This article is written by Saurabh Dwivedi of 9th semester of Bharati Vidyapeeth New Law College Pune
Abstract
Access to essential medicines is a critical aspect of public health, particularly in developing countries with limited healthcare resources. However, intellectual property laws, such as patents, can create barriers that hinder the availability and affordability of these medicines. While these laws incentivize innovation and investment in the pharmaceutical industry, they also create monopolies and high prices, limiting access to life-saving treatments. This article examines the impact of intellectual property laws on access to essential medicines in developing countries and explores potential solutions.
Keywords
Patents, Innovation, Public health, Healthcare resources, Human rights
Introduction
Since the establishment of the World Trade Organization (WTO) and the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), intellectual property (IP) and patents have emerged as one of the most contentious issues pertaining to the availability of medicines. Licenses are in no way, shape or form the main obstructions to admittance to life-saving drugs, yet they can play a huge or in any event, deciding job. In the absence of competition, the patent holder’s ability to set prices during the patent protection period may cause the majority of people in developing nations to be unable to afford the medicine.
The Role of Intellectual Property Laws
Patents and intellectual property regulations in general are essential for fostering innovation and capital investment in the pharmaceutical sector. They encourage pharmaceutical companies to spend money on expensive research and development procedures to find and create new treatments. Patents give the owner of the patent exclusive rights for a set amount of time, usually 20 years, enabling them to return their investment through the sale of the patented good. This protection promotes competitiveness, supports creativity, and propels improvements in medical therapies.
The WTO TRIPS Agreement
The World Trade Organization (WTO) is a global organization with 164 Member States that deals with trade regulations and offers an institutional setting for the conduct of trade negotiations among its members. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), one of the agreements members sign when they join the WTO, unquestionably has the most impact on the pharmaceutical industry.[1] The TRIPS Agreement lays out minimal requirements for the defense and enforcement of a number of intellectual property rights that WTO Members must enact through national legislation. Despite the fact that the TRIPS Agreement was ratified and entered into force in 1995, several transition periods were available to nations based on their economic standing and the level of intellectual property protection they had previously provided. Prior to the TRIPS Agreement, different countries had different systems to protecting their intellectual property rights, including patents, in order to meet their diverse demands.
Flexibilities in Intellectual Property Laws
International agreements like the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) give flexibility that allows governments to defend public health interests in recognition of the significance of access to medicines. Among these options is compulsory licensing, which enables governments to approve the manufacturing of generic versions of copyrighted medications without the patent holder’s permission. Furthermore, the Doha Declaration on the TRIPS Agreement and Public Health recognizes that nations have the freedom to interpret and use their patent laws in ways that advance access to medicines and public health.
Observing the inverse relationship between the TRIPS Agreement and access to medicine
The TRIPS stipulates minimum criteria of protection for new developments, the production or invention of goods, and artistic works. This protection often covers items that need significant sunk costs for research and development (R&D), such as medicines. Patents are used to protect novel and better medications, and IP provisions grant investors exclusive rights. The investors set a very high price for these medications as part of their effort to establish a monopolistic market with IP protection. This price increase ultimately results in less public access[2].The exorbitant price tag placed on insulin is one of the most egregious instances of pharmaceutical manipulation of prices. As a medication for the non-communicable disease of diabetes, insulin is exceptional. Even today, access to it is problematic despite the fact that it was created in 1921[3].Insulin’s creators declined to have their names listed on the patent when it was initially prepared in 1923. They both thought that the general people owned insulin. Nearly a century later, thousands of individuals no longer have access to insulin. Such an entry barrier is a result of three multinational corporations holding the majority of the market. This particular issue frequently forces patients to purchase and utilize poor or fake pharmaceuticals at a lower cost, with fatal results. The patenting of drugs, vaccinations, testing tools, and other breakthroughs for treating Covid-19 could have a significant impact on the therapies’ accessibility, price, and availability. The worst affected by this unfair and ineffective IP regime are the poor and emerging nations. In a post-Covid society, these abuses will become monstrous unless there is a global movement against them. On a national level, it should be possible for developing nations to utilize the TRIPS’s various flexibilities in more complex ways. A modest amount of national discretion is allowed by TRIPS for creating and administering the IPR regime. Pharmaceutical price gouging needs to stop right away to guarantee that everyone has access to medications. The goal of research and development should be to find solutions, not create more issues.
Indian Patent Law Amendment and Overall TRIPS Impact on Pharmaceutical Industry
Indian patent law was modified three times between 1995 and 2005 to conform with TRIPS. In accordance with Article 70.9 of the TRIPS Agreement, the Patents (Amendment) Act of 1999 created the mailbox system, allowing pharmaceutical inventions to be approved and stored until being evaluated in 2005.[4] A 20-year patent term was introduced by the Second Amendment in 2002. In this case, both the burden of proof for method patent infringement and the prerequisites for forced licensing were changed.[5] Pharmaceutical items now have full patent protection thanks to the third and most recent Amendment, the Patents (Amendment) Act 2005, which was passed in 2005. There was no product patent for pharmaceuticals prior to the 2005 Amendment. Instead of introducing process patents, this amendment introduced product patents, opening up a wider system for a compulsory license. It also added provisions on “patentable subject matter” and “exhaustion of patent rights,” and most significantly, it observed creating an “inventive step” for patentability inside the patent regime. In addition, it provided a process encompassing both “pre-grant” and “post-grant” opposition to patent applications.
Pharmaceutical product patents have a negative impact on developing nations like India by directly limiting access to affordable medications and by indirectly destroying the generic competition that had thrived for so long by offering patented medications at a reasonable cost.
In India, the pharmaceutical industry was governed by foreign corporations until 1970. However, the Indian pharmaceutical sector had phenomenal expansion between 1970 and 2005. The 1970 Patent Act’s passage was the cause of this development.[6] This Act limited the duration of pharmaceutical patents and introduced the process patent. The ability to produce pharmaceuticals at their original cost was made possible by the lack of a product patent. Additionally, it enabled generic medication producers to lower their costs of medicine production, which stunted the expansion of multinational pharmaceutical firms in India. India became independent in the production of bulk pharmaceuticals by 1990 as a result.
In India, the product patent regime was made legal after the 2005 Amendment. The Indian generic manufacturers were not permitted to “reverse engineer” the proprietary medications, which led to higher drug prices.
Bayer Corporation v. Union of India[7]
The first case in India in which Natco Pharma received a compulsory license for the kidney cancer medicine “Nexavar” was Bayer Corporation vs. Natco Pharma (2013). In accordance with Section 84(1) of the Indian Patents Act, 1970, Natco submitted an application to the Controller General of Patents in 2011 for a compulsory license for Nexavar. Natco won the case because the license was given in accordance with the March 9, 2012, ruling, despite Bayer’s appeal to the IPAB. Bayer requested a stay of the Controller’s decision, but this request was denied since the IPAB’s conclusion was consistent with the Controller’s.
Analysis of Novartis A.G. vs. Union of India[8]
Novartis, a Swiss-based pharmaceutical giant, applied to patent the anticancer drug Glivec, which is used to treat CML and Gastrointestinal Stromal Tumours (GIST). Novartis claimed that it invented the beta crystalline salt form (imatinib mesylate) of the free base imatinib. This important drug is patented in 35 countries worldwide. However, in those days, India did not grant patents to agricultural chemicals or pharmaceuticals. It was in the year 2005 in India; In accordance with the TRIPS agreement, the drug products were granted a patent. As a result, India updated its patent law and began issuing pharmaceutical drug patents. After that, in 2006, Novartis applied for a patent for its drug Glivec, but the Madras Patent Office turned it down because the drug did not significantly improve therapeutic efficacy over its prior form, which was already patented outside of India. The said choice depended on Segment 3(d) of the Indian Licenses (Correction) Act, 2005 which gives a realized substance must be protected in the event that its new structures display “improved viability”. The drug Glivec was not found to have improved efficacy by the Patent Office, so it was not considered patentable under Section 3(d) of the 2005 Act.
Novartis presented two writ petitions to the High Court of Madras in May 2006, one challenging the Madras Patent Office’s decision to deny its patent request and the other contending that Section 3(d) of the Indian Patents Act is in violation of Article 14 of the Constitution, is ambiguous, and does not comply with TRIPS.[9]
Novartis’ Writ Petitions were denied by the Madras High Court on the grounds that it lacked the authority to determine whether a domestic law violates an international treaty, so it could not determine whether Section 3(d) complies with TRIPS. Regarding Section 3(d), the Amending Act’s goal was to make it easier for citizens to access life-saving drugs and to prevent evergreening. As a result, it cannot be regarded as arbitrary and ambiguous. The Intellectual Property Appellate Board, an appellate body of the patent controller, marked the beginning of the new phase of litigation. Although Novartis’ imatinib mesylate was subject to Section 3(d) of the Act, IPAB decided not to grant a patent on the beta-crystalline form because it was deemed novel and inventive. Novartis filed a Special Leave Petition with the Supreme Court to challenge the aforementioned order.
Conclusion
The struggle to find a cure and a vaccine for COVID-19, as well as the experiences of the HIV/AIDS pandemic in the 1990s, emphasize the conflicts between intellectual property rights and public health concerns. There is proof that the lessons of the HIV/AIDS pandemic have been learned. The readiness of pharmaceutical firms like Gilead Sciences to enter into voluntary licensing agreements with manufacturing firms in underdeveloped nations to service less developed markets is one of these lessons. The speed with which nations like Canada, Germany, Chile, and Ecuador changed their respective patent laws to forbid market exclusivities and permit compulsory licensing of COVID-19 pharmaceuticals should it become necessary is an illustration of how TRIPS flexibilities can be used. There are still significant obstacles to access to medicines in the future. It depends on how nations implement intellectual property laws to maximize the TRIPS flexibilities in their national laws as well as whether the appropriate policy decisions and measures will be adopted if they are to be successful in guaranteeing effective access to medicines in developing nations. In the framework of intellectual property rights and trade agreements, there are still significant obstacles to access to medications.
[1] https://link.springer.com/chapter/10.1007/978-3-030-89125-1_5
[2] https://legaldesire.com/the-effects-of-intellectual-property-rights-on-access-to-medicines/
[3] Joseph stiglitz, Wealth before health? Why intellectual property laws are facing a counterattack, The Guardian, 19 Oct 2017 08.42 BST.
[4] Chaudhuri, Sudip. The WTO and India’s Pharmaceutical Industry: Patent Protection, TRIPS, and Developing Countries Oxford University Press, 2005, 65.
[5] The Patent (Amendment) Act 2002, No.38, Acts of Parliament, India, 2002 http://www.wipo.int/wipolex/en/text.jsp?file_id=207496 accessed on 15 Apr. 2021.
[6] https://www.lawctopus.com/academike/impact-of-trips-on-pharmaceutical-industry/
[7] https://www.casemine.com/judgement/in/5cc44ecc9eff43397d6ab18c
[8] https://www.casemine.com/judgement/in/5609af38e4b0149711415dcf
[9] https://blog.ipleaders.in/analysis-novartis-g-vs-union-india/
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