NEW DELHI: A growing number of countries are adopting India's intellectual property regulations, which give enough flexibility to local companies to produce generic versions of popular drugs to safeguard public health.

Although multinational companies have criticised India for being lax in enforcing intellectual property (IP) laws, countries such as China, Argentina and the Philippines are adopting similar provisions.

Last month, China amended its IP laws, allowing local companies to produce low-cost versions of patented drugs under certain conditions, including meeting public health needs. Multinational drug makers say the use of the provision should be limited to national emergencies.

Experts say IP laws were earlier framed in the West and adopted by developing countries. "Strangely, India is now setting the IP laws for developing countries," said Shamnad Basheer, a Kolkata–based professor of IP Law.

According to DG Shah, secretary-general of Indian Pharmaceutical Alliance, while the move to amend IP laws in China had been underway for some years, the trigger was provided earlier this year by India's decision to grant compulsory licence to Natco Pharma. "It was a question of who will bell the cat," Shah said.

In March, India issued the country's first compulsory licence, allowing Natco to legally manufacture and sell a low–cost version of German drugmaker Bayer AG's patented cancer drug, Nexavar, at 3 per cent of the original medicine's price on the grounds that Bayer's drug was not meeting public health requirement.

A month's dosage of Nexavar costs Rs 2.8 lakh, making it unaffordable for the poor. Bayer's appeal with the intellectual property appellate board is pending.

Multinational companies as well as some countries, including the US, have been critical about India's implementation of IP laws and the liberal use of the compulsory licence provision.

However, MNCs disagree that India could have been a trigger for China's move. Tapan Ray, director-general of OPPI, the representative body of global drugmakers in India, said, "Amendment of a law is the prerogative of the country concerned, and it is specific to the country's requirement."

India and China, which together account for about a third of the world's population, form a critical market for MNCs. IP laws favourable to MNCs enable them to increase sales in developing countries.

"If two or three big countries take similar steps, others will follow," Shah said.

Prathiba M Singh, managing attorney at Delhi-based law firm Singh & Singh, said India's IP laws strike a balance between protecting innovation and safeguarding public health. "Developing countries are now following our model," she said.

New Delhi ushered in a new patent regime in 2005, allowing patent holders 20 years exclusive marketing rights. But the government also put in certain safeguards, such as Section 3(D), which prevents patent on incremental innovations of known compounds unless they provide enhanced therapeutic efficacy. This controversial stipulation was unsuccessfully challenged by Swiss drugmaker Novartis.

In May this year, Argentina announced new guidelines for patents, which among others, listed strict conditions similar to the ones provided in Section 3(D) of Indian IP laws. Thailand, too, is pushing a similar clause, while the Philippines has already adopted one.

"The benefits of incorporating the provisions are apparent to many countries," said Leena Menghaney, campaign co–ordinator (India) at Medecins Sans Frontieres, a health group that has been coordinating campaigns globally to ensure that developing countries do not "blindly adopt US and EU patent laws".