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Life- Saving Drugs and Vaccine Price Equitability

Life- Saving Drugs and Vaccine Price Equitability: Should Compulsory Licensing be invoked in the times of COVID-19?


Introduction

We all have been hit hard by the pandemic except the pharmaceutical sector which is involved in developing life-saving drugs and vaccines. Meanwhile, a hot debate has spurred in this difficult time regarding grant of compulsory license over these drugs. The Indian Patents Act, 1970 empowers the government to use or allow any third party to use a patent under special circumstances namely public purposes including public health. Though during the entire journey of this special legislation spanning over half a century, the government has never undertaken such act. In fact, a compulsory license has only been granted single time way back in 2015. Now the time has arrived where the government has to take a call to safeguard larger public interest through this unused or sleeping tool.


In this article, I have inquired upon the probability of grant of compulsory license on life-saving drugs and vaccines by shedding light on the provisions of Sections 84 and 92 of the Patents Act, 1970 along with TRIPS mandate. The article also revolves around the judicial scrutiny of the concept in terms of established precedents. At the end, the author has also tried to provide an insight with respect to the consequences of granting compulsory license.

With number of cases increasing day by day at an alarming rate, the country is battling the COVID-19 pandemic with the shortage of life-saving drugs such as Remdesivir, Tocilizumab, Favipiravir, etc. The sector which seems to be immune from this pandemic is the pharmaceutical sector. With the vaccination programs going on in the different parts of the country, the pharmaceutical companies like Serum Institute of India (hereafter referred to as SII) has kept three different variation in prices for the Central Government, State Government and Private Entities. Since there are two vaccines available in the country, they are Covishield and Covaxin which are manufactured by SII and Bharat Biotech respectively therefore, this gives these manufacturing companies chance to create a duopoly and regulate the pricing arbitrarily at their own will.


Now it is the need of the hour that public interest i.e., public welfare of providing vaccine to each and every citizen of the country must prevail over private interest i.e., the intellectual property right holder. The way to make sure that public interest supersedes the private interest is by way of Compulsory Licensing.


Grant of Patents

Section 47 of the Indian Patent Acts (hereinafter referred to as “the Act”) provides for the grant of Patents subject to certain conditions. So, it provides the following options for the Government of India:

  • A patented article or any article made using a patented process can be imported or get made by the Government for its own use (47(1)).

  • A patented process for the purpose merely of its own use can be used by the Government (47(2)).

  • The Government may import a patented drug or medicine for its own use or for distribution into its public healthcare system or in a healthcare system being run on its behalf (47(3)). To invoke this section, the government has to specify this by notification in the Official Gazette.

Section 48 deals with the “Right of the Patentee” which states that the right of the patentee is subject to Section 47 and other provisions of the Act.

Compulsory Licensing: Indian Patents Act, 1970 and TRIPS Agreement

Compulsory Licensing is an authorization by the government for selling or employing a patented product or patented process respectively without the consent of the patentee. Chapter XVI and Article 31 of the Act, 1970 and TRIPS Agreement deals with compulsory licensing respectively although TRIPS Agreement mentions, “other use without the authorization of Right Holder”. The conditions which need to be fulfilled for the grant of compulsory license is mentioned in Sections 84 and 92 of the Act.

Section 84 of the Act states that any person after the expiry of three years from the date of the grant of patents can make an application to the Controller for the grant of Compulsory license on the ground mentioned below:

  1. The reasonable requirements of the public have not been satisfied with respect to patented invention,

  2. The patented invention is unavailable at affordable price to the public,

  3. There is no work of patented invention in the territory of India

Notification by the Government for Compulsory Licensing

Section 92 of the Act mentions about the special provision for compulsory licenses on notification by the Central Government. If there exists situation of national emergency or extreme emergency or in case of public non- commercial use, if the Central Government is satisfied that it is necessary to invoke compulsory licensing, it can make a declaration to that effect by notification in official gazette. Sections 83 and 87-90 shall be applicable along with Section 92 in this case. Clause (3) of Section 92 makes it clear that if the Controller is satisfied of the above situations in case of public health crisis relating to any epidemic, he shall not apply the procedure mentioned in Section 87 in relation to the grant of license under this section.

Power of Central Government to use invention for the purpose of Government

Section 100 of the Act mentions about the power of Central Government to use the invention for the purpose of the government. Section 100(1) states that “Notwithstanding anything contained in this Act, at any time after an application for a patent has been filed at the patent office or a patent has been granted, the Central Government and any person authorised in writing by it, may use the invention for the purposes of Government in accordance with the provisions of this Chapter”.

Central Government can make use of the above two provisions of the compulsory licensing for the exploitation of the life saving drugs as well as the vaccines so that they become easily available.


Judicial Discretion

Bayer Corporation v Union of India

This was the first case in which compulsory license was granted by the Indian Patent Office to Nacto Pharma for the production of generic version of Bayer’s Nexavar. It is an anti-cancer agent used to treat the cancer of kidney and liver. It was established in this case that only 2% of Cancer affected population had access to this drug which was sold at a price of Rs. 280000 for a month’s treatment by Bayer Corporation. Further, on the ground that the Nexavar was imported to India the Indian Patents office granted compulsory license to Nacto Pharma, which made sure that tablets are sold at Rs. 8800 per month along with 6% of the net selling price as royalty will be paid.


Rakesh Malhotra v Government of National Capital Territory of India and Ors

The Hon’ble court noted in this case that there is shortage of drugs not all but some like Tocilizumab, Favipiravir, Ivermectin, Dexamathasone, Methylprednisolone, Dalteparin, Enoxaparin, HCQ and Baricitinib not all but some which are used for treating COVID-19 patients. The court directed the Central government that if the manufacturers are not able to ramp up the production, the government should not hesitate in invoking the powers conferred by the Patents Act since thousands of lives are being lost each day.


Consequences of Compulsory Licensing

  1. It will make the pharmaceutical companies dependent on generic medicine which will save their cost rather than depending on Research and development which is a costly affair.

  2. It will create a perfect competition as it will increase the number of companies producing generic medicine. So, the supply will increase and the cost will automatically come down. It will also stop black marketing as the drug will be easily available.

  3. It will benefit the health sector as the patients will get vaccines and life-saving drugs at a very cheap rate which can save lives.

Conclusion

The situation has now become patient versus patent. So, it is high time for the government to invoke compulsory licensing for the lifesaving drugs and vaccines in order to bring cure in this pandemic. The WHO has declared COVID-19 as public health emergency of international concern. In such situation the government can invoke powers conferred by the patents act since it is a situation of extreme urgency and it is also a public health emergency. This step can save thousands of lives who die each day due to non-availability of such drugs or they cannot afford the price either due to poverty or black-marketing. As far as the vaccines are concerned, people who are above the age of 18 years, their vaccination started on 1st May, 2021. But the dilemma is whether these vaccines will be provided free of cost? If not, then those who are not from the affluent class will get deprived from vaccination. The only solution to this is “COMPULSORY LICENSEING”. But one thing to be kept in mind by the Government is that the innovators must be provided with certain incentives so that research and development takes place at the same pace.



References

Statute

The Patents Act, 1970

Articles

  1. COVID-19 Public Health Emergency of International Concern (PHEIC) Global research and innovation forum (WHO, 12 February 2020) <https://www.who.int/publications/m/item/covid-19-public-health-emergency-of-international-concern-(pheic)-global-research-and-innovation-forum> accessed 4 May 2021.

  2. Nayanikaa Shukla, ‘Compulsory Licensing in India’ (Mondaq, 18 January 2019) <https://www.mondaq.com/india/patent/772644/compulsory-licensing-in-india> accessed 4 May 2021.

  3. Vikram Chaudhuri, ‘What is the concept of ‘Compulsory License’ under the Patents Act, 1970’ (Ipleaders, September 26 2016) <https://blog.ipleaders.in/concept-compulsory-license-patents-act-1970/> accessed 6 May 2021.

  4. Ajay Bhargava and others, ‘COMPULSORY LICENSING AMIDST THE COVID-19 PANDEMIC’ (Lexology, 16 July 2020) <https://www.lexology.com/library/detail.aspx?g=253ff273-55fb-46cf-9331-04d632ac055e> accessed 6 May 2021.

  5. PHD Rangappa, ‘Dealing with compulsory licensing in India’ (iam-media, 19 December 2019) <https://www.iam-media.com/dealing-compulsory-licensing-india> accessed 5 May 2021.

  6. Adyasha Samal, ‘SC Issues Interim Order in Suo Motu COVID-19 Case: Raises Questions on Vaccine Procurement Process, Compulsory Licensing and More’ (SpicyIP, 4 May 2021) <https://spicyip.com/2021/05/sc-issues-interim-order-in-suo-motu-covid-19-case-raises-questions-around-vaccine-procurement-process-compulsory-licensing-and-more.html> accessed 7 May 2021.

  7. Swaraj Paul Barooah, ‘Compulsory License for Covid Drugs on the Table, Says Delhi High Court’ (SpicyIP, April 21 2021) <https://spicyip.com/2021/04/compulsory-license-for-covid-drugs-on-the-table-says-delhi-high-court.html> accessed 7 May 2021.

Book

V K Ahuja, Intellectual Property Rights in India (2nd edn, LexisNexis 2018)


Name- Shivam Mishra

Year- 3rd Year (6th Semester)

Institute- School of Law and Governance, Central University of South Bihar, Gaya, Bihar




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