Pharmaceuticals & Patents, a talk by Justice Prabha Sridevan

 

I am grateful to the Dr. N.S. Gopalakrishnan for inviting me to inaugurate this workshop, the theme being “Pharmaceuticals and patents.” This is a very important one today when there is a claim for a strong patent regime. But I must stress that a strong patent regime is not antithetical to public interest or public health, just as concern for human rights of the accused is not antithetical nor in negation of the human rights of the victims, and human rights are common to all. Any judicial authority must discharge its duties in accordance with the Constitution. That is our Basic Document. Art.21 is the Right to Life. The Supreme Court has expanded the meaning of this far beyond just life, to include a life with dignity with equal right to education, medicines, health etc; in short everything that makes our life complete. We must read the Patents Act too with our Constitution in mind, and in fact the IPAB has adopted a motto and logo which reads as “balancing IP protection.” So Right to Health and Access to Medicines cannot be ignored and among the various angles through which this right can be inbuilt into the Patents Act, compulsory license is one. To touch every subject would have made my speech lose focus, and hence I have chosen this and examined how countries across the world have used this tool in their national interest.Sometimes one thinks that the Patents Act is only concerned with pharmaceutical patents. Even if the members of the IPAB sneeze while hearing a pharmaceutical patent case, it gets reported in a newspaper or written about in someone’s blog. One feels a whit claustrophobic. Bit it would happen, isn’t it? It is money. The pharmaceutical business is a powerful player and India with its teeming billions is a desirable market. And as Milton Friedmann famously said- the only social responsibility of business is to make money, and as ABBA sang long before you were born “It is a rich man’s world”. But the law cannot be one-sided, it has to balance the market and human rights and the chapter on compulsory licenses was introduced “to meet emergent public health situations (permissible under paragraph 6 of the Doha Declaration on TRIPS and Public Health)”.
compulsory licenses identify for us the beneficial face of the law of patents, especially
pharmaceutical patents, a law which is hard law in contrast to the soft law of human rights.

Every country must introduce flexibilities to achieve their Constitutional goals and
aspirations. We must understand that substantive law provides a vehicle to achieve this end, it is not the end itself. And while it should be so drafted to comply with the international agreements, we must keep in mind the country’s interest and bring in proper standards and procedures. The Doha Declaration on TRIPS and Public Health affirmed the position regarding the interpretation and the application of the TRIPS agreement in public interest to promote public health and to provide access to medicines for all. It recognized that the Members had the right to use “play in their joints” in their domestic laws and spoke of flexibility.

A recent study on “The Use of Flexibilities in TRIPS by Developing Countries: Can they
promote access to medicines” notes that: “Policy makers in developing and developed
countries need to base their implementation of intellectual policy rules on these pro-public health and pro-access principles. ”

Our country in the 1950s not only had a huge population it also had a high rate of epidemic diseases. So soon after Independence our country established Hindustan Antibiotics Ltd to produce affordable generic drugs. Next it formed the Justice N. Rajagopala Ayyangar Committee to review patent laws. Our patent policy was based on the Ayyangar report. It is an amazing far-sighted report. Today 50 years late, when I need an answer to an issue that arises before the IPAB, I read the Report to provide the context and the background for my question. I find my answers there. It addresses many questions that are bothersome even in the post –TRIPS world, including a) the tension between patent protection to food and medicines on the one hand and the easy access to them on the other, and b) compulsory licensing and how it balances access and inventor’s rights.

In the Book “Patent and Trade Disparities in Developing Countries” the role of Courts is
underlined. “From a developmental perspective, sans strong procedural mechanisms, both the pre- and post- TRIPS regime can result in a lack of tools that serve to
calibrate patent regimes with the objectives of the system. Given this, the burden
on the national administrative and judicial bodies to evolve appropriate
procedures to balance national objectives with the patent regime becomes more
pronounced.”

Enacting the law is only the first step. It will then have to be fine-tuned and evolved by our judicial decisions, viewing both the international trade agreements and the promises made there under and our Constitution and the interest of the people. A Lancet article says that, “The TRIPS agreement does not limit the grounds on which compulsory licences can be granted, and does not prevent patent applicants from having to demonstrate enhanced efficacy for their allegedly new and useful inventions. There are many problems facing access to and rational use of medicines in India but the provisions within the country’s patent laws, if more extensively and properly applied, should help rather than hinder such access.

India’s laws and experiences could provide a useful example for low-income and middle income countries worldwide.” Obviously the world is watching us! Compulsory license has been the subject of heated debate and controversy. We saw the furore generated when the Controller General of India ordered India’s first compulsory license to
Natco for the manufacture of a drug sorafenib tosylate patented by Bayer and sold as
Nexavar. The loudness of the welcoming cries was matched by the voices of disapproval and anxiety.

A study undertaken by the National Board of Trade, Sweden analysed the new set of rules that enabled import of medicine to developing countries. In the course of the study it reviewed cases where Compulsory Licenses had been used. On the effect that Compulsory Licenses have on innovation and investment in the industry, the study reports two views. One view holds that they led to a decline of the industry. The other view cautiously concludes that the “assertion that Compulsory Licenses categorically harm innovation is probably wrong.”

According to Chien where there is a market in developed countries, the companies do not make their profit from the developing countries and therefore there is little likelihood that Compulsory Licenses in the developing countries would affect innovation. She also says that for global diseases “there is very little privately financed R&D for these diseases.”

The Ayyangar Report while dealing with the changes recommended in the Indian law
regarding Compulsory licenses observed that: “There is no uniformity in the economic
problems which confront different countries at any time or even the same country at different periods in history and account therefore has to be taken of the actual conditions in the matter of devising the precise adjustments which are needed to rectify the imbalance which the patent system is apt to produce if left uncontrolled.” So the special needs of that particular country and her people are the only relevant criteria in the grant of compulsory license. The State hears a different tune of social responsibility far removed from the tune that businesses hear.

That is why the Ayyangar report emphasises that one must bear in mind national issues and the welfare issues while evolving a patent regime. It says that “With all the handicaps which the system involves in its application to under-developed countries there are no alternative methods for achieving better results.”

Information and technology have shrunk the world, but for an epidemic to spread its pan reach the world is a mere village today. A superbug will take, not only the developing and the low income countries on its train of disease and death, even the developed countries will be fellow –travellers. In the article “Swine Flu, Bird Flu, SARS, Oh My!, applying the Precautionary Principle to Compulsory licensing of Pharmaceuticals under Art 31 of TRIPS, by Jennifer R. Andrew. 2011 Michigan St. Law Review” the author asks us to imagine a scenario in the year 2015 when a superbug the likes of which we have never seen, spreads slowly but steadily around the world. “A Swiss pharmaceutical Company holds the patent to the only drug proven effective in treating this disease … but … is commanding an extremely high price… Rather than wasting precious time trying to negotiate… Congress authorizes a compulsory license for a generic version by import or manufacture to stockpile enough of the drug. The Swiss Government files a complaint with the WTO….. The Swiss government files a complaint with the World Trade Organization (WTO) claiming the United States is infringing its national’s patent under the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement) because this precautionary use does not fall within the acceptable reasons for issuing a compulsory license without prior negotiation under Article 31(b) of the TRIPS Agreement. Would the Swiss government prevail?” The writer acknowledges that access to medicine is a growing concern and deals with the precautionary principle for issuing compulsory pharmaceutical licenses without prior negotiation during the threat of a pandemic or similar life threatening health crisis
The Doha Declaration must be understood to mean that the TRIPS agreement does not and should not prevent Members from taking steps to protect public health and so it can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all. The pro-public health language of the Doha Declaration “affirming the (TRIPS) agreement can and should be interpreted and implemented n a manner supportive of WTO Members’ right to protect public health and, in particular to promote access to medicines for all, should be used as an interpretative gloss on Article 31(b) of the TRIPS Agreement.” In the same article the writer says that in spite of the admirable intentions of the Doha declaration the provision regarding waiver has been invoked only once. The article worries about the procedural barriers in the event of a pandemic. “However it has been suggested that a country who issues a compulsory license for domestic use under Article 31(f) may export a portion of its manufactured output as long as the license is predominantly for the supply of the domestic market.”

Another article by Vanessa Kerry and Kelley Lee examines the Doha declaration along with the subsequent to TRIPS agreements which “further undermine the capacity of the poor to access affordable medicine”. They say that these public health protections must be set apart as basic needs and shared goals, from trade negotiations at all levels. The importance of this fencing off can be seen in the way Taiwan secured access to Tami flu.

This report comments that the Taiwanese government remained concerned to minimise potential damage to its image as a trading economy. This reality cannot be ignored that countries even while desiring to protect their people’s health and public interest, have to worry that their economy and development are not jeopardised , the eternal Snakes and Ladders game!

Is the flexibility of compulsory licensing given to ensure that corporate interest does not
flourish at the expense of public interest? The anti-trust swing in USA seemed to indicate it.

The reason for granting a compulsory license must be based on valid grounds, for it is an
invasion into the property of the rights owner. It is a statutory power that must be exercised with care and caution. It must be considered case by case. There can be no across the board decision to grant all applications, nor to reject all of them. In the context of public health, the regular warning that is used against compulsory licensing is that it would rob the pharmaceutical companies of the incentive to invest in invention. It is undeniably an arguable proposition but how sufficient is the empirical data to support it? The money in the business is not generated solely by the patented drugs. And as seen earlier for many of the global diseases the R&D is not privately financed. Moreover I think Man has an innate impulse to invent for its own sake, long before patents were granted human beings were making inventive steps. Further apart from the satisfaction that is generated from the exercise of invention itself the applause and the appreciation are also motivating factors. Right from the time we sang or warbled “Twinkle twinkle little star” to a group of admiring adults our fix for admiration was engrained in us and we never learn to detoxify ourselves of that addiction.

Further as the articles in the course material given to you indicate, not all invention is made by private enterprise. So this threat of invasion into the patent right is not likely to paralyse the inventive impulses.

Chapter XVI of the Patents Act deals with the grant of compulsory licenses. We are told
about the general principles that are applicable to the working of inventions (S.83). They
include encouragement of inventions, ensuring that they are worked commercially, fully and expeditiously, protection of patent rights, protection of public health and promotion of public interest, and availability of the inventions to the public at reasonably affordable prices. On the one hand it is a beneficial provision and hence its provisions have to be construed with that in mind, and on the other hand it is an invasion into an ownership right and that cannot be lost sight of either. Quite narrow is the path.

Joseph Yosick, argues the case for US introducing compulsory licensing provisions in the
case of non- use of the patent and where the one patent blocked a later one, and submits that it would be a beneficial addition to the US patent system and would not significantly impact the incentives for innovations.

Knowledge Ecology International has examined the instances of grant of compulsory
licenses in developing and developed countries in recent times.10 USA invoked it for
government use as in 2001 ’DHHS Secretary Tommy Thompson used the threat to use 28
USC 1498 to authorize imports of generic ciproflaxin for stockpiles against a possible
anthrax attack.11 In January 2002, the Ontario Advisory Committee on New Predictive
Genetic Technologies published a report which noted that the Doha Declaration calls upon nations to take measures “to protect public health and, in particular, to promote access to medicines for all,” and this statement must not provide just “a hollow right”. This report refers to a preliminary ruling of the European Court of Justice on compulsory licensing of intellectual property rights under European competition law, in the IMS Health vs. NBC case.

It refers to China which in 2005 used the threat to a compulsory license to obtain voluntary licenses to manufacture generic Tami flu. Examples are given from Malaysia, Korea, Indonesia, and Taiwan all of which relate to compulsory licensing in the case of medicines.

An interesting case is the one that came before the Federal Court in Canada relating to
compulsory license for sodium enalapril –sodium iodide complex. 14 Merck’s product was called Vasotec. The judge rejected the appeal by Brantford holding that the patent would expire in 2007 and so any way there was only ‘a limited window in which Brantford could derive any benefit’. There was no evidence of Merck overcharging its customers nor was there any evidence that there was a shortage of enapril based medicines in Canada and that the alleged demand was “an artificial demand” and finally that Merck’s silence to Brantford’s request cannot be construed as a refusal. Compulsory license was not granted. Clearly therefore the application for grant of compulsory license must be dealt with case-by case on the basis of the facts of the individual case and its merits.

Dr. Enrico Bonadio in a recent article wonders if the recent order of the Controller-General of India granting a compulsory license to Natco is TRIPS compliant. Dr. Bonadio argues that these findings do not take the TRIPS debate relating to the working requirement, and, that such findings may be in violation of TRIPS. He explains that the Paris Convention and Article 31 of the TRIPS have to be read with and interpreted together with Article 27(1) TRIPS, which in turn explains that patents shall be available and patent rights enjoyable without discrimination as to whether the products are imported or locally produced.

The Doha declaration on the other hand says that issues of Public health will trigger off the imposition of this involuntary contract on an unwilling right-holder. “Unlike consumer products where the elasticity of individual human need may vary with affordability, the demand for pharmaceuticals is independent of affordability.”16 The IPAB while considering the question of granting stay, in the appeal filed by Bayer observed that ,” in the case of pharmaceutical inventions more than any other invention, the requirement will not fluctuate because of the non- affordability of the invention. Regardless of however steeply priced the invention is, people will fall victim to RCC and HCC. The need/requirement is not dependent on the cost of the treatment.” The capacity for fulfilling the country’s requirements for medicine and produce drugs varies from country to country. And further the Member countries are also worried that any action to protect their health requirements may result in retaliation by the stronger countries which affect their economy. So they must necessarily keep balancing economy and basic rights, and this too is a factor in the invocation of this tool of TRIPS flexibility. But there are poor people in those rich countries too, who fall sick and need medicine.

There are two ways of looking at the concept of compulsory licensing. One is that
knowledge and fruits of knowledge are located in the public commons and to encourage “the tree planters” they are allowed to fence for a short while what they planted, so that they pluck the fruits exclusively, then the fence is removed so that access is a free- for all. Sometimes it is necessary that during the fence- in period there is a need to make the fruits available to all, so what should have been in the commons is restored to the commons subject to certain conditions. The other way to look at it is as an interruption into the rights of the owner, a transgression which but for the provision in the statute is just what it is – a transgression, i.e., a transgression of the intellectual property ownership. Compulsory licensing which is present in the TRIPS as “other use” is an introduction of public interest into private ownership, and it chafes the trade /commercial interest of the developed countries. How far can one weave in
flexibilities into what is basically a trade agreement? And how do we weigh in the
considerations of public health crises and facilitation of easy access to medicine? It is a
constant see-saw between the absolute ownership rights of the patentee and the social
considerations which include medical emergency or crisis and the Right to health and access to medicines. As Holmes, the detective not the judge, said “The game is afoot.” It should be interesting.

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This entry was posted in Patent, TRIPS flexibilities, TRIPS plus, TRIPS&IP rights, Uncategorized, WTO. Bookmark the permalink.

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