Executive Summary
Access to biologics remains sharply unequal across global income lines, with low and middle-income countries (LMICs) facing chronically high prices and delayed access to innovative treatments. As biologics increasingly dominate therapies for cancer and non-communicable diseases, affordability is highly dependent on timely biosimilar competition. In this pivotal ecosystem, India plays a significant role as the ‘pharmacy of the world’ by supplying generics and biosimilars to the Global South at scale. However, renewed EU-India Free Trade Agreement (FTA) dialogues risk undermining this role through TRIPS+ intellectual property (IP) provisions, particularly data exclusivity (DE). While the WTO-administered TRIPS Agreement does not mandate DE provisions, bilateral trade agreements often find ways to impose these DE periods that delay biosimilar approval regardless of patent status. Evidence from earlier EU and US trade agreements with other countries shows that such provisions prolong periods of exorbitant pricing, rescue market transparency, and raise public health expenditures by government units. The subsequent negative spillovers would disproportionately affect LMICs reliant on India’s ability to exercise flexibility in their regulatory commitments for affordable medicines, showing the important intersection of trade policy as a determinant in access to global medicines.
Key Points to Note
- Biologics account for a growing share of essential medicines, and yet only around 20% of monoclonal antibody sales occur in the LMICs, despite having the highest disease burdens
- India supplies a majority of generics and biosimilars used in LMICs, including over 80% of the HIV medicines supplied to the African subcontinent
- Data exclusivity is not a mandate under the WTO’s TRIPS Agreement under Article 39.3 but is frequently imposed through bilateral FTAs as TRIPS+ provisions
- Empirical evidence shows that extended DE periods can delay biosimilar entry beyond how much a patent hinders, increase health spending, and reduce price competition
- The EU-India FTA negotiations risk reshaping global biologics markets with significant implications for India.
Core Analysis
The resurgence of the EU-India FTA negotiations comes at a time when biologics are changing the way pharmaceutical markets function worldwide. These medicines, derived from living organisms and original active ingredients with complex manufacturing processes, command unaffordable prices. This strains the access and affordability of necessary medicines even for people in advanced economies, and this effect is further exacerbated in the LMICs. A single course of biologic cancer treatment represents multiples of annual per-capita income in the LMICs, and this makes access largely unattainable if not for cheap alternatives.
While the EU often frames and extends DE provisions as a neutral measure, it is certainly far from being uncontested. The European Parliament has long expressed concerns over DE obligations through bilateral deals that could undermine access in LMICs, as early as 2007 that the European Commission refrain from these provisions during the EU-India FTA talks. Actors in the public health forum within the EU have also warned that these provisions significantly delay biosimilar entry into markets and this is consistent with assessments of prior EU agreements. Specifically, when appraising the EU-Colombia FTA deal, it was identified that DE provisions cost additional expenses of $396 mn in Colombian public health expenditure. This points to a divide between the EU’s trade priorities and regulatory obligations in public health, questioning the validity of pursuing DE measures alongside its stated global health commitments.
Biosimilars, while scientifically complex, have the capacity to substantially reduce prices in the presence of active competition, and studies depict that biologics facing biosimilar competition experience average price declines of over 50% within five years of entry. This was also seen with drugs such as Bevacizumab and Pegfilgrastim, with reductions over 60%, but these gains depend really on regulatory pathways that allow for biosimilars to enter post patent expiry. This is the point where data exclusivity further disrupts the mechanism by restricting regulators from relying on extant clinical data, extending market exclusivity and access periods beyond patent exclusivity.
In the context of the FTA negotiations between the EU and India, introducing DE through bilateral agreements would impose constraints on Indian regulators from approving biosimilars for fixed periods of 6-10 years, and this means a significant denial of access for millions of patients in the LMICs carrying high disease burdens. This is also evidenced by the case of Jordan, where nearly 80% of the medicines launched without patent protection still lacked generic competition due to DE provisions. Thus, this FTA functions not only as a trade lever but as a significant determinant of market access to essential medicines in the Global South, streamlined by India’s position as a large domestic and critical exporter to LMICs.
Policy Implications
- Prior EU agreements provide evidence towards excluding DE measures, patent term extensions and other TRIPS+ IP provisions from the EU-India FTA to preserve regulatory flexibilities embedded in the WTO’s TRIPS provisions, conferring important implications for access to medicines in LMICs.
- The bilateral agreement ideally benefits from a safeguard clause reaffirming India’s right to the usage of originator data for approving biosimilars in a timely manner, to reduce legal uncertainty, and help protect supply chains serving LMICs
- The EU and India should incorporate transparency obligations on biologic pricing, exclusivity periods, and market entry to support procurement and accountability
- On a macro level, aligning trade policy with global health goals is essential to achieve the type of economic integration that does not exacerbate inequalities in access to essential medicines.
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