Government should avoid resort to compulsory licensing for guaranteeing drugs at affordable prices.
Considerations of realpolitik as much as equality of treatment – the bedrock of international trade – demand that the Government reasonably address the concerns raised by multinational pharma companies over the grant of compulsory licences for local manufacture of drugs patented by them against their consent. A patent is basically a monopoly granted to an inventor, giving him the exclusive right to make commercial use of the invention for a limited time period. This limited monopoly incentivises the inventor to not just invent, but also disclose his invention publicly. Such knowledge, embodied in his patent, becomes the basis for further research and development activity, including by others. Given the centrality of patents to this process, motivating companies to constantly innovate and bring new products into the marketplace, one needs to carefully weigh the implications of any move seen to be diluting the rights of patent-holders.
These misgivings, especially among multinationals, have mounted after the Controller of Patents issued a compulsory licence, last March, allowing the Hyderabad-based Natco Pharma to manufacture a cancer-treatment drug, patented and sold under the trade name ‘Nexavar’ by Bayer Corporation. Subsequently, there have been reports of the Government planning to grant three more such licences for anti-cancer drug compounds patented by two other multinationals, Roche and Bristol-Myers Squibb. It has led to even the US Government intervening and seeking ‘reassurance’ from India that the rights of patent holders would be respected. What is necessary in this case is a balanced response. Conferring an inventor the exclusive right over the production or sale of a product invented by him for a limited period is something one cannot really object to. But the Government and the public have every right to demand that this monopoly is not abused. Thus, in the event of epidemics or public health emergencies, the Government is within its rights to issue licences for manufacture of patent-protected drugs by third parties without the consent of the patent-holder. This flexibility is clearly available under the World Trade Organisation’s TRIPS Agreement.
Matters get more complex when it comes to diseases like cancer, which, even while widely prevalent, do not quite amount to a public health emergency warranting drastic counter-measures. But even here, it would not be unfair to expect that the patent-holder at least make the patented product sufficiently available in the local market, for which he has been granted exclusive right. Natco was given the compulsory licence to make a generic version of ‘Nexavar’ only after the Controller of Patents concluded that Bayer was supplying the requirements of hardly 2 per cent of the country’s eligible cancer patients. What the Government must avoid, however, is using the compulsory licensing route to guarantee not just availability, but even affordability of patented drugs. If Government wants to ensure the latter, it should source the necessary quantities of the drug directly from the patent-holder and pay a negotiated price, balancing the interests of both the patients and the inventor.