The global world is constantly grappling with the issue of accessibility and affordability of life-saving drugs. The right to health is the right of every individual in each State as it is a right granted by nature itself. The governmental authorities are often concerned with this issue and are trying to solve it by the adoption of middle-path wherein the interests of both the stakeholders namely the patent holders on one hand and the society on the other. The high cost of research and development that goes into the manufacture of medicine and the issue of accessibility to affordable medicines are both very controversial issues and each side has its own valid points, thus any rigid or adamant attitude from any side will adversely affect all especially the common people.
The balance between access to affordable medicines and preserving intellectual property rights has been tried to be achieved by the TRIPs Agreement by the inclusion of flexible mechanisms of parallel importation, compulsory licensing, ‘Bolar’ exemption, and the like, which will be discussed in the subsequent segment. These provisions have increased research benefits and protection of exclusive rights of the patentees but conversely, it has also created obstructions in accessing medicines at affordable prices. It is a known fact that the patent protection grant and the knowledge of getting incentives for research, encourage the pharmaceutical companies in increasing their investment, as they are assured that they will be able to demand high prices from affluent patients, from governmental agencies, and from the non-governmental organizations. Moreover, this increased investment, in the long run, benefits a large number of patients because after the patent protection expires the prices slash down drastically, which in the end is beneficial to the public itself, thus taking into account the interests of both the sides.
Saving of lives is the true goal of innovation of medicines and this should never be forgotten by the pharmaceutical companies and trade negotiators. Profit should always be a means to this end, not vice- versa. The world can hope to effectively ensure the safety, security, and well-being of the population around the globe by keeping this principle in mind and by achieving a better understanding of the modern world health situation. Thus we see that over-protection and under-protection being both sides of the debate can be solved only when further insights of the legal debate are taken up.
The Central Government grants compulsory license only in cases of national emergency, extreme urgency, or in case of public non-commercial use. Also, certain essentials need to be proved before the compulsory license can be granted namely, it can be granted only after the expiration of three years from the date of grant of a patent, and the person interested has to substantiate to the Controller that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or that the patented invention is not available to the public at a reasonably affordable price, or that the patented invention is not worked in the territory of India. Moreover, it has also had to prove that the applicant reasonably tries to procure an ordinary license, failing which he has approached the Controller.
Thus the intention of the legislature is absolutely clear that it has to be granted only in exceptional cases. Since it is an exception to the rights of the patent holder, it must be given a restricted meaning and should not be used commonly. With respect to patented pharmaceutical products, compulsory licensing is allowed for manufacturing and for exporting to any country that does not have sufficient manufacturing capability. Consequently, the contention of various generic companies of increasing the number of the grant of compulsory licenses does not hold much water.
Conceptually, parallel importation means that it’s not an infringement to import a patented product, provided that such import was from an exporter who was duly authorized by the patentee to sell or distribute the product. Further, once the importation has been legitimately carried out, the patentee has no control over what transaction is carried out on that product, and this concept is known as the Principle of Exhaustion which is well supported by the TRIPs agreement. This concept strikes at the root of the entire patent protection regime and the exclusive monopoly right attached to it. The segment of the society favoring its inclusion has not been able to defend their claims of accessible and affordable medicines as a majority of life-saving drugs have already gone off-patent due to the expiry of the term of protection. Thus they are already available at affordable prices and moreover are also being governed under the Drug (Prices Control) Order 2013.
The ‘Bolar’ exemption or the research/experimental use exemption permits researchers and product manufacturers to make certain use of a patented invention. A generic drug is either the bio-equivalent of the patented drug or is bio-similar with the patented drug and is available at much lower prices. The grant of such an exemption facilitates the generic manufactures to come up with their drugs as soon as the patent expires, rather than undergoing the lengthy process of obtaining approval from the Food and Drug Authority after the expiration of the entire term of the patent.
The provision was for the first time recognized by the Hatch-Waxman Act (Drug Price Competition and Patent Term Restoration Act, 1984) of the U.S. In fact, even prior to this Act, the law of the U.S. had exempted the use of a patented product for reasons of research or experimentation and not for profit purposes. It was then known as the ‘Doctrine of Experimental Use’. It was based upon the equitable concept that a court will not redress a de minimis use of a patent. The way to this exemption was paved by the U.S. district court decision of Roche Products, Inc. v. Bolar Pharmaceutical Co., wherein the court for the first time authorized the practice of making or using the patented drugs for the only purpose of taking regulatory approval to market the generic copies of such patented drugs.
However, the problem that arises in most of the cases is that it becomes really difficult to decipher as to when the permission/approval is being sought for research purpose and when the intention behind seeking the approval is the unfair commercial use of the patented product.
EVERGREENING OF PATENTS
Ever-greening of patents is a procedure adopted the pharmaceutical companies wherein they make slight changes in their patented invention and thereby obtain another patent, thus extending their term of protection. This in turn obstructs accessing medicines at affordable prices. To curb this practice section 3(d) was amended to include an additional layer of protection for pharmaceutical companies to prove the ‘efficacy’ of their invention in addition to the traditional three requirements for the grant of patent namely, novelty, inventive step, and industrial application. The court decided in the landmark Novartis case that the term ‘efficacy’ for the purposes of pharmaceuticals would mean ‘therapeutic efficacy’, but there are no clear guidelines with respect to the precise meaning of the term ‘efficacy’. This provision holds well till the time its application is restricted in controlling the ever-greening of patents. Any other use of this provision will amount to misuse.
Data Exclusivity provides for the protection of data submitted to the authorities by the patent applicants in order to obtain patent protection. Generally, the expiry of the term of patent protection implies that the information behind the making of the patented invention is no longer protected and the authorities are free to make that information publicly available so that a person skilled in the art can work the invention. The inclusion of this concept acts as an extra layer of protection as the information still can’t be given out to the public. This extra protection is unwarranted for as it does not fall under the TRIPs mandate and neither is this protection much needed as the generic companies do not actually seek access to the data rather they only rely on the data of the clinical trials for getting approval from the Drug Controller of India.
The Indian Patent Act in toto provides only a term of twenty years of protection to the patented drug, and even that protection is subjected to exceptions in the form of compulsory licensing, ‘Bolar’ exemption, and parallel importation. These provisions are the foremost reasons behind the decrease in the innovation and R&D projects in India which further causes a major loss to the in-flow of foreign direct investments in India.
A possible solution can be the adoption of a certain kind of Compensatory Liability Model. This model provides that generic manufacturers should compensate the pharmaceutical company on whose patentable invention the generic company comes up with its bioequivalent or bio-similar product. These generic companies also rely upon the data submitted by the pharmaceutical companies to the Drug Controller of India for obtaining patent protection. Such data is collected by carrying out clinical trials that require huge amounts of investments. The relying upon such data without actually carrying them out saves the generic companies from a huge expenditure, thus that amounts to nothing less than “unfair commercial use” under Article 39(3) of TRIPs. This compensatory model appears to be appropriate, as the cost of bringing a new product in the market will be shared between the generic companies and the pharmaceutical companies. Though the model looks quite feasible from outside its implementation will come with its own hurdles. The amount of compensation must be reasonable and should be within the financial paying capacity of the generics manufacturers. The hurdle will arise in the determination as to what will be a reasonable compensation and in satisfying not just the two parties involved but also the national government and international communities. A universal recognition of this model needs to be evolved which can be accomplished by arriving at a consensus at the WTO level. Furthermore, it is recommended that the protection should be limited to a term of five years and in the course of these five years, the generic companies must negotiate with pharmaceutical companies to obtain access to the data on reasonable commercial terms.
It is high time that India starts investing in innovation, invention, and R&D, as these generic companies have been running for quite a very long time and with India’s global progress in almost all fields, the progress in this field also needs to go up so that India can rank amongst the topmost countries in the Global IP Index. India needs to move from being an imitator to be an inventor.
Author(s) Name: Mahima Mahajan (Assistant Professor, The NorthCap University, Gurugram)