IP disputes
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This article is written by Abhishek Sharma, pursuing Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. The article has been edited by Aatima Bhatia (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Introduction

Most modern nations practice some elements of what is considered a welfare state. However, the term is often used derogatorily to describe a  situation in which the government in question creates unjustified incentives and the unemployed earn more than workers who are in need. Welfare states are sometimes criticized as “nanny states” where adults are spoiled and treated like children. Though in a strict sense, we must ask, how can there be any conflict between the welfare state and intellectual property rights, since the welfare state loves to give rights to its subjects and IPR is also a crucial right in these times. However, the COVID-19 Pandemic and the subsequent problems with the vaccine roll out in India, as well as the rest of the world, have ignited the debate on which one to favour, right to health or IPR. 

Issue of health around the world

Despite recent advances in prevention and treatment in many parts of the world, diseases such as HIV/AIDS, tuberculosis (TB) and malaria continue to plague the poorest and most vulnerable people in the world. The majority of patients with these illnesses live in developing countries, and low wages, high drug prices, and poor access to health care limit access to many life-saving drugs currently available in developed countries. In fact, about one-third of the world’s population does not have access to essential medicines. Currently, 80% of the world’s population lives in developing countries but consumes less than 20% of all medicines.

Provisions in intellectual property

Firstly, the development of medicines requires significant expenditure, exceptionally refined techniques and access to information. Secondly, to secure the underlying speculation, the worldwide drug industry practices Intellectual Property Rights (IPRs) like licenses and passes on this cost (and utilizing enormous benefits) to conclusive buyers. Thirdly, worldwide economic alliances require nations with vaccine producing capacities to give patent assurance under the WTO settlement on exchange related parts of licensed innovation (TRIPS). 

In this unique situation, IP laws are needed to advance development in the R&D of new medication or immunizations. In any case, it is because of these IPRs laws that the worldwide drug industry sets up a restraining infrastructure over life-saving medications. This, therefore, creates billions of dollars in income for investors. However, this likewise obstructs new makers from entering the Pharma research space.

How patent hinders right to health

High prices for branded and patented medicines often make access difficult in developing countries. The patent monopoly protection of the new drug gives the inventor enough time to amortize his controversial estimated R&D costs. However, sponsors often require additional patent payments for innovation through a number of existing “loopholes”. For example, companies often use bilateral trade agreements to price new drugs based on pharma co-economic evidence such as efficacy, safety, and cost-effectiveness compared to equivalent existing therapies. Such tactics make patented drugs affordable for people in poor countries. As a result, international trade agreements have become a very important issue for access to essential medicines and medical services. Moreover, under the Trade Related Aspects of Intellectual Property Rights (“TRIPS”) Agreement, the World Health Organization (WHO) has only non-voting observer status in the WTO’s major political bodies, and the most important WTO documents are international economic, social and international rights to health. 

Exclusive patent protection and minimum 20-year term under TRIPS Agreement

A drug that is patented can only be made, used, imported/exported or sold by the patent holder, subject to certain public interest exceptions. Under the TRIPS agreement, governments are required to recognise patents on products and processes in most areas of technology and to confer rights to the patent holder for a given period of time. This stipulation serves to guard the patent holder from another party making, selling or importing the drug during the time period it is still under patent. Frequently, patent protection ends up in significantly higher prices for patented medicines than within the context of market competition.

TRIPS covering public health

The TRIPS agreement indicates that patent rights have to be balanced against other important interests, like public health. In shaping their laws to evolve to TRIPS standards, countries ‘may take measures necessary to guard public health’. These standards don’t seem to be always appropriate for poor countries which lack health infrastructure and have unfulfilled developmental demands, developing countries can employ certain TRIPS provisions to safeguard public health. Such options relevant to accessing essential medicines include; exclusions to patentability, exceptions to patent rights, parallel importing, compulsory licensing and promotion of generic drugs.

Despite these provisions, there have been concerns about the impact of TRIPS on access to essential medicines, especially in developing countries. These issues were raised at the WTO Ministerial Conference in Doha, Qatar in June 2001. WTO Ministers should implement and interpret the TRIPS Agreement in a way that promotes access to public health and medicine. This agreement is enshrined in the Doha Declaration on TRIPS and Public Health, which reinstates the sovereign rights of countries to take action, especially through compulsory implementation and parallel imports, to protect public health and prioritize intellectual property. Specifically, the Declaration states that the TRIPS Agreement “does not prevent or prevent members from taking steps to protect public health especially to promote access to medicines for all.” 

Of particular interest is the interpretation of Article 31 (f) of the TRIPS Agreement, which states that enforcement should be applied “mainly for supply to the domestic market”. To this end, the government can license local manufacturers while offering low rates to originators. In fact, enforcement essentially lowers consumer prices by creating competition in the market for patented products. The WTO has also agreed to change the TRIPS clause on compulsory licenses, as many developing countries lack the domestic capacity and technical know-how to manufacture patented medicines. A temporary exemption was introduced in August 2003, allowing locally manufactured countries to issue compulsory licenses and export medicines to countries where they cannot be manufactured domestically. TRIPS Agreement leaves members free to determine the appropriate method of implementation within their national legal systems as long as TRIPS’ minimum standards are guaranteed.

Lessons learnt from the COVID-19 Pandemic

Monopolization at the cost of human lives 

Backers of general wellbeing and researchers have contended for a long time that restraining infrastructures kill, by denying admittance to life-saving medications. The licenses are forestalling competition and undermining both the moderateness and the stock of new medications. PCV13, the current multi-strain pneumonia medicine restricted to infants, costs many dollars since it is the property of Pfizer.

In India, more than 100,000 infant deaths from pneumonia are recorded each year, most of which are preventable, while antibody medicine generally gets $5 billion in income for Pfizer yearly. The monopoly over innovation has affected the fight against COVID-19. The quick rollout of additional testing units, the respirator or N95 veils has made it harder for new makers to make clinical-grade facial coverings at scale. Different licensees are in power for three of the most encouraging medicines for COVID-19 — Remdesivir, Favipiravir, and Lopinavir/Ritonavir.

Moving towards a solution

Costa Rica’s administration as of late approached the WHO to build up a willful pool of IP privileges for COVID-19 medicines, which would permit different producers to supply new medications and diagnostics at more reasonable costs. 

Patent pool

Through the Medicines Patent Pool, the United Nations and the WHO have for quite a long time looked to expand admittance to medicines for HIV/AIDS, hepatitis C, and tuberculosis. Patent pools, prize assets, and other comparable ideas are essential for a more extensive plan to change how life-saving medications are created and made accessible. The objective is to supplant a syndication driven framework with one dependent on collaboration and shared information. Accordingly, patent pooling should now be extended to cover vaccines for COVID-19 immunization. 

Vaccine bonds 

Inventive money instruments have been fruitful in bringing capital for immunizations up previously and ought to be utilized to subsidize the development of COVID-19 vaccines. The International Finance Facility for Immunization (IFFIm) raises capital for developing vaccines. These securities are dispatched with unique responsibilities, where the investors provide funds to vaccine makers and, in return, the vaccine makers sign a lawfully restricting obligation to give the vaccines at a value reasonable to low-income and middle-income nations. 

Where does India stand? 

India is among the biggest producers of nonexclusive medications and vaccines on the planet. It is home to about six significant vaccine producers and a large group of more modest ones, manufacturing dosages against Polio, Meningitis, Pneumonia, Rotavirus, BCG, Measles, Mumps and Rubella, among different infections. For instance, the Serum Institute of India is the world’s biggest vaccine creator by the quantity of portions delivered and sold universally. Following its status of being a pharmacy to the world, India has effectively chosen to accelerate vaccination drives; more than six firms are in the fight as of now. The Government of India can convey the TRIPs-agreeable instrument of obligatory authorisation to empower the vaccines to be created by outside makers at reasonable costs. 

Conclusion

The question is whether the right to health and Patent (IPR) can exist together. The issue of admittance to reasonable drugs in non-industrial nations zeroing in on the right to wellbeing as set out in the ICESCR and patent norms as needed by the TRIPS Agreement. In a  severe sense, there is no contention between the right to wellbeing and licenses. ICESCR and TRIPS don’t contain totally unrelated commitments. Notwithstanding, it has been shown that pressure emerges from the use of the two deals. There must be a balancing Act by States to decide what it is that is of prime importance, especially in the time of an ongoing crisis like Corona. At the same time, the question and concern related to individual rights and IPR must also be suitably addressed, for achieving the welfare of all. 

References 

  1. https://iffim.org
  2. https://www.who.int/immunization/programmes_systems/financing/analyses/Brief_16_IFFIm.pdf?ua=1
  3. https://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.htm
  4. https://www.wma.net/what-we-do/human-rights/right-to-health/
  5. https://academic.oup.com/intqhc/article/14/2/87/2886565

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