India's export of pharmaceutical products continues to face the hurdle of in-transit seizures at some foreign ports especially in Netherlands by the customs authorities there. The latest instance is that of Aurobindo's consignment of HIV drug. The Dutch customs authorities have confiscated the consignment apparently on a complaint from GSK. Last January, a consignment of bulk drug, losartan, belonging to Dr. Reddy's was confiscated by Dutch customs. The cargo was to reach Brazil. In November 2008 another export consignment belonging to Ind-Swift on its route to Venezuela was seized by Netherlands customs on charges of it being counterfeit. The drug was pantoprazole, in pellets form to be made into formulations in Venezuela, where Ind-Swift already has a marketing right for the product. Such increasing incidents of confiscation of export consignments can hit India's pharmaceutical exports to Latin American countries in the long run. When the consignment is not meant for the European markets and the exporters are only using the European ports for transit, it is unfair to detain such cargo. According to Pharmexcil, the reason EU has given for the seizures was that these drug consignments violated intellectual property rights and are, therefore, counterfeit. The pharma exporters have been using the EU ports to send their cargo to Latin American countries for financial viability. If the drug companies use the alternative routes to send the medicines, it is likely to impact the cost competitiveness of Indian generic drugs.

Now, this being an issue involving the governments of other countries, active intervention of Indian authorities is called for. The issue is difficult for the commerce ministry to handle as the EU has made the rules related to patent very strict of late. The EU rules stipulate that any product which has been granted patent in EU countries is liable for confiscation if transported through these countries under their patent law. At the same time, it is important to note that action by EU countries come after WHO's recent move to bring a new definition to counterfeit medicines on the basis of a proposal by the WHO-backed International Medical Products Anti-Counterfeiting Taskforce. WHO's initiative to combat counterfeiting in drugs is understandable considering the fact that such products are posing a serious threat to public health. But, EU action is beyond this perception. By resorting to confiscation of Indian drug consignments in transit, governments of EU countries are actually blocking the availability of cheaper generic drugs from India to poor and developing countries. This has to be stopped at any cost. India's decision to file a complaint at the World Trade Organisation against such seizures of drug shipments by EU members is thus a long overdue measure. India should seek support of Brazil and other Latin American countries also and jointly move WTO against this unfair trade practices indulged in by the European nations.