Relaxations On Intellectual Property Rights For Production Of Generic Drugs During Covid-19 Pandemic
The second wave of covid-19 or rather tsunami of covid 19, as observed by Delhi
High Court has knock-down India's medical system. Appalling news from all over
the country report deaths of numerous people due to a lack of medical facilities
including lack of effective drugs used in treatment of Covid infected patients.
As per medical professionals, the current situation can be improved if drugs in
adequate quantity are available for all patients. Relaxations on intellectual
property rights will allow production of generic drugs which is intended to be
interchangeable with the innovator’s products.
Invoking compulsory license can
be a way forward in tackling the issue related to the inadequacy of drugs in
India's fight against Covid-19 cases. Compulsory license of drugs like Remdesivir, Tocilizumab and Favipiravir which are used to treat covid-19 can
allow generic pharmaceutical companies to manufacture these important drugs to
increase their supply and availability in market to meet the growing demand of
Patents allow exclusive rights of the invention or the process used to create
the invention and deny usage of the same to any other entity. Compulsory License
is a concept under law, whereby a patent holder has to necessary allow other
manufacturers, applicants to use the patent product or the process.
31 under the agreement on trade-related aspects of Intellectual Property Rights
(TRIPS), lays down that such authorisation of the use of patented products or
process can be ordered by the government in case of a national emergency, where
circumstances of extreme urgency exists and where such license is issued for
non-commercial use. The government issuing compulsory license has to be decide
upon reasonable remuneration to the Patent holder and validity of such license.
Under the Indian Patent Act 1970, section 84(1) allows for a compulsory license
if reasonable requirements of the public are not satisfied at a reasonably
affordable price. Section 92 of the Patent Act lays down a special provision for
compulsory license on notification by the central government. The effect of this
section is that during a national emergency, or in circumstances of extreme
urgency, the central government is empowered to grant a compulsory license to
the applicants seeking patent use. Section 92(3) also provides immunity to the
applicants to use a patent without following the procedure of compulsory license
laid down in section 87 of the act. Section 100 of the Act also empowers the
central government to even take over the invention for purposes of government.
Recently, three-judge bench of Supreme Court comprising of Justices DY
Chandrachud, LNagswara Rao and S Ravindra Bhat took Suo moto cognizance of the
issue (In Re-Distribution of essential Supplies and Services During
Pandemic) and asked the central government to consider the compulsory license of
drugs like Remdesivir, Tocilizumab and Favipiravir which are used to effectively
treat covid-19 patients.
Supreme Court asked the Centre government to invoke
section 92 of the patent act to issue Compulsory License with terms and
conditions of these patented drugs. Justice Bhat observed that countries like
Germany, France and Canada have resorted to the tool of compulsory licenses when
it comes to essential drugs used to treat covid-19 patients. Justice Bhat also
cited example of Bangladesh which produces a generic drug of Remdesivir which is
now being exported to many countries. Government of Jharkhand has also requested
permission to import Remdesivir from Bangladesh.
In an order passed by the division bench of Delhi High Court in Rakesh Malhotra
v. Government of National Capital Territory of India, the hon'ble court opined
that a very strong case for grant of the compulsory license is made out.
However, the patent holders' interest should be kept in mind. They observed that
it upon investment and hard work of patent holder that such medicines are
created in the first place.
They pointed out that patent holders should ramp up
their production capabilities on a war footing basis. The patent holders should
also be encouraged to give out voluntary licenses to other manufacturers of the
required drugs. If such efforts are not beneficial to safeguard the lives of
people, then there exists no other option but to grant compulsory license at an
adequate license fee to prevent the death of numerous numbers of people.
India has been a harbinger for granting compulsory license at TRIPS negotiations
and this is the most suitable time for implementation of law pertaining to a
compulsory license. Nearly, a decade ago, India laid down a precedent by
granting compulsory license to Natco of a patented drug Nexavar by Bayer
Corporation for Germany. The patented drug was used to treat kidney cancer. A
compulsory license was granted to Natco because Bayer's patented drug was not
fulfilling the reasonable requirement of the public at an affordable price.
Following a decade old precedent, Indian generic drug producer, Natco Pharma
Limited once again has applied for a compulsory license before the controller of
Patents to manufacture the drug 'Baricitinib' used to treat COVID-19 patients. Natco
Pharma has applied on grounds of section 92(1) read with section92(3) so that
affordable production of the drug can be done along with improved availability
of the drug.
The patent of the drug 'Baricitinib' lies with Incyte Holdings
Corporation and was granted to them in the year 2018. It is argued by Natco
pharma that production of the patented drug is not enough in the country and the
drug has received emergency approval for its efficacy in treating Covid-19
patients. It is also argued by Natco that along with low production of the
patented drug, it comes with exorbitantly high prices. Only 8870 tablets of the
patented drug are produced in India in the year 2019 and only 8385 tablets in
2020. The average cost per tablet is INR 3230 and 14-day treatment turns outs to
be around INR 45220 per patient. Natco pharma aims to sell the drug at INR. 15,
20 and 30 for 1mg, 2mg and 4 mg variants respectfully.
Even though compulsory license seems to be a viable option, however looking at
the current situations there is a strong opposition against this method by giant
pharmaceutical companies. They argue that active pharmaceutical ingredient (API)
is not available in the country which is used in the manufacturing of the drugs.
Therefore, even if technical know-how is given to generic drug producing
pharmaceutical companies, they would not be able to improve conditions. These
companies suggest government to invoke other options like section 47 of the
patent act 1970, which allows the government to import patented drugs for their
use. Further, the government can invoke section 26(B) of the Drugs Act to order
manufacturers those who have the facilities to produce specific drugs.
India is one of the worst hit countries due to covid-19 and one of the major
reasons for that is lack of medicines to treat patients. Relaxations of
intellectual property rights will ensure enough production of generic drugs. For
the interim period during which compulsory license operates, pharmaceutical
companies will be paid royalties on sale of such drugs. However, Pharmaceuticals
companies are not comfortable with the idea of compulsory license.
developed nations on many fronts have lodged their dissatisfaction on using
tools like compulsory license. This anxiety also reflects that even during the
pandemic, which has caused deaths of millions of people, pharmaceutical
companies are not ready to shed their profit generating mindset. The developed
countries of the world are also shying away from their responsibility to relax
the Intellectual property law regime during current situation. Thereby, again
launching a debate between the global north and global south.
Looking at the
current times, pharmaceutical companies (owing to their moral duty) should give
out voluntary license to the companies who apply to them to manufacture the
patented drug at reasonable terms. If the government is serious about the
execution of ‘make in India’ scheme and ‘Atma Nirbhar Bharat’, they should
compulsory license of the essential drugs which are used in the treatment of
covid-19 patients. The government should not shy away from its duty and prevent
loss of life even if it means granting temporary relaxations to the current
Intellectual Property law regime.
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