Relevance: GS-2: Issues Relating to Development and Management of Social Sector/Services relating to Health.

Key Phrases: EAC, Pharmacy to the world, Doha Declaration on TRIPS and Public Health 2001; Evergreening, Compulsory Licensing;

Context

• The EAC (Economic Advisory Council) to the PM has recommended restricting the time period in which patents are open to being challenged by the public to 6 months from the date of its publication.
  • This process of challenging a product/ innovation before being granted a patent is termed pre-grant opposition.

Key Highlights

What is a patent?

• Patents are exclusive rights that the government gives for the usage of innovation for a specific time period.
• In India, the time period for patent validity is 20 years.

When can a Patent be granted?

Under the Indian Patents Act 1970, a patent can only be granted for an innovation. Any intervention is regarded as innovation only when

• It is novel.
• It has inventive step/s or is non-obvious.
• It is capable of Industrial application.
• It should not attract the provisions of sections 3 and 4 of the Patents Act 1970.

What is the evergreening of patents?

• It is a technique used, primarily by pharmaceutical companies, in order to withhold the monopoly of producing a particular drug by making minor changes in the structure of the product.
• It is not allowed in India as per Section 3(d) of India Patents Act 1970.
• Legality of Section 3(d) was challenged in the Novartis case.
  • Section 3(d) allows for generic competition by patenting only novel and genuine inventions.
  • Novartis’ Gleevac, for which patent was filed with the regulator, was merely a beta crystalline form of a known drug (i matinib mesylate) and there was no significant change in form or efficacy. Hence, it didn't classify as a genuine innovation.

What is Compulsory licensing?

• Compulsory licensing is when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself.
• It is part of the TRIPS agreement signed in 1995.
  • In 2001, the Doha Declaration on TRIPS and Public Health reiterated that compulsory licensing was allowed in case of a national emergency.
  • And countries were free to decide what constituted a national emergency.
• It provides for the production of generic medicine for the domestic market. But compensation has to be paid to the original patent holder.
  • In 2012, India’s first-ever compulsory license was granted by the Indian Patent Office to Natco Pharma for generic production of Bayer Corp’s Nexaver® (Sorafenib Tosylate), a life-saving medicine used for treating liver and kidney cancer. [ Bayer sold the drug for a month dosage at Rs 2.8 L whereas Natco claimed to provide the same for Rs 9K].
  • This satisfied Section 84(1) of IPA, 1970
    • On the grounds of the drug being made available at a reasonable price.

Pharmaceutical Industry in India

• The Indian pharmaceutical industry is the world's 3rd largest by volume and 14th largest in terms of value.
• It is known as the ‘pharmacy to the world’.
• It is the largest producer of ‘the Generic Drugs in India’.
• Approximately 75% of India’s demand for manufacturing medicines is met by local manufacturers.
• It has contributed 1.5% of GDP directly and another 3% of GDP indirectly.
  • Also $ 10Bn foreign exports have strengthened India’s Forex reserves.
• In 1969, for Indian Market, 95% of Export products and 5% from India fulfilled the drug needs. In 2020, the trend reversed, with 15% of Exported items and 85% of domestically manufactured drugs.
• Challenges
  • 70% of API has to be imported from China.
  • Complex drug development process which is time-consuming and difficult.
  • Price Capping decreases the profit margins of the industry which renders them unviable in the longer run.

Concerns/ Challenges of IPR regime

• Concerns with the recommendation regarding pre-grant opposition
  • Reduced time period for people to render their grievances against the patents.
  • Cumbersome process of consideration of patents will increase the number of errors in granting patents.
    • A recent study on pharmaceutical patent grants in India revealed that 7 out of 10 patents are granted in error by the Indian Patent Office.
• Lack of Sufficient manpower in patent offices to handle 50,000 patent applications per year.
• US Trade Representative’s (USTR) Special 301 report has criticised the Indian Patent ecosystem as weak.
• Lack of balance between the Right to Public Health and incentivising industries to innovate.
  • This should be balanced as unless the Pharma industry is incentivised to invest, the Right to health without lack of medicines won’t be able to be enforced.

Way Forward

• Pre-grant Opposition process must not be changed to restrict it to 6 months.
• Increase in manpower for decreasing errors in granting patents.
• With diplomacy, dialogue and discussion, The USTR’s views must be nudged in the spirit of Public Health.

Source: The Hindu

Mains Question:

Q. Explain the Patent regime in India? What are the recent challenges, observed during the pandemic? Suggest a suitable way forward.