GENEVA (Reuters) – India and Brazil launched a trade dispute against the European Union and the Netherlands yesterday, saying their seizures of generic drugs were hurting healthcare in poor countries and disrupting international trade.

The row turns on one of the most sensitive issues dividing rich and poor nations — the intellectual property rights of corporations such as makers of pharmaceuticals versus access to affordable medicine for people in developing countries.

India said the repeated seizures were based on allegations of the infringement of intellectual property rights in the country of transit, even though the generic drugs in question were legal in their countries of origin and destination.

“Our first concern is that intellectual property issues are being raised on drug consignments where they are absolutely not merited and the fact that international transit guarantees are being violated,” India’s ambassador to the World Trade Organization, Ujal Singh Bhatia, told a news conference.

He said the seizures were part of a concerted effort by rich nations to stiffen the current intellectual property regime and claw back special treatment for developing countries.

EU officials, who argue that their checks aim to identify counterfeit medicine rather than stopping people in developing countries from getting treatment, had been hoping to negotiate a way out of the dispute.

EU trade spokesman John Clancy said the European Commission had been discussing the problem with India for months and signalled its intention to modify legislation to clarify rules on medicine in transit.

“The EU remains fully committed to ensuring that people in the world’s poorest countries can access affordable medicines,” Clancy said in a statement.

Bhatia said India had repeatedly asked the EU and Dutch authorities for a list of seizures so that India could investigate companies making fake drugs.

“Till today we have not received details of even one consignment where there was an allegation of sub-standard medicines,” he said.

The case dates back to the seizure by Dutch customs in December 2008 of a blood pressure drug en route from India to Brazil.

Dutch officials seized 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 — enough to treat 300,000 people for one month — had been exported by India’s Dr Reddys Laboratories, which flew them back to India after customs released them.