Dive Brief:
- The European Medicines Agency (EMA) has suspended 700 generic drugs manufactured in India, including drugs for diabetes, depression, hypertension and other medical conditions, due to flawed clinical studies conducted at a CRO in Hyderabad, India. The ban started in January and the number of drugs included in the ban has grown considerably since then.
- The free-trade agreeement (FTA) talks between the E.U. and India are in jeopardy because of India's reaction to the E.U. ban on over 700 pharma products.
- At stake for Indian is up to $1.2 billion worth of drug exports.
Dive Insight:
The talks were supposed to be happen on August 28, but in light of the ongoing ban on Indian-manufactured, GVK Biosciences-tested products, and India's reaction to it, it seems like that's not going to happen. It's another in a series of setbacks since the two countries started negotiating the FTA in 2007.
The Indian Pharmaceutical Alliance (IPA), a domestic pharma industry lobbying group, considers the ban "arbitrary." One reason, according to D.G. Shah, secretary general of IPA, is that the drug inspector sent by France was "not competent to vet such data."
Regardless, the ban will be costly to both sides. Of the $15.4 billion worth of pharmaceutical exports that India has in 2014-15, roughly 20% were exported to the E.U. On a larger level, overall trade between India and the E.U. has decreased. Between 2013-14 and 2014-15, India's exports to the E.U. decreased by 4.4% to $49.3 billion, and imports decreased 2.2% to $48.8 billion.
Both sides are determined to move forward with the FTA. But this ban remains a sticking point.