Date: 23/12/2022

Relevance: GS-3: Issues relating to Intellectual Property Rights.

Key Phrases: cancer medicines, out-of-pocket spending, Spending on research and development, Intellectual Property Protection, patents on incremental innovations, Compulsory Licenses, Patent Act, 1970, TRIPS Agreement.

Why in News?

• The subject of the spiraling costs of cancer medicines and their implications that have frequently been highlighted the world over were dwelled on in a recent report (“Cancer Care Plan and Management”) by the Rajya Sabha’s Standing Committee on Health.

Observations of the committee:

• About 40% of cancer hospitalization cases are financed mainly through borrowings, the sale of assets, and contributions from friends and relatives.
• This situation has arisen because “even average out-of-pocket spending on cancer care is too high” and “spending for cancer care in private facilities is about three times that of public facilities”.
• The seriousness of problems concerning the treatment of cancer, the estimated incidence of which in India was nearly 1.4 million in 2020.

Impact on survival rates:

• The catastrophic treatment cost has seriously impacted survival rates in developing countries.
• Breast cancer:
  • Survival rates:
    • The five-year survival rates in India and South Africa are estimated to be 65% and 45%, respectively, in contrast, in high-income countries, it is nearly 90%.
  • Cost:
    • A World Health Organization (WHO) report on the pricing of cancer medicines and their impacts stated that the cost of a course of standard treatment for breast cancer would be equivalent to about 10 years of average annual wages in India and South Africa and 1.7 years in the United States.
    • According to WHO, the costs associated with other medical care and interventions and supportive care would make overall care even more unaffordable.
    • A month’s treatment using the drugs could range between ₹48,000 and ₹95,000.

The justifications by pharma companies:

• Excessive costs of breast cancer medicines can be explained by the interplay of two related factors.
• Expenditure on Research and development:
  • Large pharmaceutical companies spend over $3 billion in bringing a new molecule to the market, which they must recoup in order to remain in the market for innovation.
  • WHO’s observation:
    • Spending on research and development may bear little or no relationship to how pharmaceutical companies set cancer medicine prices.
    • Companies set prices with an eye to maximizing profits, thus denying patients from taking advantage of medical breakthroughs.
• Intellectual Property Protection:
  • Over the past three decades, pharma companies in the developed world have successfully persuaded their governments to strengthen the rights that they derive from patents and other forms of intellectual property rights by which they can exercise monopoly control over their products.

Scope and the power of the monopolies

• Ordinarily, patent rights over a medicine last until the expiry of its patent term, after which generic competition leads to a reduction in its price.
• In the case of several non-communicable diseases, including cancer, the situation could be quite different.
• Introduction of newer therapies:
  • Even before the generic producers enter the market, newer therapies could be introduced as standard care for treatment, replacing drugs of an earlier generation.
• Incremental Innovation:
  • In the case of pharmaceutical patents, the leading firms in the industry often obtain patents on incremental innovations involving older medicines (“evergreening” of patents), thus extending their monopoly rights over the medicines.

Question of ‘Right to life’:

• Constitutional guarantee:
  • The lack of access to these critical medicines has not only pushed the life of patients and their families into deep financial stress but has also jeopardized their right to live with dignity, a fundamental right guaranteed under Article 21 of the Indian Constitution.
• Interpretation of Various Judgements:
  • The Supreme Court of India has interpreted the right to life as the most precious human right, which forms the “ark of all other rights and must therefore be interpreted in a broad and expansive spirit so as to invest it with significance and vitality which may endure for years to come and enhance the dignity of the individual and the worth of the human person”.
  • In this spirit, the Court has, in several judgments interpreted the right to health as an extension of the right to life under Article 21.
• WHO:
  • According to the WHO Constitution, “enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being”.

A way out:

• Compulsory licensing:
  • The most obvious option is to authorize Indian companies to domestically produce high-priced cancer medicines, including those mentioned above, by granting compulsory licenses (CLs) in keeping with Sections 84 and 92 of the Patents Act.
  • The CLs override patent rights, enabling domestic companies to manufacture generic alternatives when the prices of patented medicines are high.
• Invoking Section 100:
  • The Government can invoke provisions of Section 100, which empowers it to authorize any entity to use a patented invention without the authorization of the patent holder.
  • Section 100 can be useful if no domestic company shows interest in obtaining a CL for any of the cancer medicines mentioned above.
  • In view of the concerns expressed by the Rajya Sabha’s Standing Committee on Health regarding the high prices of cancer medicines, invoking the provisions of Section 100 seems to be the best way forward.

Conclusion:

• The Indian government should take action when the current climate appears favourable for the issuance of CLs and use this tool to encourage local manufacturing of cancer medications and make them accessible.

Source: The Hindu

Mains Question:

Q. What are the reasons for the high cost of cancer treatment in India? Suggest some measures that the government should take to encourage local manufacturing of cancer medications and make them accessible. (250 words).