Since the beginning of mankind, humans have been evolving and developing their surroundings to make their existence on the earth more convenient. With each new invention and discovery, we have left no stone unturned to expand the scope of our being. Each of these discoveries or inventions not only require vast knowledge and research but also heavy investments. Thus, to value the efforts and to encourage the trail of inventions, recognition is given to those involved in these innovations. This recognition is termed patent. A patent gives exclusive rights to the company to manufacture or sell the product.
Similarly, there have been many technological and scientific innovations in the health sector. Pharmaceutical companies invest huge sums in their research and development to innovate new drugs. Developing a drug is a lengthy process, after manufacturing, it is sent for clinical trials and regulatory approval procedures for a final decision on its usage. These companies get the drug registered under the patent act which gives them exclusive rights to it.
International Laws on Patent Rights
International laws have encouraged giving patents for development and growth. According to Article 27 clause 2 of the Universal Declaration of Human Right and Article 15(c)(1) of the International Covenant on Economic, Social and Cultural Rights, every person has the right to protection of moral and material interest in any scientific, literary, or artistic production by him. Besides this all the countries associated with World Trade Organization ratified The Agreement on Trade-Related Aspects of Intellectual property Rights is an international agreement in 1994. It was made to standardize the Intellectual patent rights of all the member nations to some extent. According to the provisions of the agreement, patent rights were to be provided only for twenty years and compulsory licensing with minimum restrictions was to be allowed by the countries. Further, in the year 2001, the Doha Declaration conferred the absolute right on the countries to take steps to improve and protect their public health conditions by issuing compulsory licenses and by exporting their generic drugs to countries with poor medical infrastructure.
Patent rights in the Indian Health Sector
Right to live a healthy life is a fundamental right under article 21 of the Indian Constitution and this right is equally entitled to everyone under Article 14. India is a developing country where many people do not have the resources to even afford medical help. It faces huge health crises due to inadequate medical facilities and a lack of necessary drugs. This creates a responsibility for the government to develop a sound medical infrastructure and to ensure that no one is getting deprived of medical aids in the country. Thus, it also becomes important for the government to make accessible the patented drugs at a lower price, which are usually sold expensively in the market. This is one of the drawbacks of granting patent rights, the owner companies attain a limited monopoly in the market and get the power to control price and sell the products at high prices which makes it unaffordable for people from lower strata of the society.
The government has enacted statutes to ensure that granting patents not only contribute to technological advancement but also leads to the dissemination of those innovations so that each section of the society could be benefited from it, thus leading to economic and social welfare.
The topic of patent rights in relation to public health has been a debatable one. Those pharmaceutical companies which hold the patents of life-saving drugs sell them at high prices which many developing and under-developed countries are not able to afford. This is when compulsory licensing comes into the picture. Compulsory licensing is an authorization given to a third party, besides the company holding the patent rights to use or manufacture a particular patented product or process. Compulsory licensing helps it to make the drugs affordable and accessible to everyone by eliminating the barrier of patent rights. Section 84(7) of the Patents Act, 1970 elaborates the procedure to file an application for a compulsory license whereas section 92 rests the power of suo moto to the controller general to issue a compulsory license in cases of emergency situations when there is an urgent need of the drugs. India’s first compulsory license was granted in 2012 in the case of Natco Pharma Ltd. v/s Bayer Corporation. Bayer was a German Pharmaceutical company that invented a life-saving drug that could be to cure cancer patients in advanced stage and was sold in India by the name of Naxavar. Bayer got its drug patented in India and was selling it at a very high price. When the German Company did not grant a voluntary license to Natco Pharma, it applied for a compulsory license to sell a generic version of the drug, thus compulsory license was granted by the controller and the decision was upheld by the High Court of Bombay. Thus, compulsory licensing builds a balance and makes the patented invention available widely.
The government has made mandatory for every patentee or licensee to file a statement for the commercial working of the granted patent in the Indian territory under Form no. 27 listed it Section 146(2) of the Patent Act, 1970. But in 2015 a writ petition was filed in the High Court of Delhi bringing it to the attention of the court that there was huge non-compliance of Form 27 by the companies. According to the survey done by the petitioner, it was found that nearly 35% of the patentees of pharmaceutical drugs, telecommunication, and those involved in public-funded research and development did not comply with the provision. The court in the said case of Shamnad Basheer vs Union of India & Others directed the Central government to make amendments to the form and make it compulsory for the companies to disclose the revenue accrued in manufacturing or importing the patented product and the details regarding the working of the patented invention, non-compliance of which was made punishable. This helps the government to keep a check on the companies thus ensuring that they are not exploiting the consumers by charging them high prices and the patented product or service is made available at a reasonable price and reasonable quantity.
The provision in The Agreement on Trade-Related Aspects Of Intellectual property Rights (TRIPS) for granting patent rights for twenty years created a wide time gap for which a patented invention could not be made available to everyone in a country like India where a large part of its population is below the poverty line. To overcome this hurdle the Hon’ble Supreme Court of India came with an amicable solution to create a balance between the TRIPS agreement and the availability of drugs.
In the landmark judgment of Novartis v Union Of India, where an Indian company started the production of a generic version of a life-saving drug invented by Novartis. Novartis moved to the court against the generic version of the drug being produced. The apex court in the case observed that the pharmaceutical companies introduce their drugs in slightly new forms to renew their patent rights and thus to have a limited monopoly in the market, which the court called the process of evergreening. To avoid evergreening Section 3 (d) was added in the Patents Act, 2005 which states, “the mere discovery of a new form of a substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”
The court held that unless there a significant change in the product with regard to its efficacy the product will be considered the same and thus the owners of the patent cannot sell their drugs in a new form in order to renew their rights. This would also enable the generic companies to produce the drug with some innovations and make it available in the market at a reasonable price. This was one of the most highlighted cases in India as well as Internationally as it created a balance between patent rights and public health.
It is a known fact that pharmaceutical companies abuse the patent system by blocking entries of new competitors in the market to avoid a decrease in the prices of drugs. They file for a patent with a minor variation of the previous drug which is called a secondary patent. According to a study titled Pharmaceutical Patent Grants in India, it was found that Indian Patent Office has granted nearly 72% of secondary patents for even marginal modifications. Section 3(d) added in the Novartis Case has not been efficiently implemented to prevent evergreening. Companies escape under section 3(e) which just requires demonstration of synergistic effect where the drug is made with a mixture of various substances to get a new patent. Feroz Ali, IPR chair professor at the Indian Institute of Technology, Madras, and a practicing advocate pointed out that the Supreme Court listed steps to determine whether an invention would fall within section 3(d) but failed to take into observation the pharmaceutical guidelines prepared by the Indian Patent Office. Thus an efficient way to put the section into practice has not been given. The guidelines should be updated and made more precise. The IPO could also audit the patents independently to make sure that undeserved patents are not being granted and should work more effectively in order to implement the guidelines of the court.
In the times of Pandemic
The Covid-19 pandemic has challenged the government and medical infrastructure of every country. The virus has been spreading at a high rate and public health has become a matter of concern.
In India where many parts of the nation even do not basic medical aid, it is a huge task for the government to ensure that people are getting the required treatment. The Medical infrastructure of the country collapsed with the coming of the second wave of the virus. Hospitals were fully occupied, life-saving drugs were being sold at very high rates, and the ones who suffered the most were the poor and the unprivileged who could not afford the medical expenses. The drugs used for the cure of Covid-19 infection are invented by big pharmaceutical companies which refuse to waive their rights. Remdesivir a drug that was widely used for the treatment of corona virus was being sold in the market at a high price which made it inaccessible to many. The government intervened to ensure public health and increased the production of the drugs thus eventually leading to reduction in the prices of the drug in the market thus making it affordable for everyone.
India is also fighting a battle on a global level as it is asking the developed nations to waive off patent rights on Covid vaccines, drugs, and other equipment. A recent report by Oxfam has revealed that 13% of the world’s population which includes a small group of rich companies has bought half of the future supply from vaccine developers. Thus, India at the World Trade Organization has been asking for a temporary waiver of the TRIPS agreement so that these life-saving drugs could be made available to developing and under-developed countries as well. The pharmacy companies won’t suffer any losses as these drugs have been developed with public money and funding from the funding received from various governments. If the nations and WTO agree to invoke the Trips agreement on patents it would lead to mass production of these drugs in countries like India and thus could be made available to everyone. It would be a huge step towards improving the current situation of Public Health all over the world.
The dispute on patents and public health between pharmaceutical companies and government has been a long one. Though these efforts have been made by lawmakers through these years conflict of interest stays. The government works with the motive of improving public health conditions whereas the pharmaceutical companies desire recognition for their invention. This conflict will only be resolved by finding an amicable solution satisfying both the government and the companies.
(2013) 6 SCC 1