- The Indian market was an avenue for foreign pharmaceutical enterprises from the mid-19th century until the country’s independence and a little later. In part, this is attributable to the 1856 introduction of patent law based on the British Patent Law of 1852, which was subsequently updated in 1859 and further revised in the 1870s and 1880s. The Patents and Designs Act of 1911, which replaced all prior patent laws and granted 16-year patents for all product categories, was passed into law.
- An estimated 80% to 90% of the Indian pharmaceutical business was dominated by Western MNCs, and almost all of the patents awarded in the nation were owned by these companies. The lack of a strategy of import substitution in the pharmaceutical business led to the importation of completed goods, while the product patent system was a contributing factor.
- While patent rights allowed companies to charge extravagant rates for pharmaceuticals, they also severely restricted Indians’ ability to get such drugs. Only process patents for chemicals, pharmaceuticals, and food were suggested in 1959 by the Ayyangar Committee, which was formed in 1957 to investigate these concerns.
- As a result of these proposals, in 1965 the Lok Sabha introduced a draught that eventually became the Patents Act, 1970 after many changes. The Product Patent Act of 1911 was repealed by the Patent Rules promulgated in 1972 and put into effect. Patent protection was similarly shortened to seven years by the Patents Act of 1970. The government also passed the Monopolies and Restrictive Trade Practices (MRTP) Act in 1969, which capped monopolistic expansions at Rs. 20 crore.
- There was a dramatic drop in the number of overseas subsidiaries (from 10 to two between 1973 and 1985) and their ownership shares after the passage of the Foreign Exchange Regulation Act (FERA) in 1973. Some multinational corporations (MNCs) never returned.
- In less than two decades, Indian companies seized these possibilities, becoming self-sufficient and ensuring that the Indian population had access to low-cost pharmaceuticals using reverse engineering methods. Domestic companies supplied 70% of APIs and 80% of the formulations needed in the Indian market by the end of 1991. A rise in exports to developing nations and the United States and Europe also occurred as a consequence.
- The number of indigenous enterprises in the top ten by sales increased from two in 1971 to six in 1996. In terms of exports, the pharmaceutical sector now ranks tenth, and it is the third-largest volume producer of pharmaceuticals and the fourteenth-largest value producer. A key legislative decision by the Indian government to implement a “product patent” system beginning in 2005 placed this industry’s upward trajectory in jeopardy. When it comes to Intellectual Property Rights (TRIPS), all World Trade Organization (WTO) nations are required to abide by this agreement.
Costs are rising.
- Indian industry’s success storey would be halted by the introduction of product patents, which are based on reverse engineering. The rising costs of bringing new drugs to market and the growing financialization of the pharmaceutical business are becoming more apparent to the US and Europe, on the other hand.. Study from Tufts Centre for the Study of Drug Development puts current drug development costs at $1.395 billion. In clinical trials, just one out of every five new medications is effective.
- Even more worrisome is that the pharmaceutical business is concerned about an innovation deficit and patent cliff. In the end, this resulted in pharma firms developing a wide range of tactics to manage risk and maximize shareholder value. Outsourcing research, acquisitions, out-licensing compounds from upstream biotech businesses and outsourcing clinical trials have all contributed to a new value chain in the drug development industry because of the significant risk and unpredictability inherent in the process.
- Restructuring was necessitated by this confluence of the global pharmaceutical sector and financial markets and regulatory developments in India’s patent system. Non-equity partnerships with multinational corporations (MNCs) have become more common throughout the industry’s reorganization.
- An important consequence for India’s population was that of the restructuring’s impact on those who were most vulnerable, raising issues like access to medicines in the face of high-priced patented medications, the use of vulnerable populations in clinical trials, and the resulting disasters that resulted from this. There have also been challenges to India’s Parliamentary sovereignty.
- In May 2006, Novartis, an Indian subsidiary of a Swiss multinational corporation, sued the Indian Patent Office in the Madras high court for refusal of a patent under section 3(d), which prohibits patents from being renewed in perpetuity. In court, the corporation argued that section 3(d) was unconstitutional since it denied them a patent. More than the lack of patent protection for its Gleevec-brand medication was at issue; it also questioned Indian Parliamentary authority and hence its own sovereignty.
- Specifically, Novartis claims that clause 3(d) contradicts the government’s constitutional requirement to harmonies its national legislations with its international commitments. At the end, Novartis lost both in the Madras High Court and the Supreme Court of India. It did, however, demonstrate the lengths to which pharmaceutical multinational corporations would go in order to maintain their dominance.
- a patent is a legal document that grants the patent holder the right to prohibit others from creating, using, selling, or proposing to sell the subject matter of the patent “claims.”. As defined in this article, medical patents cover a wide range of topics, including pharmaceuticals, methods of making and using them, medical treatment regimens, surgical procedures and medical devices as well as hospital information technology (such as software for managing hospital bed utilization, care distribution, medical staff allocation and cost containment) and combinations of these. Medical patents will be defined broadly in this article.
- Unless a license or equivalent “right to use” is granted, others may be unable to exploit any portion of the patented subject matter, giving the patentee an important commercial advantage. Because of this, it is possible for the patentee to successfully prevent prospective rivals from creating or selling the patented item or method, while offering the patentee a mechanism for collecting the value and incurred development expenses of the innovation (e.g., licencing)
- Usage-based patents (machinery/process/method and manufactured goods) and design patents (ornamentation) are among the most common types of US patents, while the Plant Variety Protection Act (PVP Act), which is not to be confused with a plant utility patent, is the primary type of US trademark protection. The emphasis of this essay will be on “utility” patents in the medical field
- For a limited period of time, biotech firms, academic institutions, and individual doctors all rely on patents to safeguard their exclusive innovations from the competition.
- It is possible for a patentee to make money via the employment of sophisticated patent and/or technology licensing techniques and other arrangements (e.g., joint research agreements). There are financial incentives for inventors who develop new items, such as greater product sales prices, for patentees. Since of the high costs associated with patents on new pharmaceuticals and medical devices, some believe that this system is immoral because it denies poorer people access to high-quality medical treatment.
- Some advocates of patents have argued that the process of patenting contributes to the economy, since it encourages companies to invest in research and development. The absence of patents imputes the converse of this rationale. The reason for this is that companies invest in research and development because the development of technological advancement can be productized and marketed; often generating huge profits for the company with successful research and development projects. Patenting makes this productization process very profitable, since the patenting process ensures that others do not replicate the product concerned to gain a share of the potential profits. This creates an incentive for companies to invest money in research and development and this investment leads to technological advancement. The incentive would not exist without the protections which patents can provide.
- Critics of patenting processes also argue that patents encourage monopolies. Companies, for example pharmaceutical companies who patent drugs can sell those drugs at quite high prices. The process of competition would ordinarily discourage this method of artificial pricing, but the operation of a patent can preclude most forms of competition. Patents have also been critiqued given that they preclude competition even where another inventor has created the same or a similar product using independent methods.
- Regenerative medicine, human modification, and embryonic stem cell patents are among the most contentious biotechnology patents. There is a lot of time and money involved in producing goods based on these sorts of medical patents, and it might take years before the product is ready to be offered to the public. Companies and people working in health care across the globe continue to pursue medical patents because of the tremendous effect these technologies have on illnesses previously deemed incurable and/or deadly, and the enormous improvement many of these products bring to our quality of life.
The Case for Patents
If IPR or Intellectual Property Rights are enforced, or if they are not, the Pharma industry is sometimes engaged in a battle about whether the sector exists to alleviate health worries of those who are less fortunate and ensure that inexpensive pharmaceuticals are available to everyone. Let’s have a look at the concerns first before delving into the merits and disadvantages of this topic, shall we? It is true that the pharmaceutical industry invests enormous sums of money in the development of new pharmaceuticals, which are then sold at prices that allow them to recover their costs while still making a profit. There is also a widespread belief in the West that since pharmaceutical companies invest so much time and money in R&D, they ought to be able to patent their inventions and prevent their rivals from making or selling similar products. Pharmaceutical corporations are incentivized and encouraged to develop better medications by patenting their innovations and charging a premium for them in most countries.
The Case against Patents
These ideas haven’t been adopted in Third World countries, which insist that pharmaceutical corporations may only patent their manufacturing techniques, not the actual pharmaceuticals themselves. As a result, any other company may produce the same formulaic pharmaceuticals using a different manufacturing procedure, guaranteeing that prices are fair because of market competition. This reasoning is based on the fact that much of the Third World is impoverished and hence unable to pay the high medicine costs, despite the fact that the majority of their inhabitants are frequently destitute and in need. As a result, Western pharmaceutical companies have opposed to this side of the issue since they would lose the monopoly on their patented medications and the enormous investments, they have made in them. According to GATT (General Agreement on Tariffs and Trade), the WTO (World Trade Organization), and other WTO accords, the signatory nations had to deconstruct their protectionist regimes and allow medications to be copyrighted not just for their procedures but also for their products.
Debating the Issue
Examining both sides of the argument reveals that they are both well-founded and include substantial arguments. When it comes to patents, the pharmaceutical industry has invested much in research and development (R&D) and drug trials, and the time it takes to get a new medicine on the market is very considerable. To be fair, emerging countries require attention as well, as their people have not yet reached a point where they can pay medications that are too costly to get there. As a matter of fact, the rapid spread of HIV in Third World nations is the clearest case for not patenting the pharmaceuticals that cure it, therefore assuring that these treatments are more affordable to the general public. Because of this, the discussion between those who support patents and those who oppose them has become very hot, with neither side willing to back down from their beliefs. For this to work, the pharmaceutical industry and governments throughout the globe need to engage in a meaningful debate and devise solutions that benefit both parties.
Some Possible Solutions
Parties need to be willing to compromise and avoid brinksmanship in order for this to happen. Pharma corporations may cross-subvention pricey pharmaceuticals, particularly those used to treat life-threatening diseases, in this manner. As a further option, they may be able to consent to five or ten-year patent protection instead of the current lifetime or decades-long protection that they now have in place. In addition, there should be improved coordination between the various pharmaceutical corporations so that they may offer their products for free in their own nations and in developing countries. They may then encourage their local industries to spend more in research and development rather than just copying the medications created in Western countries, as is often done in many Third World nations. In addition, they may help the poor and needy balance some of the losses of the Western Pharma companies by taking on part of the expenditures. HIV medications and other life-threatening illnesses are subsidised by the government in India, where both models are now being implemented.
Conclusion
The pharmaceutical industry, for example, where several Indian pharma companies often price their products in a way that benefits the poor, may be the best option. If governments in Third World nations don’t make healthcare a right and guarantee that their commitment is not just in words, but that they walk the talk by improving hospital facilities and making both generic and proprietary pharmaceuticals inexpensive, the struggle between stakeholders will not be addressed. The pharmaceutical industry cannot be left to the market’s whims, which is why it is imperative that all stakeholders implement policies that help the poor and needy.
