Business

Indian Pharma: Balancing Patent Rights and Obligations

The ICTSD is carrying an analysis of the post-TRIPS generic pharmaceutical sector in India (there is also a report on Thailand). For a mere industry analysis the report has little new to offer, as a previous report by the CDS has already offered a more extensive analysis.

However, it is an extremely lucid case study that should be read for its policy implications. The strength of this report is in explaining the policy framework of the new Indian Patent Act, understanding the TRIPS flexibilities available to India, and in re-establishing the correct frame of reference when evaluating the TRIPS regime.

The Indian Patent Act

An analysis of the Indian Patent Act is particularly timely in view of Novartis’ challenge to the new law. Section 1 of this report sets out, in great detail, the changes made to the Indian Patent Act in 2005, in order to comply with TRIPS requirements. It looks both at commonly understood flexibilities that India has used fully, e.g. pre- and post-grant opposition as well as others that it has not - e.g. compulsory licensing, or the Bolar exceptions.

I was surprised, in fact, to learn of the Bolar exceptions and their exclusion from the IPA.The Bolar exception (see also SouthCentre) allows generic companies to experiment on patented drugs, in order to develop further drugs or file for marketing rights upon expiry of patent. This is an exceptionally useful tool that can reduce the anti-competitive effects of patents and prevent companies from using Incrementally Modified Drugs (IMD) to extend the effective life of patents. Yet, India has not used this exception as it could.

As this shows, the report is a must-read for anyone wanting to understand how developing countries can and should extend their laws within the bounds of TRIPS, to further the dual goals of industry competitiveness and public health.

In the first instance, it is necessary to provide sufficient flexibilities in the patent laws so that the domestic pharmaceutical industries can get a chance to develop. It must be recognised, however, that the advantages that the Indian policy makers could provide to their nascent pharmaceutical industry in the 1970s, by way of introducing a process patent regime cannot be replicated in a TRIPS-determined patent system. But at the same time, these countries can provide an enabling environment for the domestic industries by carefully designing provisions that relate to patentable subject matter and compulsory licences.

An understanding of TRIPS flexibilities is important because thus far developing countries have been pushed by the US and EU to adopt their interpretation of patent legislation, which is far too rigid and reduces innovation in the sector. This analysis cautions against that approach, showing both the flexibilities India has used, as well as pointing to others it still can.

For countries like India having matured pharmaceutical industries, the challenges are even more formidable. Besides engaging in a constant process of reviewing the newly amended Patents Act, India would have to take complementary measures to ensure that the firms are not able to secure benefits that run contrary to the realisation of the fundamental objective of access to medicines at affordable prices. A legal regime for preventing misuse of patent monopoly would be an essential component of such measures.

Public Health: Balance of Patent Rights and Obligations

That is the biggest reason to commend this report - that it sees that the fundamental problem is one of public health concerns. Thus far, the IPR debate has largely been driven by the developed world as a way to strengthen patent holder rights. This analysis debunks that framing, pointing out that in developing countries other considerations are also important:

What this implies is that strengthening of the rights of the patent holders, which is the cornerstone of the TRIPS Agreement, must be tempered by the inclusion of provisions that effectively address public interest concerns.

If developing countries hope to retain some of the rights they fought for at the Doha Declaration, they must be clear as to why they are modifying national laws. It is not simply to make their laws TRIPS complaint. Rather, it is to ensure public health concerns are addressed. And to do so, they must insert into the debate of patent holder rights, the question of patent holder obligations.

But above all, developing countries would need to ensure that their TRIPS-consistent patent laws provide a balance of rights and obligations. While several of the obligations would be country-specific, in our view, inclusion of obligations for ensuring the realisation of the objective of access to medicines at affordable prices would, remain the touchstone of their patent laws.

© 2006 The Discomfort Zone.