Protecting the Patent Regime for Pharmaceutical Companies in India

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides for more extensive protection of intellectual property by the WTO members who signed the agreement. India signed the agreement and subsequently amended the Patents Act of 1970, in compliance with TRIPS in 2005. However, India, as a developing country, has been faced with the choice between protection of innovation and providing access to medicines.[1] To circumvent this choice, India granted its first compulsory license in 2012, in the case of Bayer vs Natco[2], when it allowed a local company, Natco to produce a generic version of Bayer’s cancer drug, sorafenib (Nexavar). Hence, India chose to patent the product and not the process of making the drug, to make essential medicines available at affordable prices to people. This decision had a wide-ranging impact across borders and many other developing nations, that were signatories to the TRIPS agreement who were also faced with this dilemma, followed India’s approach. In response, the US government put political pressure on India. A report released by the Office of the United States Trade Representative placed India on a high priority watchlist for failing to uphold international drug company patents.[3] The question is whether it is essential for India to comply with the TRIPS agreement for growth in the pharmaceutical industry.

The patent system allows for a drug company to charge high prices for medicines for a limited amount of time so that they can meet their costs.[4] However, such high prices hamper access to medicines for people in a developing nation, like India. India has already taken a pro-access stance in the debate between access versus profit. Drugs ranging from anti-viral medicines for HIV infection to anti-cancer medicines are produced at low prices by manufacturers due to compulsory licensing in India. There are also many non-governmental organizations such as All India Drug Actions Network, the Cancer Patients’ Aid Association and Jan Swasthya Abhiyan, that promote provision of access to medicines. This debate is a debate of morals and is an emotive issue.[5] Patent laws on Pharmaceuticals affect the inflow of foreign direct investment in the country and this is often used as an argument for strengthening patent laws. However, the impact of patent laws on thedecision-making process of foreign direct investment is very minor. Patent laws have had an insignificant effect on the actual flow of foreign direct investment.[6] Hence, the tussle between access versus profit and innovation remains.

What remains to be seen is whether the Prime Minister of India, Narendra Modi, will agree to the Free-Trade Agreement with the US. If India signs the FTA then it will have to increase its patent laws in consonance with the US policy as stated in the Special 301 Reports.[7] The report singles out countries that do not provide for “adequate and effective” intellectual property protection and create a hostile environment for American Trade.[8] Three major provisions in the renegotiated NAFTA which would be incorporated into the FTA if India enters into it will profit the US pharmaceutical companies. The provisions are:

i) patents for all innovations of drugs, which includes patenting the process of making the drugs as well;

ii) grant of data exclusivity for a minimum of five years for new pharmaceutical products and ten years for biologics with an additional three years for new clinical information; and

iii) linking of marketing approval of generic drugs to the patent status of that drug (patent linkage), which would considerably enhance the monopoly power of the patent holder.[9] This would all benefit US pharmaceutical giants in the long run and deteriorate India’s policy on access to medicines at affordable prices.

Patent protection for pharmaceutical products in India should strive to strike a balance between public and private good.[10] Even though there is no moral obligation for a pharmaceutical company to provide medication to people in need, such an idea should be catered to by the state. To promote innovation the state can offer subsidies on research and development of new drugs. India should refrain from signing the FTA with the US as it would be disastrous for India as it has the world’s largest generic drug industry.

Author:  Niharika Kuchhal, student of 3rd year -BALLB at O.P. Jindal Global University, in case of any queries please contact/write back to us at niharika@khuranaandkhurana.com.

References:

[1]Monirul Azam ‘The Experiences of TRIPS-Compliant Patent Law Reform in Brazil, China, India and South Africa—Lessons for Bangladesh’. [2016] 1st ed., Intellectual Property and Public Health in the Developing World, 89.

[2] Bayer Corporation v. Natco Pharma Ltd., Order No. 45/2013, ¶ 40 (Intellectual Property Appellate Board, Chennai)

[3] Arie S. India remains on US trade policy watch list for failing to uphold international drug company patents. BMU 2013:34612949.

[4] Jacqui Wise ‘Patent Wars: affordable medicines versus intellectual property rights’. (2014) 348 BMJ 1

[5] Nevin M. Gewertz and Rivka Amado ‘Intellectual Property and the Pharmaceutical Industry: A Moral Crossroads between Health and Property’. (2004) 55 Journal of Business Ethics 295

[6] Anup Tikku ‘Indian Inflow: the interplay of foreign investment and intellectual property’ (1998) 19 Third World Quarterly 87

[7] Office of the United States Trade Representative

[8] Alexander Sammon ‘Trump Poised to Give Big Pharma a Big Present in India Trade Deal’ (The American Prospect, 26 September 2019) <https://prospect.org/world/trump-modi-big-pharma-india-trade/> accessed 31 December 2019

[9]Ibid

[10] Nevin M. Gewertz and Rivka Amado ‘Intellectual Property and the Pharmaceutical Industry: A Moral Crossroads between Health and Property (2004) 55 Journal of Business Ethics 295

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