Patent healthcare
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This article is written by Jaya Vats, from Vivekananda Institute of Professional Studies, Delhi. In this article, the author discusses the relation of patent law concerning the right to healthcare and the pharmaceutical industry in India.

Introduction

The Indian pharmaceutical industry is a growing high-tech industry and has seen steady growth over the past three decades. There are several private Indian companies in the industry currently involved, which have taken a substantial share of the domestic pharmaceutical market because of factors such as favourable public policies and a low level of international competition. However, as Indian companies emerge from domestic markets and prepare for foreign competition, the liberalization of the Indian economy is revolutionizing. India is a major example of the Indian pharmaceutical industry which, as India opens its markets for global business, is forced to re-examine its long-term strategies and business models. As the need to ensure the security of valuable assets in research and development has increased, considerations such as intellectual property are becoming increasingly relevant. India is making efforts to curb problems of poor implementability of existing laws on intellectual property and the Indian government is working to create a patent regime that encourages technological development and complies with its global commitments.

Pharmaceutical patenting in India is of particular significance in the current public-health concerns as India and it’s pharmaceutical companies, in the form of generic drugs, are significant suppliers of low-priced drug products. The issue of access to medicines has taken on global dimensions since the millennium, as India is part of the Doha Declaration on the TRIPs and Public Health Agreement, 2001. In India, however, growth was very slow because of the low expenditure on public health and very fewer institutes of public health. The weak, depressed, and the inexperienced are India’s worst suffer fulfillers, and constitute a large part of society. It has now become one of the big challenges to protect the health of our country’s millions and millions of vulnerable people. The role of Indian patent law in respect of the TRIPS Treaty and the effect on the health of ordinary people of these two legal instruments are very important here.

Patent regime

To protect the inventions, patents are issued. A patent is an exclusive right given to the inventor for the invention by the government. An inventor or anyone else appointed by the inventor may apply for a patent. It is the right to exclude others from unauthorized manufacture, use, offer for sale, sale, or import. The patent is a negative right that does not have a right to make, use or sell the invention, but rather a right that empowers the patentee (patent proprietor) without his/her consent to prevent or stop the use of the patent’s invention by third parties. The patent includes the right to authorize others for the invention to be produced, used, or sold. A patent is an agreement between the applicant/inventor and the government in which the government grants the right of the invention to be protected for a limited period after the applicant/inventor has made full disclosure. Patenting, therefore, provides a strategic approach to protecting inventions without confidentiality.

A patent provides a technical solution to the technical problem. Only inventions that meet certain conditions known as the patentability criteria are granted a patent. Patents shall have a maximum period of 20 years from the date of the issuance of the patent. Patents are sovereign rights, but only in the nation in which they are issued are enforceable. Consequently, only in that country will any legal action against the infringement or breach of patent rights be demanded. Patent rights must be applied in each country to gain patent protection in various countries. The Patent Cooperation Treaty (PCT) offers a mechanism by which an international patent application may be submitted by a single patent applicant in several countries. Nevertheless, the grant of a patent shall remain at the discretion of each patent office after filing the PCT application.

  • Development of patent law in India

The Patents Act, 1970, is the main legislation in India for the patenting method. In the beginning, no product patent but process patents for inventions relating to food, medicines, and chemical products may be issued in compliance with this rule. Product patenting has, however, been permitted in India since 2005. Indeed, the Trade-related Aspects of Intellectual Property Rights (TRIPs), which was signed in 1995, was a nation of the World Trade Organization ( WTO). The minimum requirements of IP laws were recommended by TRIPS for each of its member states to be followed. The contractual duty of India to change its patents law to comply with the terms of the agreement was to make it a signatory to the TRIPS Treaty. The first alteration of this sequence was to grant pipeline protection in the form of the Patents (Amendment) Act of 1999 before the country started to grant product patents. It stipulated the conditions on the registration, as mailbox applications from 1 January 1995, of product patent applications in the field of drugs and agrochemicals, and granted them exclusive marketing rights (EMRs). 

The TRIPS Act of 1970 has been revised further by the Patents (Amendment ) Act, 2002 to comply with the second collection of TRIPS obligations. The 20-year standardized patent term for all types of inventions had been defined through this alteration clause. This amendment was also made under the agreement of TRIPS and provisions for removing the presumption of proof in the event of an infringement of a formal patent were added to the Act as well as other modifications to the main act, including the term “invention.” The third collection of changes to patent law was adopted as the Patents (Amendment) Act, 2005. The product patent system in India was implemented through this amendment. Under certain conditions, the mere discovery of new forms and property, or new use of the known substance, provisions concerning pre-grant and post-grant objections have been altered and provision has been made for the grant of an export license, in certain conditions, on a mandatory license for patented pharmaceuticals. 

  • Criteria of patenting

For inventions that meet certain requirements referred to as patentability criteria, patents shall be issued. The Indian Patent Act describes a patentable invention as “a new product or method that requires an innovative phase and can industrialize.” The following are also the fundamental conditions that must be patentable for any invention.

(a) Newness: The subject-matter of the invention must not be identified until the date of patent filing. If it is not written, or not used in a single country or anywhere in the world, innovation is considered to be novel.

(b) Inventive step: It means a function of innovation which, compared to existing knowledge or which has economic significance or both, requires technological advancement and which does not make the innovation apparent for a person skilled in the art.

(c) Industrial applicability: This criterion implies that the production of a new invention or technology can be possible. For instance, a modern and innovative method to remove tumour cells from the body of the patient can not be patented industrially.

  • Kinds of pharmaceutical patenting in India

The pharmaceutical industry is among the ‘intellect-driven’ industries. Pharmaceutical testing is highly expensive and potentially unpredictable. The results of the research may take the form of a new creative product or method which is useful. For pharmaceutical firms, in this intensely competitive environment, it is important to defend their inventions from unauthorized commercial use by securing the right to a patent on the patented product or process. The following categories can apply to pharmaceutical patents in India. 

  • Drug compound patents 

These patents are held by the chemical structure of the drug compound per se. These patent claims are generally referred to as claims of the Markush kind. Markush claims are statements of several “functionally identical” chemical entities included in one or more parts of the drug compound. Drug compound patents offer the broadest possible protection for the product of the business, as other firms are not permitted to prepare the drug by any means of synthesis or to produce/sell any formulation comprising the drug before the expiry of the said patent The Indian Patent No. 202989, for example, explains a new pharmaceutical compound is a chemical structure useful for parasite control.

  • Formulation/ composition Patents 

These patents demand advanced technology for the preparation of the formulation and/or quantity of its main ingredients. For eg, Indian patent No. 203986 stated the ayurvedic anti-retroviral composition for the treatment of Acquired ImmunoDeficiency Syndrome.

  • Synergistic combination Patents 

Drug synergy happens when two or more drugs interact in such a way that one or more effects of these drugs are enhanced or magnified. New synergistic drug formulations can be accomplished with patents. For example, the Indian patent No. 206328 demanded a synergistic combination of roflumilast and salmeterol.

  • Technology Patents

These patents are based on technology-related techniques such as stabilization, taste masking, improved solvency, and so on. For instance, the Indian patent no. 227933 asserted masked formulation in compliance with taste. A pharmaceutical formulation with a masked taste, the masking of which continues throughout the administration of the formulation, in particular in the form of a suspension in an aqueous vessel, distinguished by the fact that it contains at least the following elements: 

a) A cellulose polymer which is soluble in organic solvents but virtually insoluble in water, regardless of pH; a methacrylic polymer which is soluble in organic solvents; 

(b) An organic alkaline solution or an alkaline salt that is pharmaceutically acceptable; 

(c) An adsorbent solution.

  • Polymorph Patents

Polymorphs are various physical shapes or crystal structures of a substance that is already known. Polymorphs are typically prepared to eliminate impurities or to improve the stability of the compounds. Indian patent No. 237261, for example, claims the crystalline type B4 of atorvastatin magnesium is distinguished by an X-ray diffraction pattern. The said crystalline form displays purity greater than 98%. The granting of polymorphic patents in India is primarily regulated by Section 3(d) of the Patents Act, 1970. The Patent (Amendment) Act 2005 amended this section. Section 3(d) guarantees that only if the new type is truly deserving of patentability, and that patents for frivolous inventions are not issued. It sheds light on the policy of the Indian government to reward inventors/researchers for their intellectual achievements while also protecting the general public interest and making essential products, such as medicines, available at affordable prices.

  • Biotechnology Patents 

In the preparation of pharmaceutical products, biotechnology includes the use of living organisms and biological materials. Several diagnostic, therapeutic, and immunological products occupy patents for biotechnology. Indian patent number 234072, for example, claims interferon, non-ionic detergent, pH 4.5-5.5 pH modification buffer, benzyl alcohol, and optionally, an isotonizing agent, which contains a liquid-containing, human-serum interferon-free solution. Incidentally, the Indian patent, after the adoption of the product patent regime in 2005, became the first product patent granted by the Indian patent office.

  • Process Patents

A process patent does not claim the product itself but only covers a new and inventive process, for instance, the Indian patent No. 206678, for the production of a particular product.

  • Transfer of the patent right

The patent being a form of property, it may be assigned or granted a license from the patentee to any other person. The Indian Patent Act requires that the grant or license of a patent shall be written and that all of the terms and conditions governing the rights and duties of the parties shall be clearly defined. 

(a) Assignment of patents 

The transfer of ownership of one’s property, means the interest and the rights to the property, to another is, in general, the transfer. The transfer to another person by the patent proprietor of all or part of its right, title, and interest in the patent or patent application shall be defined as the transfer by this patent proprietor. The person to whom the patent rights are assigned is referred to as the assignor, and the person assigned is also referred to as the assignor.

(b) Licenses for patents

By way of license, a patentee may permit the invention, use or exercise by others which would otherwise not be permitted. Patent licensing transfers a group of rights limited in time, geography, or field of application. A patent license may be a voluntary or compulsory license. 

  • Voluntary license: The patent proprietor shall be referred to as a voluntary license if he or she empowers a person by written consent to make, use, or exercise the patented invention. There is no role in such a license for the Indian patent office or the Central Government.
  • Compulsory license u/s 84: A mandatory license is a statutory license that, under certain conditions, can be granted to a third party by the patent controller. The patent system compulsory license is an unintended contract imposed and enforced by the government between a willing purchaser and an unwilled seller. The government allows anyone else without the consent of the patent proprietor to produce a patented product or process under a compulsory license. A compulsory license may be granted on the following grounds referred to in Section 84 of the Patents Act, 1970 viz. 

(i) There have not been satisfactory public requirements for the patented invention; 

(ii) There has been no public availability of patented invention at an affordable price; or 

(iii) There has been no patented invention working within the territory of India.

However, only after three years from the date of the grant of the patent can a compulsory license be granted. In the case of Natco Pharma Ltd., India vs Bayer Corporation, USA, Mr. P. H. Kurian, then Patent Controller, issued an order granting the first compulsory patent license in India. The compulsory license was granted to Natco Pharma Ltd. under patent number 215758 granted to M/S. Bayer Corporation. This patent applies to the drug Sorafenib tosylate sold by Bayer under the brand name Nexavar. Nexavar is indicated for Renal Cell Carcinoma-RCC (cancer of the kidney) and Hepatocellular Carcinoma-HCC (cancer of the liver). Natco is now free to produce and sell a generic Nexavar version in RCC and HCC, once this compulsory license is obtained. At the end of each quarter, Natco will be required to pay Bayer a royalty of 6 percent on net sales. Moreover, for a monthly dose of 120 medicine tablets, it can not charge more than Rs 8800. As a condition of the compulsory license agreement, Natco also undertook to donate free supplies of medicines each year to 600 needy patients.

Above the decision was based on a grounding under Section 84 of the Patents Act 1970 for granting a compulsory license. Only 2 percent of total patients with hepatitis and kidney cancer were able to access the Bayer drug. Controllers found that the reasonable requirements for the patented invention had not been satisfied by the public. The Controller found that the invention was not available to the public at a reasonably affordable price, because for one-month drug treatment, Bayer charged approximately Rs 2.8 lakhs. The controller also found that the patented invention did not work in India because Bayer did not produce the product in India but rather imported it out of India. 

  • Patented pharmaceutical products export compulsory license u/s 92A: Section 92A of the Patents Law, 1970 states that it is an obligation for manufacture and export if the country has granted or allowed the importation of a patented pharmaceutical, of patented pharmaceutical goods, may be given to any country with insufficient or no pharmaceutical capacity for the concerned product to address public health issues. On receipt of a request, the controller may only grant a compulsory license, following the terms and conditions specified, for the manufacture and export of the pharmaceutical product concerned to that country. This provision deals with the public health concerns of those countries with insufficient or no pharmaceutical manufacturing capacity to implement the TRIPS Council’s decision on Paragraph 6 of the Doha Declaration on TRIPS and public health. By this rule, the compulsory license shall only be available for: 

(a) The manufacturing and export of the patented pharmaceutical product, 

(b) To any country having insufficient or no pharmaceuticals producing capacity, and 

(c) The product which addresses public health concerns therein.

India’s patent law is an exemplary piece of law that aims to balance the common man’s and the inventors’ interests. A wide range of pharmaceutical products can be patented in India after the establishment of the product patent regime. Under certain conditions, a compulsory license offers the possibility of marketing the patented products.

Patent and human rights

Health means “freedom from pain and sickness, a most perfect state of animal life and the uniqueness and concordance in the parts of the living organism” according to the Black’s law dictionary. Health is defined as an ideal condition and an important political and social well-being and is not just the absence of diseases or illness but also the state of physical, mental, and social well-being. Henry Sigerist has correctly pointed out that health is one of the products of life to which man has a right; in every case, wherever this concept takes place, the logic of it is that all measures for protecting and restoring health are made free of charge. Health care has been defined, through services provided by the medical, nursing, and all health care professionals, as the prevention, therapy, and management of diseases, including ‘preventive, curative and palliative intervention’ in all healthcare products and services aimed at health promotion. 

Healthcare is therefore covered by the World Health Organization report (2000). Human rights are claims made by individuals against the state based on their humanity. At the root of this situation, we see that human rights are the rights people deserve, regardless of their legal regime. Access to medical care focuses on providing medical care as part of individual human rights, on different international conventions such as the Universal Declaration of Human Rights, 1948, the International Covenant on Civil and Political Rights,1966, International Covenant on Economic, Social and Cultural Rights, 1966, the Convention on Eventual Discrimination Against Human Rights. This led some of the authors to conclude that they provided for the basis for patent rights and other types of IPRs, Article 27(2) of the Universal Declaration of Rights of Human Rights (UDHR) and Article 15(1)(c) of the International Covenant on Economic Social Cultural Rights. 

Human rights are an integral part of human personality’s inclusive growth. The role of health has taken up a lot of discussions in the post-2015 debate on how to address health issues more efficiently. The UN Task Team on the UN post-2015 development agenda has launched a new agenda to challenge how to transform health as an inclusive right globally into an overall health objective that appeals to the public and is measurable. Then it is mandatory, along with State parties, for states to refrain from overt violations of the right to health, thus preserving this human right. The above-mentioned conventions place obligations on States to uphold, safeguard, and fulfil the right and also to access to health.

It is therefore not merely a matter of improving the overall health of socially and economically disadvantaged groups in society but also of improving the health and economic well-being and must strive to ensure an equal distribution of the financial burden of poor health and morbidity. Achieving the right to health acknowledges that “health is the world’s most significant social objective that needs, in addition to the health sector, the intervention of many other social and economic fields.” The States, therefore, have a responsibility to have both material services and the social and economic conditions to ensure that the right to health can be violated as a civil right. The ongoing advancement of modern scientific and technical innovations allows people to fulfill their health needs, so we can argue that the development of new technology is an important part of their national and international right to health. 

Right to health

Not only in India but also in several other foreign nations, the right to health has been accepted as a constitutional right. Even the TRIPS Convention acknowledges that the member States may exempt those innovations which need to be used to safeguard public order and morality including human, animal, or plant life or health from the granting of patents and thus avoid serious harm to the environment, there is a general acceptance of the right to health care and access to health care at reasonable rates. In a country like India, which has a variety of socio-economic settings, national health systems must be developed with sufficient flexibility to enable the public health authorities to establish their systems following their needs.

  • Recognition of the right to health under the Indian Constitution

The right to health has not been recognized directly by the Constitution of India, but the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being, irrespective of race, religion or political belief, economic or social status. The right to health is an important component of the Indian Constitution’s right to life. The Indian Constitution of Article 14 and 21 indirectly influence the healthcare system, thus requiring the state to take steps to improve healthcare conditions for the Indian people. The Constitution stipulates certain principles of the directive or the State which have indirect effects on access to healthcare, including Articles 39, 41, 42, 43, and 51A, in addition to fundamental rights, shall be observed.

Furthermore, Article 51 of the Indian Constitution sets out India’s commitment to upholding the obligations under the Treaty which affects the health situation directly. The Government of India has introduced many initiatives for the poor in both the urban and the countryside to achieve these goals, including the National Rural Health Mission, the National Urban Health Project (NUM) to introduce institutional deliveries and ensure that qualified supplies are available to support pregnancies and newborns. Polio Drop Scheme, Mission Indradhanush focuses on immunization driving through the catch-up campaign, intending to cover all children who have been left out or missing for immunization.

Developed countries along with developing countries have their health problems. Health awareness among people is high and the demand for quality healthcare is also high in some respects. Health costs are high. Therefore, the government has not managed to provide universal access. The developing countries, on the contrary, have less access to health as far as health determinants and access factors are concerned. In these countries, the majority of people are either below the level of poverty or are either uneducated or unaware of the health and cleanliness benefits and disadvantages. There are various challenges facing access to health care in India and for this reason, constitutional measures and plenty of judicial decisions are available to support access to health care. Although many decisions on several aspects of access have been taken by the judiciary, legislative implementation is not enough. A lot needs to be done in the administrative sphere and a great deal needs to be investigated in this respect in the constitutional framework along with the statutory, administrative, and judicial roles.

  • Judicial approach to the right to health

In the landmark case of Bandhua Mukti Morcha v. Union of India, Justice Bhagwati held that by the judicial process, the States may not be required to provide for these essential elements of human dignity by legislative statute or executive order but when laws are enacted by the State providing these fundamental conditions for the employees and investing their right to live in a basic human dignity, the State may do so. Furthermore, in the light of Article 256 which states that executives can not remain inert unless the government offers the appropriate means of providing access to health, the state’s inaction will mean refusing the sum for living with human dignity enshrined in Article 21.

The Supreme Court in the case of  Consumer Education and Research Centre v. Union of India held that, under Article 21, employees have a basic right to insurance and medical treatment for insurance and vigour while working or after pension. In the immediate case, the court also held that health insurance is a constitutional right when in service or after retirement, and thus private employers are required to provide health coverage for the employee. Also in the case of Peoples Union for Democratic Rights v. Union of India, the Supreme court ruled that it is a fundamental duty of the State to ensure that any person’s basic right is not violated. Therefore, the Government is required to comply with the Basic Principles of State Policy on various social welfare initiatives. 

Patent laws in India and public health

The Patent (Amendment) Act 2005 effectively resolved problems of public health and public interest in India. There are several clauses in the Act that safeguard our country’s public health. The terms of the Act are, however, as follows:

  • Under Section 3(d): Section 3 of the Act covers what is not patentable. Section 3(d) provides that a new kind of a known substance is mere to be discovered which, unless a known process is produced or at least one new reactant employs, does not improve its known effectiveness, merely find any new property or use in a known substance or simply use a known process, machine or apparatus. This section nevertheless plays an essential role in protecting the human health of our country’s millions. This provision is an important protection for public health under the 1970 Patents Act. The problem and the argument of evergreening contradict this part. This clause never accepts greening, which requires generic drugs to be launched, thereby reducing the price of life-saving medicines. It will certainly protect the health of millions and millions of people living under the poverty line in India who have no financial power to buy medicine.
  • Under Section 47: This section, among other things, says that in the event of a patent for any medicine or drug, medicine or drug may be imported into the state for the sole purpose of own use or distribution by or on behalf of the government, or to any other pharmacy, hospital or medical institution established by the Central Government. This provision is also very beneficial in the government’s interest to protect public health. This field of the government could be of significant relief to the government in a developing country like India, where the security of public health has been one of the most critical challenges.
  • Under Section 66: In this section, the Central Government may, after having given the patent a chance to be heard, make a declaration in the Official Gazette to that effect, and the patent is thereupon considered revoked, provided the central government believes that the patent or the way it operates is not good for the state or generally harmful for the population. This section, therefore, provided the Central Government with the ability to revoke any patent referred to in this section if the patent or patent methods were harmful to the public. To preserve public health, the public interest can also be expanded.
  • Under Section 84: In this section, inter alia, any interested person shall be able to apply to the Controller for the grant of a compulsory license on a patent at any time after three years from the date of grant for the patent for any reason, namely:

(a) That the reasonable requirements of the public about the patented invention have not been satisfied or have not been met.

(b) That the patented invention is not available to the public at a reasonably affordable price or that the patented invention is not available to the public at a reasonable price.

(c) In the territory of India, the patented invention is not performed.

An application under this section may be made by any person, although he is already the holder of a patent license and no person shall deny the allegation that the reasonable requirements of the public concerning the patented invention are not satisfied or that the patented invention is not in operation in the territory of India or that the patented invention is not in use. This section nevertheless helps sustain the continuous flow of pharmaceutical goods and prevents fraudulent entrepreneurs from generating artificial crises and growing costs for essential medicines.

  • Under Section 85: In this section, for example, where a compulsory patent has been issued, the central government and any interested individual may apply to the Controller for an order of revocation of a patent because the patented invention was not worked in In territory, after two years from the date of an order granting a first compulsory patent. The Controller may order the revocation of the patent if satisfied with those reasons. Thus, the measure may also serve as a check and balance to protect the common people’s public health in the country, and the government’s weapons for the protection of public health are in this section.
  • Under Section 92: This section provides that where the Central Government is satisfied that it is appropriate that compulsory licenses be issued at any time after sealing the invention to function in respect of any patent in force, either in cases of extreme urgency or in cases of public, not commercial usage, it may make a declaration in this regard, through a notification in the official gazette. Again, where the Controller is satisfied, on consideration of the application referred to in clause (i) of subsection (1), that there is a need for —

(i) the circumstances of a national emergency; or

(ii) an extremely urgent situation;

(iii) the application for licenses under this section shall apply in respect of publicly available non-commercial use, which may arise or may be required, including public health crises, in correlation with the acquired immune deficiency syndrome, human immunodeficiency viruses, tuberculosis, malaria, or other epidemics. In the event of a national emergency, extreme emergency, and public non-commercial use, a compulsory license may be issued. One reason it may also be issued is the public health crisis.

  • Under Section 92A: This section provides a compulsory license for the manufacture and export to any country that has insufficient or no pharmaceutical sector manufacturing capacity to tackle public health concerns of the product concerned, provided that the country or country granted a compulsory license is notifiable or otherwise permitted to make imports. Upon receipt of an application as directed the Controller shall, solely based on any conditions specified and published by the Controller, grant a compulsory license for the manufacture and export of the pharmaceutical product concerned into that country. To protect public health in our country, this section plays an important role and in the appropriate cases, the Controller shall grant compulsory licenses as set out in this section in support of public health.
  • Under Section 102: This section requires the Central Government to publish a notification in the Official Gazette to this effect and, by that notice, to the invention or patent and thus all rights relating to the Invention or Patent, if it is satisfied that an invention which has the object of a patent application or patent must also be obtained by the applicant or the patent proprietor for a public purpose. The terms used for a public purpose under this section that a central government is entitled to receive a patent from the claimant or patent proprietor and in that case, the central government may transfer all the rights of the proprietor. The word “public intent,” which includes “public health,” is very vague here. Accordingly, under this provision, the government may also take steps to protect public health.
  • Under Section 107 A: This section has allowed the importation of patented goods by any person properly approved under the law to manufacture, sell or distribute the product which shall not be regarded as an infringement of patent rights. To protect public health, this section may help to import proprietary drugs at fair prices if necessary.

Economic dependency on pharma industry in India

With nearly 60000 generic brands of 60 therapeutic categories on the market, the Indian pharmaceutical industry has a strong generic basis, fostered by the legal patent structure at that time. One of the success stories of the Indian economy is the evolution of the internal pharmaceutical industry. The Indian pharmaceutical industry, a high-quality pharmaceutical products producer with a low-cost worldwide rating in the 1950s, now has a turnover of over $1.5 billion annually. Only as no product patent system for drugs and pharmaceutical products existed can this be possible. Many countries feared that patent protection in the pharmaceutical sector would limit knowledge spread and hamper public-interest scientific innovations. Most developing countries were concerned that the same product could not be produced during the protective period once a product has been patented. If the process is protected by itself (process patents), an alternative process that is mainly “invented” might be used in the production of a similar product, as a product can be manufactured by more than one method in pharmaceuticals. Accordingly, foreign drug manufacturers’, the domestic Indian market share decreased in 2005 to below 20%

With the abandonment of the Indian market by multinational corporations, local companies rushed to fill the void and by 1990, India was self-sufficient in formulating and almost autonomous in producing bulk drugs. Since no effective patent protection existed between 1970 and 2005, numerous Indian drug producers reproduced and produced the original expensive preparations by foreign firms through alternative production procedures, which have proved to be more cost-effective than the expensive development of original preparations, as no research funds, containing financial risks, were needed. Generics producers are competitive on a cost-effective basis. Simultaneously, India’s pharmaceutical companies acquired expertise in generic medicines production. This is why the term “pharmacy of the poor” is often used in India. The confidence and expertise in reverse engineering were counterproductive in the way that it believed that the development of new medicines for domestic and global markets seemed beyond their reach, but new partners have begun to emerge within and outside the country between academic and commercial organizations.

From the date of filing or to five years after the date of the patent sealing, the Indian patent term was restricted from 14 to seven years, whichever is shorter. Three years after the date of the sealing of the pharmaceutical patent, the patents of the pharmaceutical process will automatically be deemed to be approved. Innovation has developed in the pharmaceutical industry so that it is based on the high cost of pharmaceutical products. The characteristic of the ongoing discussions about the patents of pharmaceuticals is the difference between the strength of the claims made by both parties and the empirical weakness of the bases of the claims. 

In the last three decades, the Indian pharmaceutical industry has demonstrated steady growth and has been a leading international player in generics. Today India is one of the world’s major medicinal production countries, with about 20-22 percent of its world’s share in generic production as the fourth-largest producer by volume and 13th by value.

Future of Indian pharmaceutical industry

The lack of patenting of pharmaceuticals and agrochemicals led to many multinational companies restricting their holdings to expired patents and/or to several patented products. This has contributed to a loss of its market share, as local producers have implemented reverse engineering, which is the most advanced medicine. Foreign firms have to pay international royalties for medicines while Indian companies have access to and reformulate the latest molecules for domestic sales from all over the globe. Thus, patents for pharmaceutical products in India have been gradually weakened and many foreign Pharmaceutical research companies have been exoduses. The obligations placed on India under the TRIPS Agreement would have a direct effect on the competitive pharmaceutical industry in India.

Indian firms would need to compete with multinationals through the manufacture of medicines and the production of proprietary licensed products. Indian firms may also focus on manufacturing approved proprietary drugs by foreign companies or generating revenues from generic drug development. The exponential rise in research and development expenditures will be the secret to survival for Indian pharmaceutical companies. To promote research into low-cost medicines that fit the patent profile of the Indian disease, Indian companies need product patenting. Moreover, the advent of product patents is bound to raise multinationals that have previously been unwilling to invest in India without product patent protection and to improve competition in the domestic market.

  • Compulsory licensing

Compulsory licenses, as set out in the TRIPs Agreement, are intended to strike a balance between the public interest and the legitimate interests of patent owners. The TRIPS Convention also provides for certain requirements on the usage of compulsory licenses and numerous reasons on compulsory licenses may be issued on a case-by-case basis: immediate and serious urgency; non-competitive practices; public non-commercial use and secure patents. Compulsory licensing means that, without the consent of the patent owner, the government allows someone else to produce a patented product or process. This is one of the main pillars of the system of patents. Patented invention compulsory licenses are included in the Paris Convention and TRIPS Agreement. The Indian patent law states unless exceptions such as a national emergency or emergencies can be employed for a license being issued on the earlier date, that the application for a compulsory license can only be made after three years from the date of the award of the patent. Three wide requirements have therefore been laid down for granting compulsory licenses;

(i) The reasonable requirements of the public about the patented invention have not been satisfied;

(ii) The patented technology is not commercially accessible on a reasonably cost-effective;

(iii) In the jurisdiction of India, the patented technology is not working.

The Patent Act lays out the conditions in which “reasonable standards of the public” may not have been met. Such conditions would occur if the holder of the patent declined to issue a license on fair terms, which, in turn, would affect:

  • The development of new trade or industry in the country;
  • The establishment or growth of commercial activities within India;
  • In the pharmaceutical industry, where India may well establish itself as a major generic supplier to developing countries with inadequate domestic production plants, the main implications of this provision are to be felt.

It aims to ensure that patented inventions are made on a commercial basis in India and that the interest of everyone who works or produces an invention is not compromised. The invention is not subject to a compulsory license. The existence of a powerful and efficient patent system will bring many benefits, such as information sharing and investment in new product and process creation that will eventually be publicly accessible. 

Novartis v. Union of India

In the judgment of Novartis v. Union of India, the Supreme Court of India, by its decision, had a significant effect on pharmaceutical patents. This case was decided on an appeal by Novartis against the refusal of the Indian Patent Office to issue a patent application for a particular compound, beta-crystalline imatinib mesylate. Imatinib Mesylate is used to treat chronic myeloid leukemia and is branded as “Gleevec” by Novartis. The patent application of the appellant was taken out of the “mailbox” for review only after changes had been made to the Patents Act with effect from 1 January 2005. However, before it was taken into consideration, the patent application had drawn five pre-grant oppositions1 under Section 25(1) of the Act. The appellant submitted the affidavits concerning the issue of bioavailability of imatinib mesylate in the beta-crystalline form in response to pre-grant objections. On 15 December 2005, the Assistant Controller for Patents and Designs heard all the parties and dismissed the appellant’s application to grant a patent on the subject of a product, in compliance with Rule 55 of the Patent Rules of 2003

The Assistant Controller held that the invention claimed by the appellant had been expected by prior publication, i.e. by the Zimmermann patent; that the invention claimed by the appellant had been obvious to the qualified person in the art in the light of the disclosure given in the Zimmermann patent specification; and that the patentability of the alleged invention had been disallowed by Section 3(d) of the judgment. In this case, the Court observed that otherwise the physicochemical properties of beta-crystalline ImatinibMesylate may be a beneficial inflow of properties, greater thermodynamic stability, and reduced hygroscopicity, but for the Atomic Energy section Test of the Act those features can not even be considered.

The Court also noted that in this case there is nothing on that score other than the adroit statements of the counsel and no information is given to suggest the enhanced or superior molecular efficacy of the beta-crystalline form of ImatinibMesylate that could be obtained with the in a Vivo-animal model of Imatinib free base. Also, whatever its sense may be, the Court held that the substance of the subject product, that is to say, the beta-crystalline form of ImatinibMesylate, fails the test of section atomic energy, also of the Rule, based on the materials brought before this Court, either as a set of the requirements of “patentability” or as an extension of the concept of “invention.” 

The court, inter alia, also held that the subject product, ImatinibMesylate ‘s beta-crystalline form, did not qualify for the test of Section 3(d) but did not, however, hinder patent protection of all incremental developments of both chemical and pharmaceutical substances under Section 3(d). It would be a significant mistake to interpret this decision in such a way that section 3(d), by taking Section 5 out of the Parent Act, was amended to reverse the fundamental reform in the patent regime. In this decision, that is not said. The court therefore finally held that in both the invention tests and patentability provided for in clause (j), (ja) of Section 2(1) and 3(d) of 2(1) of the Patent Act, 1970, the patent product, the beta crystalline form of imatinib mesylate failed.

This decision, however, has a far-reaching effect on public health security in India, where most people live below the poverty line and are less financially capable of accessing life-saving medicine. Section 3(d) of the Patent Act refuses Novartis a patent for a new type of “beta crystalline” for a known drug, namely “imatinib mesylate,” because it has not proven that Novartis has demonstrated new or improved treatment effectiveness. The court argued that the new type of drug must show an increase in its therapeutic effect or curative properties relative to the old form to obtain a patent. However, the court dismissed the argument made by Novartis and held that the properties submitted by Novartis could be valuable from a storage point of view, but that it would not be necessary to show ‘improved therapeutic efficacy.’ In this case, however, the court never claimed that a new type of recognized compound would never be patented. It has only been confirmed that a new type of known compound would never be patented. From this point of view, therefore, the judgment is neither anti-patent nor anti-invention of science and technology, and the judgment will act as a potential model for developed countries around the world to safeguard public health.

International perspective

One of the main issues at the UN General Assembly Special Session on Social Development (UNGASS) was the right of citizens to essential medicines at affordable prices, and how this right is being eroded by patents and the intellectual property rights framework developed by the WTO GSP. At the end of the 24th Session of the UN General Assembly Special Session (UNGASS) in Geneva, after difficult negotiations, the governments decided that strategies for securing and advancing access to life-saving and critical medicines will be able to be put into practice under international trading agreements. Not much has been made in terms of concrete progress in meeting the need for developed countries and vulnerable people to have access to life-saving medicines. A good deal has been done in terms of bringing to light the efforts of some of the developing countries to advance the agenda of pharmaceutical firms. Not much has been made in terms of concrete progress in meeting the need for developed countries and vulnerable people to have access to life-saving medicines. A good deal has been done in terms of bringing to light the efforts of some of the developing countries to advance the agenda of pharmaceutical firms.

The statement does not change the TRIPS Agreement, nor constitutes a basis to connect the Patent and health laws of developed countries. The Patents Act, 2002 closely follows TRIPs and thereby replaces the clauses of the 1970 Act which was the Indian response to the challenge of having exclusive trading rights to meet basic health needs. The provisions of the 1970 Act and similar legal structures were the cause of major complaints by the private pharmaceutical industry in developed countries in other developing countries.

The DOHA declaration is a result, in particular concerning HIV/ AIDS epidemics, of several patent controversies in the health sector. Its significance is connected with understanding that the security of public health does not prohibit the presence of patent rights in the healthcare field. In particular, it notes that TRIPS should be “interpreted and enforced in favor of World Trade Organization members’ right to protect public health and, in particular, to facilitate access to medicines for everyone.” This confirms countries that want to benefit from TRIPS ‘current versatility. In other words, the declaration does not open new directions in the context of TRIPS but rather reinforces the validity of initiatives designed to use the versatility offered by TRIPS as far as possible. The declaration is largely based on issues such as compulsory licenses relating to the application of patents. 

Compulsory licensing has long been used as a method for controlling patent exclusive rights. In the case of drugs, it is fair to ensure that the presence of a patent does not establish a condition in which a covered drug is not open to the public due to factors relevant to non-health. In the 1970 Patents Act, both compulsory licenses and rights were provided for in a sophisticated scheme. The TRIPS Agreement has not eliminated the notion of mandatory licenses but offers a more stringent structure than the present Indian system.

Accepting the flexibility offered in the Doha Declaration that TRIPS member states can use and can, for example, identify grounds for granting compulsory licenses is to be recognized as part of an international patent regime which is generally increasingly restrictive. The report deals with a range of important questions relating to medical patent implementation. However, the far more important issues concerning the nature of patentability and the length of patents in the health sector can not be taken up. For two principal purposes, the Doha Declaration remains an important weapon in India. First of all, at the ministerial conference on political issues, India was one of the most vocal developed countries in promoting the interests of developing countries. Secondly, the declaration was approved after its report by the Joint Parliamentary Committee.

At this point, the World Trade Organization (WTO) is far from being an effective answer to the health needs of developing countries in general. To a point, in some restricted areas, the Doha Statement gives temporary rest. The declaration does not even suggest that negotiations would necessarily be aimed at easing the TRIPS conditions in the new round of trade negotiations in this region. The US pharmaceutical industry’s recent militant stance indicates that there is a risk of substantial lobbying to improve patent laws in the future. Overall, TRIPS is closely followed by the Patents (Amendment ) Act of 2002 and the provisions of the 1970 Act are abolished. First of all, no official change has taken place to justify such drastic changes in the policy underlying the Patents Act. Secondly, in the last decade, Indians have not changed their domestic and international commitments about the fundamental right to health. Thirdly, the introduction of product patents by 2005 appears to have adverse repercussions on access to medicines for human crores. The government’s desire to promote its private pharmaceutical industry may have been a driving factor in this.

It is striking, however, that industry that remains fully or mainly domestic today does not have any unanimity. Some big companies which mainly produce generic drugs have opposed changes in the 1970 Patents Act and others that have developed major R&D systems believe that the new regime can offer them an opportunity to grow outside the world, while small companies generally seem to have understood that they are not important enough to have a substantial impact on policy-making.

National pharmaceutical pricing policy

In 1978, Drug Policy was introduced as the first systematic pharmaceutical regulation. Before the ad hoc command provided from time to time by the government, the industry was directed and managed to fulfil the demands of the then prevalent situation. The expansion of the pharmaceutical industry involved a much more thorough analysis of consumer demands and a leading map for the pharmaceutical industry than the narrow emphasis on drug pricing and price control orders. In 1974 the Hathi Committee had been formed, investigating the drug industry in-depth and presenting its report in 1975. The policy outlined the role of public sector enterprises with the private sector. Also defined is the role of units of foreign holdings. Price control recommendations had also been made.

In 1986 the Drug Policy was amended. To ensure a viable production for indigenous peoples, import duties on raw materials, medicines, and drugs were graded. This policy included encouraging the use of (generic) names for pharmacopoeia, strengthening quality control measures, etc. In September 1994, the policy was revised further. Licensing for the industry was abolished. PSUs only had five drugs available. The investment limit for foreign countries had risen to 51%. For 10 years the promotion of R&D has excluded new drugs from price control. The National Pharmaceutical Pricing Authority (NPPA) has been entrusted with the task of price fixation/revision. The National Drugs Authority has been established for quality control (under the Ministry of Health and Family Welfare) etc. In 1999 the government formed two commissions: 

i) The PRDC (Pharmaceutical Research & Development Committee), to determine Indian pharmaceutical enterprises’ needed support; 

ii) The drug price control review committee, the NPPA, to analyze its counterproductive drug price control mechanism (NPPA). 

The next pharmaceutical policy was introduced in 2002. The 2002 legislation entered into litigation on its price control stand, and the Supreme Court, though lifting the stay of the Karnataka High Court on that stand, ordered the government to establish such a condition that important and life-saving medicines should not fall beyond price regulation. It was expanded to include a product patent in 2005 in the Patent Act. The government produced in 2006 a revised pharmaceutical plan, to be submitted to the Ministerial Group (GoM) for review by the Cabinet. In 2012, the GoM agreed to propose a national pharmaceutical price policy only for the moment, which was approved by the Cabinet in 2012, after extensive deliberations (in light of the Supreme Court’s guidance on 2002 policies). The National Pharmaceutical Pricing Policy 2012 is following the National List of Essential Medicines (NLEM), which was prepared for price control measures by the Ministry of Health and Family Welfare. In the case of All India Drug Action Network v. Union of India, the Supreme Court of India held that all attempts should be made by the government of India to provide its people with access to life-saving medicines. The Supreme Court of India has clarified that the purpose of patent law is the promotion of scientific innovation, new technology, and industrial development. The granting of exclusive rights for the own use or sales of the product or method purchased for a limited time promotes new commercial value innovations.

  • Need for a new policy

Although confining itself to the price dimensions of drugs in 2012, the National Pharmaceutical Pricing Policy also declared that in due course, the Department of Pharmaceuticals would introduce a wholist strategy for the Pharmaceutical industry. After the last successful strategy of 1994, the global economy has in the meantime had many effects on the Indian pharmaceutical industry. The responsibilities and rights of members of the World Trade Organization (WTO) have also contributed to a different background in which the Indian pharmaceutical industry has to survive and prosper. This is complemented by the experience of introducing 1995 and more recently the DPCO and since 1998 the National Pharmaceutical Pricing Authority (NPPA). Also, the Government introduced a National Health Policy 2017 which could impact the pharmaceutical industry. This needs a new systematic pharmaceutical strategy to be formulated. 

One of the main areas of concern is that raw materials and intermediates required for the development of drugs are highly dependent on imports from one or two countries. It directly affects the safety of the entire nation’s medicines. Another area of concern is the quality safety of indigenous medicines. Although the drugs exported have a high-quality assurance system, internal standards have been developed and emphasized by the importing countries; concerns about quality control of the indigenous medicines produced for domestic use have been raised. Generic drugs are distributed unproportionately to the degree that there is no sufficient research and development. Another route, namely the acquisition of Indian companies by international companies, undermines the competitive advantage. Although the growth of the pharmaceutical industry and its related concerns is important, the overall objective of making quality drugs accessible to poor patients at affordable prices becomes more important. The very different prices for the same medicine and the mark-up for retailers, dealers, and stockholders have created a largely negative perception of drug pricing practices in the industry. Unethical marketing practices used by drug companies and marketing companies are an area of concern. 

Under this new policy, the government is to ensure that Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP) of the World Health Organization (WHO) are followed by all the manufacturing units. The Central or State Medicinal Health Regulator approval processes will be shortened and standardized. An unfair advantage is created by the marketing policies of many drug firms. The legislation on marketing practices, which is optional, is made compulsory to provide an equal playing field. Sanctions would also be imposed for violations and an implementing agency. Like other industries, it is time that only the brick and mortar retail outlets are brought into the pharmaceutical sector. Compulsory provision will be made of the static bar code containing drug pricing information. In pharmaceutical manufacturing and retailing, bar code reading and computerized billing will be added. The current NIPERs would be extended and improved, not opening up new National Institutes of Pharmaceutical Education and Science (NIPER). Based on completion and criteria such as the selection of the ‘smart cities,’ new NIPERs will be placed. To promote more Research & Development which is the government’s agenda, the import of listed commodities and services required for pharmaceutical R&D would be permitted a concessional 0 to 5 percent customs duty rate. Unless otherwise approved by the regulatory authority, all emerging drug delivery technologies should be known as ‘new products.’ Innovation would also be promoted.

Challenges to Indian patent regime 

India is bound to conform its intellectual property rights laws to the TRIPS Agreement, as it is a member of the World Trade Organization and is a signatory to the Treaties on the Aspects of Intellectual Property Rights (TRIPS). The problem comes not only from developing the legislation but also from enforcing it given the balance of needs between the citizens’ interests and the rights of the patent holders being struck by the Indian government. The problem is becoming all the more important provided that foreign companies are filing a large number of patent applications in India. In India, civil courts may impose patent rights. No special IP courts have been formed to deal with cases. Apart from the global invention patentability requirements, the Indian patent act includes particular provisions protected by Article 3 that make an invention patentable concerning subject matter such as:

  1. Inventions connected to computers: Section 3(k) bars computer programs or algorithms of their patentability. The default for this complaint is all inventions connected to the machine. In such cases, the decision does not comply with various controllers (at the patent office) who express their own opinions as far as the hardware is concerned and whether they have to follow the patentability requirements.
  2. Real science/biotechnology patentability: The life sciences sector faces difficulties in terms of the patentability of in vitro diagnostic methods and devices, as they fall under the category of diagnostic / treatment methods. Besides, isolated DNA sequences are often artifacts that the novelty condition is not complied with. The patent proprietor, therefore, faces problems in these cases in persuading the controller to make the subject-matter patentable.
  3. Patentability of drug-related derivatives: The patenting of derivatives of a pharmaceutical compound is restricted in Section 3(d). To overcome the section 3(d) barrier, a derivative must show considerable difference in therapeutic effectiveness in respect of the parents compound. Based on court explanations and decisions, only pharmaceutical substance derivatives should, in theory, be objected to in Section 3(d). However, except in the case of novel products, the question is constantly posed in all pharmaceutical applications.
  4. Time and backlog for final decision: The main obstacle for enforcing patent rights is how long it takes for the court to rule eventually. Patent proceedings usually take five to seven years, when the other party has objected, to eventually be resolved after the proceedings. In the case management hearings and time-consuming proceedings, the Commercial Court Act helps speed up the process. Nevertheless, the backlog of court proceedings and the shortage of judge officers affect the time it takes to make a final decision.
  5. Experts in the subject matter: The appointment of a professional advisor to assist the courts in offering advice on the technical aspects of a matter is given under Section 115 of the Indian Patent Act. The rules were not always used by the courts. In addition to increasing the consistency of the decision, the appointment of a technological expert on patent infringement cases would shorten the time limit for final judgment.

Suggestions 

Indian Patent Act 1970 includes provisions for safeguarding the rights of the manufacturer of domestic drugs that make generic medicines. The Act has challenged the right of millions and millions of people to health. It limited only the wealthy, and affluent segments of society to have access to life-saving drugs and opened them up to the vulnerable and needy in our society. Indian patent law combines the interests of patentees with the needs of the general public. It has also struck a delicate balance between strict constraints on intellectual property and the versatility of the TRIPs. However, the Indian court dismissed Novartis’ assertion and, as a result, Indian generic companies proceeded to sell the generic version of Glivec at about one-tenth of the original drug price. This has broadened the reach of the poor in our country to buy life-saving drugs at a lower rate.

Although TRIPS has some provisions to safeguard common people’s public health, TRIPS has not yet been very successful as it should be in developing and least developed countries for public health promotions.TRIPS should be restructured to introduce a drug pricing system that would oblige patentees to sell medications at a reduced cost to provide access to life-saving drugs to the poor in the developing world. The interests of pharmaceutical firms to make a profit and their responsibility for the vulnerable in society should receive fair care from TRIPS. Its aim should not be to prevent but to encourage the availability of medicines that meet national public health requirements, at affordable prices. A few more suggestion that can be taken into account are:

  1. Each country should form its patent law under its socio-economic needs and priorities, including public health while respecting its international obligations.
  2. Essential public health priorities include molding patent rules to increase access to medicines particularly for the poor.
  3. Governments should be able to operate quickly, even in cases of disease crisis, under a health responsive legal regime.
  4. The government shall establish a pharmaceutical patent system that explicitly governs life-saving drug accessibility.
  5. In the developing and least-developed nations, the versatility of mandatory licensing should be practised. For the issuance of compulsory licenses, a simple procedure must be devised.
  6. Parallel import should be allowed for such essential life-saving medicines.

With these changes, we can optimistically imagine an image in which people walk away from the shadow of the incurable disease into the sunlight, sing with their eyes, on the grassy plains, in fresh woodlands, and on the beaches.

Conclusion

The organization of health care has been the prerequisite of a gross breach of fundamental rights in developing countries like India. When most of the population does not have access to a minimum health service, the principle of justice is violated. The future of public health in India depends largely on how the pharmaceutical industry complies with the TRIPS Agreement. The development in the local sector of the patented product or application of the patented process is commonly referred to as ‘local patent activity.’ The inventive phase can lead to innovativeness, leading to technical growth and industrial and economic well-being which can only be accomplished through the local functioning of the patented inventions.

Big players in the drug industry’s monetary interest remain under a permanent threat to India’s access to life-saving drugs at moderate prices. Two sides of the same coin are innovation and patent. Innovations should be in the interests of humanity, especially in the medical field and patents should not only aim at collecting profit. 

References 


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