India and Brazil are to launch a trade dispute at the World Trade Organisation (WTO) against the European Union in their long-running row over EU seizures of generic drugs, senior diplomats said.

The case goes to the heart of one of the most sensitive disputes between rich and poor countries -- the need to provide affordable medicine to the poor versus the need to encourage research in new medicine through patent protection.

‘We have taken the decision to launch consultations,’ India’s WTO ambassador Ujal Singh Bhatia told Reuters. ‘We are just completing the procedural work.’ ‘As of now the decision in Brasilia is to move forward,’ Brazil’s WTO ambassador Roberto Azevedo said.

The two said it was not yet clear when the request for consultations, the first formal step in a dispute, would be notified to the WTO.

The two countries have threatened a formal WTO case since Dutch customs seized an Indian generic drug to treat high blood pressure last December while it was in transit for Brazil.

But comments were the first confirmation that the two major emerging powers were moving ahead.

It could be some time before the consultations request is formally lodged as the two countries prepare their legal positions, await further documents from the Netherlands, and coordinate their stances.

‘We are moving in that direction. Unless there’s progress in the EU it seems to be an inevitable course,’ Azevedo said.

India and Brazil say last December’s seizure, since repeated, is part of a pattern by rich nations to claw back special treatment agreed for poor countries.

The EU says it has the right to inspect generic drugs in transit to protect its citizens and people in developing countries from fake medicines.

Last December’s seizure involved a shipment of losartan, the generic name for Merck & Co's blood pressure drug Cozaar, which was developed jointly by Merck and E I du Pont de Nemours & Co.

The drugs had been exported by India’s Dr Reddys Laboratories Ltd which flew them back to India after customs released them.



Formally, under WTO rules, India and Brazil would launch separate complaints, although these could be consolidated into a single case.

‘The legal teams are already talking to each other and getting ready,’ Azevedo said. ‘If there’s a claim by one then the other has to make a claim that is consistent.’

REUTERS