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DRUG PATENTS - THE INDIAN SCENARIO

Introduction

A patent is an exclusive right, which provides the organisation a monopoly privilege in the market for both product or process, offering or rendering true solution to a problem and is issued by the government for a fixed period of time. With the evolvement of the pharmaceutical industry, India has emerged as the “pharmacy of the world” making the drug patenting in India one of the most important and a major concern for not only the people of India but for the entire mankind. Drug patents are covered under The Patents Act, 1970 which deals with imparting patents to inventions that fulfil the criteria of newness, being inventive in nature and conforming to industrial use, along with productivity of the invention. But drug patents in India follow stringent guidelines, making the drugs affordable and accessible to the society at large. The main objective of the patent office, therefore, is to grant patents to innovative inventions only. This not only provides protection to the inventor but also prevents the creation of a monopoly. Hence, drug patents should harmonise with the needs of the people who require it the most.

Applicability Of Drug Patents In India: Backdrop

Pharmaceutical patenting was introduced in India through The Patents and Designs Act, 1911 which had provisions for both products and processes. Various amendments took place in the 1950s regarding compulsory licensing and revocation of patents. But in the year 1970, significant modifications were undertaken in the field of patents. The Patents Act 1970 was enacted which came into force in 1972, repealing all the previous legislations. Section 5 of the Act allowed patents for the process of manufacturing drugs, foods, and products of chemical reactions but excluded the granting of product patents for the same. This step was taken in order to break India’s dependence on foreign drugs and provide affordable and accessible drugs to people. Further, the Act reduced the term of patents from fourteen years to seven years. The period of 1970-1994 showcased the period of generic medicines for India as it became the largest exporter of affordable generic medicines.

The 1990s marked the beginning of a new era with the emergence of the World Trade Organisation (WTO) from the Uruguay round of the General Agreement on Tariffs and Trade (GATT). This further led to the signing of an agreement on Trade-Related (Aspects of) Intellectual Property Rights (TRIPS), integrating IP laws in a comprehensive manner. Due to the said agreement, amendments in The Patents Act 1970 were brought about in three phases. The first phase took place in 1999, whereby the mail-box and EMR provisions were introduced, which were termed as transitional arrangements. For the mail-box provision, section 5(2) was added which invited applications for patents of products to the companies. Further, for the EMR provision, Chapter IV A was introduced. Through the second amendment in 2002, the term of all patents was extended to twenty years and the concept of compulsory licensing was adopted. In the final and third amendment in 2005, the mail-box and EMR provisions, which were dealt in section 5, were deleted in its entirety and product patents were allowed for inventions related to pharmaceuticals, agrochemicals, foods and products of chemical reactions, along with other changes to the fee structure, provision for penalty, filing procedure etc.

Scope of Patentability

India, being one of the countries which opposed the TRIPS agreement, resisted the patenting of drugs, but allowed the patenting of the process of manufacturing the said products. The main concern behind this resistance was the affordability and accessibility of the drugs to people in need. Due to this reason, India used the transition period granted by the WTO and delayed pharmaceutical patenting till 2005.

One of the main contentions of the TRIPS agreement was to provide product patents to the companies, thus granting monopoly privilege to the inventor which disables other manufacturers from producing similar product. Therefore, in order to prevent misuse of such vast power, the Government of India amended The Patents Act, 1970 and added several provisions in the context of examination of applications for drug patents as it cannot oppose the said agreement.

Section 2(1)(j) defines “invention” as a new product or process involving an inventive step and capable of industrial application. Under this section, an invention will only be patentable if it is not known by any party or is sold and bought within or outside India. It should be exclusive and should not come under the radar of public. Further, as per Section 2(1)(j)(a), patents will be granted to an invention having “inventive step” if: (a) it is technically advanced, (b) has economic significance, or (c) both, and is not obvious to the general public. Also, Section 2(1)(ac) along with 64(1)(g) deals with “industrial application”, which means that to receive a patent, the invention should be practically applicable and conform to the industrial use and deriving concrete benefit from the said invention.

Furthermore, Section 3 of the Act deals with those inventions which are not patentable. One of the most disputed provision was Section 3(d), which tried to limit the grant of “secondary” drug patents. This section stipulates that secondary patents will only be granted to inventions if it is proved that it has greater efficacy or makes improvements over to the primary. Therefore, inventions based upon known substances, having prior medicinal activity, shall not be given patents until improved therapeutic efficacy is demonstrated.

A landmark judgement which brought the world’s attention to Section 3(d) was Novartis AG v. Union of India. In the said case, Novartis, a prominent drug maker wanted to introduce an oncology drug named ‘Gleevec’ in India which had been an exceptionally compelling drug recognised around the world. But India did not grant a patent as it was held that the drug was not innovative and was just a marginal improvement on the existing medicine. There was no enhancement of the known efficacy and the Court stated that mere change in the properties of the form would not qualify as “enhancement of efficacy”. Thus, the company was not granted the patent for its drug.

Major Concerns & the Solutions

EVER- GREENING STRATEGY:

Ever- Greening is a strategy undertaken by the companies to recover the costs incurred and to improve their financial status. Under this strategy, the company first makes minor modifications in the existing drug like changing the structure of the medicine, or adding new substances without modifying the drug. Then, multiple patents are obtained for the same drug, thus extending the term of the patents to enjoy a monopoly consistently. This impacts the society at large as the prices of these medicines rise abundantly, making the affordability and accessibility of these lifesaving drugs worse.

Recently, during the spread of coronavirus, a drug named Remdesivir, which has three patents in India, was approved to treat COVID-19 and was authorised by the United States regulators. The demand has been raised to rescind the patents in order to make the medicine affordable and accessible to coronavirus patients, especially to poor people.

COMPULSORY LICENSING:

The Indian government took to various provisions to tackle the Ever- Greening strategy of the companies to obtain patents for medicines. One such method is of Compulsory Licensing which authorizes the third party to make or use the patented invention even before the consent of its owner. This strategy will not only make the medicines more affordable, but will also provide medicines to other countries through export, thus keeping up the TRIPS agreement.

Section 84 of The Patents Act, 1970 states that compulsory licensing can be provided only after three years have lapsed from the time when the patent was granted. Compulsory Licensing can be granted when:

1. The invention patented is not available to the public at an affordable price.

2. The reasonable requirements of the public with regards to the invention have not been satisfied.

3. The patented invention is not used in the territory of India.

In 2020, with the spread of COVID-19, the demand for the medicines named Hydroxychloroquine and Paracetamol increased and India, having these medicines in abundance, decided to export the same. Ashwani Mahajan, co-convenor of the Swadeshi Jagran Manch, stated, “In 1995, the World Trade Organization (WTO) mandated the member countries to change patent laws which gave more advantage to the companies. India has a pro-people patent regime, allowing production of generic drugs along with compulsory licensing with reasonable fees.

Conclusion

The Patents Act of 1970, which denied the grant of product patents, had both positive and negative impacts. Several companies suffered from financial crunch as the costs incurred by them on research and development could not be compensated through selling the drugs at a cheaper rate. On the other hand, due to the existence of generic medicines, the drugs in India became affordable and accessible since they could be produced by any other manufacturer. Further, multinational companies were also forced to reduce their prices which was looked at in both negative and positive manners. After the Product Patent came within the purview of the Act, there was a positive outlook as the Indian companies started dominating the market by adapting rapidly to these changes and the cost of the drugs did not shoot up. Among the twenty largest pharmaceutical countries, sixteen of them were Indian companies and the rest were MNCs.

There was an ever-growing need to maintain a balance between the protection of patents and the affordability of life-saving drugs in India. The Government is taking necessary steps to make the medicines affordable while providing patents to genuine products. Through the New IPR Regime introduced in 2016, the government proposed tax breaks to promote research and development, thereby strengthening the R&D sector. Further, it retained Section 3(d) which disallows adopting “ever-greening” strategy by the companies.

The protection of the pharmaceutical sector requires that both the interests of the companies as well as the society is taken under consideration. While on one hand, protection of intellectual property rights should be ensured, on the other hand safeguarding the interests and promoting the welfare of the society should also be undertaken.


Title image source: Vox


This article has been written by Somya Jain. Somya is a third year-student of Vivekananda Institute of Professional studies, affiliated to Guru Gobind Indraprastha University.