went on, India’s most prominent manufacturers of generic drugs were able to brand their products and charge premiums. Price controls were used to ensure these premium prices were not excessive compared to the average cost of other generics.

Whereas India’s patent laws prevent multinational corporations from charging exorbitant prices in monopolized markets, India’s price controls prevent domestic manufacturers of generic drugs from charging more for a drug that bears their brand. Just as multinational corporations argued India’s patent policies stifle innovation, domestic manufacturers arguing that price control affect their ability to operate. In 2012, the government even went as far as suggesting “a future where we will not issue any brand or trade names.”

India’s government should not be criticized for ending price gouging tactics. Multinational corporations should not be able to exclude swaths of people from access to drugs by manipulating patent policy and extending market exclusivity, and cheap generics are crucial in a country where around 78 percent of the population pays for health care out-of-pocket. However, while access to cheap drugs is vital, the government’s health care policy is largely defined by its longstanding obsession with the generic industry and domestic drug prices.

Decades of policies ensuring cheap and readily accessible drugs have helped improve access for many but may have distracted from more holistic attempts at improving health care accessibility. Yet, notwithstanding cheap drug prices, studies have show health care costs are responsible for half of all Indian households falling into poverty. This most recent round of price controls on essential generic drugs came as no surprise, and that might be an issue. India’s pushback to the international patent regime is commendable but cheap drugs should not be treated as the end all be all of health care accessibility.

Callum Cleary

Callum is an editorial intern at Law Street. He is from Portland OR by way of the United Kingdom. He is a senior at American University double majoring in International Studies and Philosophy with a focus on social justice in Latin America. Contact Callum at Staff@LawStreetMedia.com.

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Over the past several months, there have been major advancements in Colombia’s peace process. But more work lies ahead if Colombia wants to achieve lasting peace and reconciliation–each actor in the conflict must be held accountable. In an attempt to ensure a comprehensive peace process, Colombia’s transitional justice system charged a group of multinational corporations (MNCs) with crimes against humanity. The move to charge corporate entities with crimes against humanity is rare and could set a precedent for corporate accountability moving forward.

Colombia’s Peace Process

Late last year, the Colombian government reached a peace agreement with the Revolutionary Armed Forces of Colombia (FARC) and has since begun talks with the National Liberation Army (ELN). Negotiations between the government and these two marxist insurgencies have dominated coverage of the country’s peace process. However, it is a mistake to treat the conflict as something exclusive to the government and these leftist insurgencies. The war in Colombia is complex. In order to achieve lasting peace, the process cannot ignore the plethora of groups and interests that have stoked the conflict over its many years. On February 2, the Colombian transitional justice system took a major step in ensuring a comprehensive peace and reconciliation process by charging a group of MNCs with crimes against humanity.

While FARC and the ELN often draw the attention of onlookers, a 2013 government report claimed right-wing paramilitary groups aligned with the Colombian government and/or corporations perpetrated most of the conflict’s targeted killings and a majority of its massacres. The collection of MNCs, which includes Dole, Del Monte, and Chiquita were accused of knowingly funding right-wing paramilitary groups in order to protect their interests. The fruit-producing MNCs are believed to have supported the infamously violent United Self-Defense Forces of Colombia (AUC) which controlled swaths of Uraba and northern Colombia–the country’s main banana producing region.

Corporate Crimes?

Of course, corporations are regularly accused of violating human rights. There are no shortages of stories (many backed by conclusive evidence) in which corporations ruthlessly pursued their interests with a callous disregard for human life. Rich in natural resources, Latin America is home to some of the most harrowing examples of corporate incited conflicts. Notwithstanding the multitudes of corporate interests in the region, fruit companies have a particularly sordid history in Latin America. In the 1950’s, the United Fruit Company worked with the CIA to overthrow an overwhelmingly popular leftist government in Guatemala and install a far-right authoritarian government that was sympathetic to corporate business interests. This authoritarian coup led to a 36-year war and the genocide of an estimated 200,000, predominately indigenous, people. In the 1980’s, The United Fruit Company changed its name to Chiquita Brands International. Though stories past and present suggest that corporations consistently violate human rights, they act as though they are “too big to stand trial.”

MNCs are largely immune from legal accountability. By definition, MNCs are international entities. Their global reach often leads them to argue that a given court does not have jurisdiction over their actions. Therefore, finding a court that will hear a case and have the authority to enforce a ruling is a major challenge for a prospective plaintiff. Furthermore, many courts, including the International Criminal Court, fail to list corporations as judicial persons subject to investigation and prosecution. While courts could potentially punish executives instead of the entity as a whole, complex corporate structures make it difficult to pin liability on particular individuals. Even if a viable case is brought against a corporation, they generally have a distinct economic advantage over the plaintiff that allows them to employ superior counsel or settle the case out of court. On the rare occasion MNCs are found guilty in court, the punishments are often negligible. These factors perhaps explain why Colombia’s transitional justice system is among the first to charge MNCs with crimes against humanity.

Transitional Justice as a Model?

Transitional justice systems are established in the wake of a conflict and are a crucial component in peace and reconciliation processes. According the International Center for Transitional Justice (ICTJ), a non-profit that has been working with Colombia since 2005, transitional justice, among other things, works to make “access to justice a reality for the most vulnerable,” ensure “that women and marginalized groups play an effective role in the pursuit of a just society,” and  establish “a basis to address the underlying causeless of conflict and marginalization.” While one would hope and expect that every court system upheld these values, transitional justice systems are established with these particular humanitarian aims in mind. If the consortium of corporations actually did fund paramilitary groups, then it is imperative for peace that they are held accountable. An effective reconciliation process must necessarily give a voice to those most affected by the conflict and create a dialogue that addresses, deconstructs, and delegitimizes the conflicts motivating interests and actors. However, there is often a stark power imbalance between those driving conflict and those most affected by conflict. Unfortunately, these disparities in power translate into the traditional court room.

Far too often, corporate behemoths are able to marginalize the voices of those victimized by their interested pursuits. MNCs are able to bat away, or at least minimize, practically any legal challenge that comes their way. It is too early to argue that events in Colombia signify a turning point for corporate accountability. The charges against these MNCs were pressed by an impermanent court, under particular circumstances, have yet to be proven, and the implications of a guilty verdict remain to be seen. Multinational corporations continue to grow in size and influence, and corporate accountability is often demanded but rarely demonstrated. The fact that that a transitional justice system was among the first to explicitly charge MNCs with crimes against humanity is indicative of the way in which traditional justice systems generally preserve hegemonic interests rather than uphold justice.

Callum Cleary

Callum is an editorial intern at Law Street. He is from Portland OR by way of the United Kingdom. He is a senior at American University double majoring in International Studies and Philosophy with a focus on social justice in Latin America. Contact Callum at Staff@LawStreetMedia.com.

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