The Hindu Business Line : Product patents: Far from public good?

Unless New Delhi sees the priority of public health, both domestically and overseas — especially in countries with vulnerable economies — drug prices will rise dramatically and will not be within easy reach of the poor. Public health will then be the biggest casualty.

IT APPEARS as if the UPA Government is out to please giant pharma MNCs, vis-à-vis the WTO mandate, by not allowing a thorough discussion on the product patent regime to take place in Parliament, in particular, and the country at large, and by bringing in an ordinance to legalise the product patent regime, which could sound the death-knell for the Indian pharma sector involved in the manufacture of generic drugs. If this happens, millions of Indians suffering from such terminal diseases as cancer will have no other option but to die.

The Exclusive Marketing Rights (EMR) law is weak. Many may not know that the Madras High Court witnessed last year a war between Novartis, the pharma and agribusiness giant, and the Indian manufacturers of the generic drug Glivec.

Novartis was granted the EMR for the blood cancer drug Glivec by the Indian Controller General of Patents, Designs, Trade Marks and Geographical Indications on November 10, 2003. The court also granted it interim injunction against the Indian manufacturer in April 2004.

However, the decision of the Madras High Court has been challenged through a Public Interest Litigation (PIL) and the matter is now in the Supreme Court. The PIL questions the very validity of the EMR law. It is very important to remind ourselves that nearly a year has passed since cancer patients have been denied the use of this affordable life-saving drug. Imagine the financial strain of these poor and innocent patients caused by the price of the drug. While the Indian manufacturer's generic costs only about Rs 1.5 lakh for a year's dose, the price of the imported variety is around Rs 15 lakh!

How can a poor Indian afford this astronomical price if the ordinance that the UPA Government now contemplates becomes law and only Novartis can sell the drug? And the 20-year monopoly that a product patent grants to a company will financially strangulate these poor patients.

It is a similar story with anti-AIDS drugs. Shifting from the first line of treatment to the second line, involving newer drugs, would push up the patient's bill from $160 per person to $4,000 — from about Rs 7,200 to Rs 1,80,000 — a 2500 per cent jump!

Another important angle that New Delhi seems to have overlooked is that approximately 67 per cent of Indian generic drugs are exported to poor countries, including some in Africa, and the new ordinance will hit severely both the producer, India, and the importer, which will be denied access to these generics.

Set against the Nehruvian legacy of "public good", the inheritors of the legacy who now rule in New Delhi, seem to have lost sight of the goals of Indian democracy.

In this connection the summary of the fourth Peoples Commission Report (PCR), chaired by the former Prime Minister, Mr I. K. Gujral, makes sense. It states: The term "invention" should be reserved for a "basic novel product or process involving an inventive step which is capable of industrial application". Since the WTO itself is currently reviewing the issue of patenting of "micro-organisms" and "non-biological and micro-biological processes", India need not pre-judge the issue against the nation's interests by declaring them patentable. Compulsory licensing is permitted even within the framework of TRIPS Articles 31(a) and 31(b), and Brazil and China have passed legislation allowing compulsory licensing in such circumstances. This omission from the proposed amendment must be remedied forthwith.

Even though the production is supposed to be "predominantly" for supply in the domestic market, export to Africa must be seriously taken up. For "Mail-Box" cases, if any production activity has been started by any enterprise during the transition period — January 1, 1995 to December 31, 2005 — it may be allowed to continue production on the payment of a nominal royalty to the patent-holder within a range of 4-5 per cent of the sales turnover, at ex-factory price.

Pre-grant opposition provision to patent grant must be retained

As of now, at the Government of India level, the drug policy is handled by the Ministry of Chemicals and Fertilisers, the health policy and price control by the Ministry of Health and Family Welfare, and intellectual property rights/competition by the Commerce Ministry.

Such overlap of responsibility, when it is a question of the utmost importance of national health and welfare, can clearly be prejudiced when one ministry, out of self-interest, oversteps its functions at the expense of another. And to cap it all, the influence of the Finance Ministry may be all-pervasive. The nation's health is at great risk.

It is important to recall in this context how the US operates in such situations. It maintains "whatever be the international commitments or agreements signed by it, if any agreement conflicts with the interests of the American people, American law will prevail; the American law will subdue that commitment".

One honestly wishes that were the case with our vast land where, even now, nearly a decade and a half after "reforms" were initiated, the plight of the poor is worse than ever before. There is an urgent need to have a closer look at how the different ministries function inasmuch as so crucial a question as the one on product patent is concerned.

There is an urgent need to take a serious re-look at the entire question of drug prices, with complete co-ordination between the three ministries cited above. This is simply not happening in New Delhi.

Perhaps it may be a prudent idea to have a semi-statutory body, a sort of `Empowered Committee', to handle all matters connected with life-and-death issues such as the one discussed above under the new IPR (Intellectual Property Regime) regime. It is not too late in the day to initiate steps in this direction, failing which ad hoc policies such as the EMR/product patent grants could cause irreparable damage to the interests of this nation at large.

A fundamental question India must face is how it can harmonise its national developmental strategies and global processes and disciplines and bring about a synergy among and within the different sectors of global economy which clearly impact India's developmental aspirations. Clearly this is not happening in the country. And to cap it all, intellectual property rights illiteracy is pervasive. The absence of a clear-headed public debate on the question is indeed disturbing.

(The author is a senior fellow of the Alexander von Humboldt Foundation.)