Thursday, November 29, 2012

Is India data secure for EU?

India, with 1.2 billion of its people looks very wealthy because of its man power. India also has very high amount of people with diseases, clinically called patients. This large number of "patients pool" available in India attracts foreign medical drug companies to outsource their clinical trials in India. In order to introduce a new drug in market, drug firms should provide clinical trial data regarding efficacy and safety of the product to regulatory authority (e.g., FDA in US). These regulatory data is mostly generated from developing countries like India with huge investment. As per the WTO agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), these regulatory data has limited time protection for new drugs. However, research and development in pharmaceuticals not always results in entirely new drugs. "Variants" of existing drug would not be considered as entirely new drug for issuing patents. But still the 'variants' or 'new chemical entities' or 'second generation drugs' need to be field tested and the data regarding safety and efficacy of the drug need to be submitted to the regulatory authority in order to introduce the drug in the market. Anyway the regulatory data of variants does not get any kind of protection. Huge drug firms from US and EU demands protection for regulatory data independently of patents. That is, whether new drug or not the clinical trial data need to be protected from unauthorized use of these data by third parties. This is also referred as "data exclusivity".

India is referred as "pharmacy of developing world" due its generic drug making companies which exports many essential drugs at affordable price. In order to introduce generic medicine in the market, the generic drug companies also have to provide clinical trial data. But these companies proves that the generic drug is equivalent to the original drug and uses the regulatory data of the original drug inventor. This is called "free riding". That is, without any investment on regulatory data, the generic companies exploits the data provided by the inventor for commercial use. Possible effects of regulatory data protection would be delay in generic variants of costly drugs, which has the potential to put public health in developing countries in jeopardy.

The drug firms in US and EU are hesitant to invest on pharmaceuticals and agricultural chemical sectors. Since, India does not seems "data secure" to them. This hesitation created by the inadequate data security in India results in blockade of possible technology  and investment transfer in the aforementioned sectors. In 2007, Satwant Reddy committee submitted a report concerning "Data Protection Provision" and it has recommended 5 years of data protection in India for the pharmaceutical products with exemption for life threatening diseases such as HIV/AIDS.

Data exclusivity has many other complex aspect attached to it. However, there need to be a balance between attracting investment and technology through enhanced data protection and public health. The TRIPS agreement ensures right of economical access to healthcare and protection of public health in developing countries (i.e., compulsory licensing...etc ). So, India must take a liberal view on data exclusivity and should make maximum use of flexibility provided by TRIPS agreement.


Monday, November 26, 2012

Why digitization of Cable TV operators in India?

The Cable Television Networks (Regulation) Act, 1995 was amended in 2011 with a view to ensure good quality reception of television channels through complete digitization of all cable television networks across the country. However, the implementation of this act is planned in phased manner. As a part of first phase, Government of India has ordered the cable television networks in all metropolitan cities (Delhi, Mumbai, Kolkata and Chennai) to digitize their operations. So, it becomes mandatory for every customer to install a "Set Top Box" to have an uninterrupted service. The act also requires that every "pay channels" to be attached with "addressable systems" in the set top box. Through this customer can have his/her own choice of television channels subscription. Along with this the cable television operators are required to add the channels specified by the government in their basic service tier. This act also require the cable operator to submit report on total number of subscribers, subscription rates and number of subscribers for free-to-air and pay channels.

Earlier in 2009, Government of India ordered television operators to include at-least two Doordarshan channels in their "prime band". The prime band is set of frequencies receivable by a conventional television set without any additional tuner. With this prime band an operator can provide some 100 television channels. By digitizing the cable network, the concept of "prime band" would be done away with. And consumer can have more than 100 channels with better picture quality. Presently, the audience measurement is done through TRP (Target Rating Point) which plays the key role in getting advertisement to the broadcasters. So, the broadcasters tend to use their resources towards getting good TRP, that is the broadcaster would like to include their channel in cable companies which provides service for more number of people. And the cable companies would expect a hefty "carriage fee" from broadcasters to get on favorable frequency. Since, the digitization provides better subscriber base assessments, the "number of subscription" will largely take that role of audience measurement, while TRP would play lesser role and the broadcaster can effectively use their resources for the content. Moreover, the tariff rates of cable television operators can also be regulated to restrict sporadic increase in tariff rates.

In short, the digitization of cable networks will be beneficial for people as well as broadcaster and it would also allow smooth regulation of cable television sector.  

Sunday, November 25, 2012

Legal framework, Political Parties and their Money

A democratic country requires vibrant political parties and competitive elections. The parties need to be organised and formalized for functioning effectively. In support of this aspect, "Representation of People's Act, 1951" enables parties to get registered itself with Election Commission and also seek a declaration from the parties which contains the provision that the party has faith and allegiance to the Constitution of India and to principles of Socialism, Secularism and Democracy and would uphold the Sovereignty, Unity and Integrity of India. Further, under the "Election Symbols (reservation and allotment) Order, 1968" Election Commission specifies a party as recognized state party or national party based on certain conditions. If a party has secured 6% of total valid votes from four states in the last general election to Lok Sabha or State assembly and has returned at-least 4 MPs to Lok Sabha OR the party's elected members accounts for 2% of total Lok Sabha constituencies and these members are from at-least 3 states, then that party would be recognized as "National Party". If a party other than the 'National Party' has secured 6% of the total valid votes in last Lok Sabha or State assembly election in concerned state and has returned at-least 2 MLAs or 3% of total MLA constituencies in that state, then that party would be recognized as "State Party".The recognized parties get preference during allotment of symbols, free broadcast/telecast time in state-owned media organisations, free electoral rolls..etc.

Political parties perform important functions of country's political system. Those are,
  • Mobilizing and integrating citizens
  • Articulating public interest
  • Formulating public policy 
  • Recruiting political leaders and
  • Organizing parliament and government. 

To perform these functions, financial resources are crucial, traditionally political parties raised fund from membership dues and donation from private individuals. To support and monitor the financial aspect of political parties "Election and Other Related Laws (Amendment) Act, 2003" was passed in 2003. This Act made the contributions to political parties by individuals and companies tax deductible and also made it mandatory to submit the list of donors who have donated more than Rs. 20,000 to the Election Commission to claim tax exemption.

Despite the existing legal frameworks, fund raising and fund management of political parties raise many concerns like "Black Money", "Corporate-Political Party nexus"...etc. Recently such a concern was raised by Janatha Party leader Subramaniam Swamy. In his letter to Election Commission, Swamy told that the loan of Rs.90 Crore given to Associated Journals Pvt Ltd by Congress Party has violated the Guidelines and Rules established by Section 29A to C of Representation of People's Act 1951 and 13A of Income Tax Act 1961. And he also claimed that the Congress Party was liable to be de-recognized. In response, the Election Commission clarified that Congress has not violated Section 16 (A) of Election Symbols (Reservation and Allotment) order, 1968 which empowers the commission to de-recognize a party.

This controversy has exposed the lack of effective legal framework to regulate and monitor the manner in which political parties use their funds and also raise funds. In India, the party and election financing regulation was started in 1968. The then Prime Minister Indira Gandhi has banned Corporate donations to political parties targeting the Swathanthra Party which was free market-oriented. However, in 1985 the Corporate donations were allowed once again by amending the Companies Act. In 1990, the National Front government had set up Dinesh Goswami committee on Electoral Reforms. The committee recommended state funding of elections in form of limited support in kind for vehicle fuels, rental charges for microphones... etc. It also advocated a ban on corporate donations to political parties. In 1998, Gupta committee recommended for partial state funding of elections, but the key recommendations of these committees were not accepted. Due to the ineffectiveness of "Party Financing and Election Expenditure Laws" issues like demand for black money to finance parties and campaigns, undercover expenditure during election and party's tendency to select candidates based on their ability to finance elections were rising. Potential remedies could be borrowed from successful initiative of other countries. Few of the recommendations are state funding of elections, making small-sum donors more attractive to party and as well as donors and raising the ceiling for corporate donations. These suggestions might reduce malpractices in fund raising to some extent. If the funding of political parties become more transparent, then it will result in healthier political environment.

However, another issue remains unaddressed i.e., regulating the manner in which political parties are using their fund. The fund received by Political Parties are tax exempted. They can use their fund for "political activities", but there is no definition of what construes "political activity". Certainly, trying to define the political activity will limit the activity that a political party can perform. Instead of trying to set rules for "what a political activity is?", the regulations can focus on "What is not a political activity?". For example, a commercial activity which yields financial profit cannot be a political activity. The political parties which are forming the government of the country cannot be a commercial venture. So, a legal framework can be proposed to restrict the financially profit making activity of the political parties. Unlike the "Model Code of Conduct for Political parties and Candidates" which is in force during the election times, the proposed legislation should be in effect at all the time with Election Commission of India.