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PHARMACEUTICAL PATENTING IN INDIA

INTRODUCTION

Pharmaceutical patents are contentiously regarded as a method adopted by businesses that disable the common people to get access to life-saving drugs and public health. Contrary to the thinking inculcated, innovation and ingenious steps adopted by pharmaceutical companies are the propellants adopted by the pharma companies to facilitate and procure investment for the purposes of Research and Development. Approximately 80% of pharmaceutical companies’ total revenues come from novel strategies, which are protected by patents. It is true that there are substantial costs associated with creating and delivering a new drug to the market, but it is also the case that successful drugs often have a much higher return on investment.[1] Pharmaceutical companies encounter a conflict between issuing patents and protecting the right to health.

A fundamental and important Fundamental Right, the right to health is guaranteed by Article 21 of the Indian Constitution, and in the current situation, there is not much justice being done to it, as lifesaving drugs are granted monopoly as a result, making them inaccessible to the general public because of their exorbitant prices. The fact that these drugs are not affordable always proves to be a major barrier to their accessibility thus being seen as Access to Public Health being denied. Due to the high costs associated with drug research and development, it is an ethical dilemma whether the public’s rights and interests should be protected or those of the private sector.[2] In this case, a patent system that maintains an equal balance between public and private interests is a better way to resolve the problem which is apparent in the Indian Patent System.

Pharmaceutical patents developed and still used today, are meant to safeguard businesses’ financial investments and recoup costs associated with the development, creation, and promotion of new medications.[3] Increasing patent exclusivity reduces the risk associated with the long development process, encouraging businesses to conduct research and develop new treatments.[4]

THE CONCEPT OF PHARMACEUTICAL PATENTING AND THE PHARMA SECTOR IN INDIA

Considering that Indian pharmaceutical companies are the largest suppliers of affordable active pharmaceutical components as well as finished products for domestic use and in developing nations, pharmaceutical patenting is especially pertinent to public health concerns. Patenting products could ruin these sectors, raising drug prices in the process and aggravating the current health issues in regions where these drugs are delivered.[5] Because of government regulations promoting private ownership, the majority of pharmaceutical companies are privately owned and have dominated the local market and stifled the competition that might arise from foreign. The pharmaceutical companies on the global market do not have a first-mover advantage in India since the drugs introduced on the international market have been duplicated and introduced here locally.[6]

India is the world’s largest supplier of generic medicines and vaccines as well as cheap vaccines. Over the past nine years, the Indian pharmaceutical industry has grown at a CAGR of 9.43% and is ranked third in pharmaceutical output globally.[7] Besides manufacturing medications for its own population, India is also a major exporter of them. Indian generic medication makers hold a greater share of the market than huge MNCs in only two nations worldwide.[8] Health insurance coverage in India and the cost-effectiveness of medications have both affected the development of India’s patent laws and participation in international intellectual property agreements. The key challenges faced by developing countries including India are the accessibility and affordability of pharmaceutical products for both preventive and curative purposes. Pharmaceutical patents are granted to substances wherein new entities involve one or more inventive steps.[9] TRIPS (Trade-Related Aspects of Intellectual Property Rights) legislation significantly improved patent protection for the pharmaceutical industry. The India Patents Act of 1970, which replaced the 1911 Act and came into effect in 1972, had a significant impact on the pharmaceutical industry. Developed countries typically favored product patents, but the Act exclusively protected process patents. By creating this patent system, Indian pharmaceutical companies could manufacture generic medications that were otherwise protected by international patents.

PATENTING OF PHARMA PRODUCTS AND PROCESSES IN INDIA

In 1994, India signed up for TRIPS in the Uruguay round of the General Agreement on Tariffs and Trade (GATT). Thus, product patents were implemented in India by January 2005.[10] Specifically, section 3(d) of the Patents (Amendment) Act of 2005[11] provides the Indian government with a key tool for “restricting the extent of product patent protection.” It installs a stricter standard for securing patents. A common abusive patenting practice described by critics as “evergreening” is the practice of pharmaceutical companies making minor changes to existing drugs to extend patent protection which is obviated by Section 3(d) of the Indian Patents Act, 1970[12]. A pharmaceutical company introducing a new version of its product must demonstrate that the new version is “therapeutically more beneficial” than earlier versions that had expired patents. Foreign investment in India will be deterred, at least in the near future, by the continued ambiguity surrounding what may actually be patentable under the Patents (Amendment) Act of 2005 as well as the limited precedent set by the Court’s decision in Novartis AG v. Union of India,[13] which mandated that drugs must meet a certain level of enhanced efficacy.

The DOHA declaration’s paragraph 5(b) states that “members have the right to grant compulsory licenses” and the right to decide the conditions for doing so. This affirms the rights of nations in this regard of the grant of compulsory licensing. In March 2012, Natco Pharma received India’s first TRIPS-mandated compulsory license because it was too expensive to make Bayer’s Nexavar, a medication for liver cancer (sorafenib). Currently, Natco can offer the medication as opposed to Bayer’s Price with a 35% reduction in prices.[14]

According to Article 27 of the TRIPS Agreement, patents are available for inventions in all disciplines of technology, provided that they are new, involve an innovative step, and can be applied to industry. Many TRIPS terms, including “inventive step,” have not been defined, fortunately for WTO members like India. By leaving concepts like “inventive step” open to interpretation, Article 27 allows India to define its patentability standards.[15] Patentable pharmaceutical products must, for example, show an improvement over their known efficacy.[16] A National Pharmaceutical Policy was adopted and announced by the cabinet in 2012. It was announced in May 2013 that a new price control order would be implemented for pharmaceuticals. As a result, the national list of essential medicines now controls the price of several medications.[17] Furthermore, due to the challenge of product patents, few pharma giants have undertaken Drug Discovery programs.[18]

CONCLUSION

Patent protection promotes research and development and replicates foreign direct investments into the industry, which fuels domestic research and development. In an industry of replicated medications, patent protection would enable domestic pharmaceutical firms to develop highly innovative medicines. The use of compulsory licensing should be permitted only if it promotes the public interest and does not significantly reduce the incentive to develop a new drug. Compulsory licensing can increase the public interest while still maintaining the incentive to develop new inventions. The patent regime and other laws do enough to prevent a sharp rise in drug prices in the long run, so it benefits India in the long run. Product patents were included in the Indian Patent Regime without having the deleterious effect anticipated. This policy’s five-year exclusion of patented pharmaceuticals may be meant to encourage pharmaceutical companies to innovate is a commendable approach. Pharmaceutical patenting in India is therefore a sensitive and crucial subject since poor patents burden society, but good patents foster innovation and technological advancement. As a result, it is imperative that the examination and subsequent patent grant be of high quality, consistent, and uniform to ensure that the patenting does not hinder access to public health.

Author(s) Name: Aathira Pillai (Maharashtra National Law University, Mumbai)

References:

[1] Shilpi Kumari, ‘Patents In Pharmaceutical Industry’ (Mondaq, 09 March 2020) <https://www.mondaq.com/india/patent/900672/patents-in-pharmaceutical-industry>  accessed 09 December 2022

[2]Ashmita Agrahari & Rupali Khanna (2020) 3 (3) International Journal of Law Management <https://www.ijlmh.com/wp-content/uploads/The-Globalization-of-Intellectual-Property-Rights-and-Innovation-in-Patent-Protection.pdf>  accessed 02 January 2023

[3] Allie Nawrat, ‘From Evergreening to Thicketing: Exploring the Manipulation of Pharma Patents’ (Pharmaceutical Technology, 11 November 2019) <https://www.pharmaceutical-technology.com/features/pharma-patents-manpulation> accessed 09 December 2022

[4] Anthony Walker, ‘Pharmaceutical Patents: An Overview’ (Alacarita) <https://www.alacrita.com/blog/pharmaceutical-patents-an-overview>  accessed  December 9, 2022

[5] Abhayraj Naik, ‘Pharamceutical Patents and Healthcare’ (2022) 2 (1) Socio Legal Review <https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1017&context=slr>  accessed 02 January 2023

[6]Ibid

[7] ‘Pharmaceutical Companies in India, Indian Pharma Industry- IBEF’ (India Brand Equity Foundation) <https://www.ibef.org/industry/pharmaceutical-india>  accessed December 9, 2022

[8] Ibid

[9] Patents Act 1970, s 2(ta)

[10] Shubhra Khanna, ‘TRIPS, Pharmaceutical Patents And Health Care For The Poor In India’ (2022) ILI Law Review <https://ili.ac.in/pdf/paper5.pdf>  accessed 02 January 2023

[11]Patents (Amendment) Act 2005, s 3(d)

[12] Ibid

[13] Novartis AG v Union of India (2013) Appeal (Civil) No. 2706-2716/2013.

[14] Rory Horner, ‘The Global Relevance of India’s Pharmaceutical Patent Laws’ (2013) 48 (31) Economic & Political Weekly <https://hsrii.org/wpcontent/uploads/2014/07/The_Global_Relevance_of_Indias_Pharmaceutical_Patent_Laws-1.pdf>  accessed 02 January 2023

[15]   TRIPS Agreement< https://www.wto.org/english/docs_e/legal_e/27-trips.pdf>  accessed 10 December 2022.

[16] Patents Act 1970, s 3(d)

[17] ‘The Drugs (Prices Control) Order, 2013’ <https://www.nppaindia.nic.in/wp-content/uploads/2018/12/DPCO2013_03082016.pdf>  accessed 20 December 2022.

[18]Mathiers Evers M, et al., ‘Pharma’s Digital RX: Quantum Computing in Drug Research and Development’ (McKinsey, 09 August 2022) <https://www.mckinsey.com/industries/life-sciences/our-insights/pharmas-digital-rx-quantum-computing-in-drug-research-and-development>  accessed 20 December 2022.