You are on page 1of 15

Pharmaceutical Patents: With Special Reference to Right to Health Intellectual Property (IP) is defined as any original creative work

manifested in an intangible form that can be legally protected Rights associated with intellectual property which gives legal protection is referred to as IPR. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. When we speak of IP rights, we refer to controlling the way IP is used, accessed or distributed. There are seven kinds of intellectual property rights under the Agreement on Trade Related Aspects of Intellectual Property Rights which is a main agreement under the auspicious of World Trade Organisation. In which, patents is one kind of intellectual property rights. The main focus of this paper is to analyses the pharmaceutical patents in general and role of pharmaceutical industry in India with regard to right to health aspects in particular. A patent is an exclusive right granted by the government to an inventor to prevent others from making, using, selling, distributing or importing his new product or using his new process. This right is granted for a limited period of time. Under sec 2(m) of the patent act 19701 patent means a patent for any invention granted under this act. It is granted if three basic conditions of

India Patents Act 1970(39 of 1970) (2005) s2(m)

patentability are met. Generally, the three requirements for patentability are: novelty (new characteristics, which are not prior, art, that is, which do not form part of the existing state of the art), inventive step or non-obviousness (knowledge being not obvious to one skilled in the field), and industrial applicability or utility (inventions which are susceptible to industrial application)2. Patents confer exclusive rights regarding the production, sale and use of the patented subject matter, they can be used to restrain competition and set prices higher than those that would have existed if competitive products were available. This is the very purpose of the patent system, which is generally justified as necessary to encourage investments to develop new products and processes. Indian Patent Laws: In 1994 India signed the General Agreement on Trade and Tariffs (GATT) and became in 1995 party to the nascent WTO TRIPS Agreement. The TRIPS Agreement allows WTO Member countries to adopt their own definitions of the patentability standards. Article 27(1) prescribes, in effect, that patents "shall be available for any inventions provided that they are new, involve an inventive step and are capable of industrial application", but does not contain any specification about the precise way in which these criteria are to be applied. The TRIPS agreement requires countries to extend patent protection for any invention whether products or patents in all fields of technology, for a 20 year

Shahid Alikhan and Ragunath Mashelkar, Intellectual Property and Competitive Strategies in the 21 st Century,2nd edn., (Kluwer Law International,Netherland, 2009),at p.5.

term, subject to patentability criteria. Accordingly, in the process of implementing the TRIPS Agreement, India had to revise several of the main aspects of its patent regime. This process was undertaken progressively through several amendments to the Patents Act, 1970. Accordingly India extended its patent protection to pharmaceutical products as stipulated under the TRIPS agreement. Under the former Patent Act, product patents were not available for pharmaceutical products. Only processes to create these substances were protected, and even then for a limited period of time relative to other inventions. In accordance with its TRIPS obligations, The exact language

outlining 'inventive step' in the Indian patent law amendments reads as follows: 'feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in art'3. Although Indian courts had previously decided that inventive step in India was synonymous with nonobviousness, the new amendment to India's patent law seems to employ a 'non obviousness-plus' standard requiring not only non-obviousness, but

also 'technical advance as compared to the existing knowledge', or 'economic significance' or both.

India Patents Act 1970 (2005) s2(l)

Patent relating to pharmaceutical product: Under the patent act 1970 as amended by 2005 pharmaceutical substances and drug are patented. Sec 2(ta)of patent act 19704 describes pharmaceutical substances means any new entity involving one or more inventive step. A patent claim relating to a pharmaceutical product may relate to an active ingredient as such independently of or jointly with formulations, salts, prodrugs, isomers, etc., or cover any of these subject matters separately. It may also solely cover a manufacturing process or include both a process and a product. In India, the patent office has considered that the Patent Act denies claims to compositions obtained by mere admixture resulting in the aggregation of the properties of the components there from. Thus, a novel pharmaceutical composition with a single active ingredient (known or novel) with an inert carrier is not patentable in India as there is no synergy between the components viz. the active compound and the inert carrier. Right To Health On The other hand right to health is one of the fundamental rights of the human being. Regardless of age, gender, socio-economic or ethnic background, we consider health to be most basic and essential asset of human being . Right to health has been recognised as a human right on several occasions at the international level. The most important of which is the Universal Declaration of Human Rights1948, which affirms in Art.25 (1) that: Everyone has the right to

India Patents Act 1970 (2005) s2(ta)

a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control5. In addition, The United Nations further defined the right to health in Article 126 of the International Covenant on Economic, Social and Cultural Rights in 1966. Art.11 (1) states that The States parties to the present Covenant recognise the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing and to the continuous improvement of living conditions. Thus mental and physical health is the very foundation of the human personality. The good health is the basis for survival and progress of the human race. The right to health extends further and

includes a wide range of factors that can help us lead a healthy life. The Indian Constitution also recognizes the right to health. The duty of the State to ensure the creation and the sustaining of conditions congenial to good health is governed by the Constitutional directives contained in Articles 39(e) (f), 42 and 47 in part IV of the Constitution of India. The Indian judiciary has interpreted

Universal Declaration of Human Rights 1948 The State Parties to the present Covenant recognise the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

the right to health as a fundamental right according to art.21 7 of the Indian constitution. Article 21that guarantees freedom of life and liberty has been interpreted to cast an obligation up o the state to preserve right to health as preservation of human life is of paramount importance.8 Intellectual property right and right to health:Inherent in the right to health is the right to the underlying conditions of health as well as medical care. Thus right to health consists primarily of the right to health care and the preconditions for health9. The patent system may affect health considerations, on the one hand, by leading to reduced access to pharmaceutical products, and on the other hand, by restricting access to products or processes that are necessary for downstream innovation or the creation of improvements. It is important to note here that the impact of the right to health on patent law depends largely on the link between the right to health and intellectual property rights10. Patent law impacts most significantly on the right to health as it may lead to higher drug prices in the short term and, hence, it may result in restricted access. In addition, patent law encourages a specific type of research that is not always in the public interest. Furthermore,

Article 21 reads No person shall be deprived of his life and personal liberty except according to procedure established by law 8 See, Parmananda Katara V Union of India AIR 1989 SC 2030 at 2043. 9 Irina Haracoglou, Competition Law and Patents,1st edn., (Edward Elgar Publishing Limited,UK,2008),at p.77. 10 Ibid at p.83.

patent law may affect the creation of improvements or downstream innovation with potential implications on the development of medical products. The access to essential medicines debate has primarily centered on the accessibility and affordability of brand name pharmaceutical patents to millions of people around the world suffering from a variety of illnesses, including HIV/ AIDS, tuberculosis, and malaria. The huge disparities in access to these essential medicines is reflected by the fact that less than 17 percent of those in need of these life extending medicines at the epicentre of the pandemic in subSaharan Africa have access to them11. With the increasing privatization of the health care sector the duty to protect plays a key role in the achievement of the right to health. If anything, the importance of the obligation to protect is even greater for access to medicines, as pharmaceuticals are almost entirely manufactured and marketed by the private sector. Given that accessibilities and particularly economic accessibility is part of the right to health, the state is under an obligation to make sure that pharmaceutical manufacturers do not limit the accessibility of essential drugs. High prices limit the economic accessibility of the drug where the patients have to bear the cost. Where a state acquires the drugs for the patients or contributes to a comprehensive health insurance system that provides the


James Thuo Gathii, Approaches to Accessing Essential Medicines and the TRIPS Agreement, cited from Peter K.YU(edn), Intellectual Property and Information Wealth, First Indian Edition,(Pentagon Press, New Delhi, 2009), at p.393.

drugs to all patients who need them, high prices do not limit economic accessibility after all the drugs are free for the individual. However, even highly industrialized countries find it increasingly difficult to finance such a system. The policy option is not available for the individual. They have no choice but to ensure that prices are adequate, e.g. by enforcing competition rules on the trans-national corporations that produce and then import the drugs into their territory and, if patents have an impact on drug prices, by constructing their patent system in a way that it does not result in excessive pricing12. Trips and right to health The Preamble to the Trade-Related Aspects of Intellectual Property Rights Agreement recognises that IPRs are private rights, it also recognises the underlying public policy objectives and the special needs of the developing countries to have flexibility in implementing the provisions of TRIPS. Article 27(1) of the TRIPS Agreement provides that signatory States are obliged to protect any invention, whether products or process, in all fields of technology, provided that they are new, involve an inventive step and capable of industrial application13. TRIPS Agreement, in Article 8, says that in implementing the TRIPS Agreement all WTO Members were entitled to adopt measures to


Holger Hestermeyer, Human Rights and the WTO- The Case of Patents and Access to Medicines, 1st edn., (Oxford University Press, New York,2007), at p.110. 13 Article 27 of the Trade Related Aspects of Intellectual Property Rights, 1994.

protect public health and nutrition. The Agreement does not and should not prevent Members from taking measures to protect public health.14 There is no single tradition of intellectual property protection in the TRIPS Agreement. Patents for pharmaceutical substances have been a subject matter of special interest in India. Modern pharmaceutical industry, which is popularly identified with the allopath form of medicine, blossomed and flourished as a result the therapeutic revolution of the twentieth century. With the increase in the production and development of new drugs, the pharmaceutical industry became an industry based on R&D. Eventually dominance in the pharmaceutical industry came an industry based on R&D15. For the past few decades, the pharmaceutical industry in Western industrialized economies has perceived India as both a benefit and a cost. As a source of high-quality, low-cost bulk drugs, India provide a benefit by permitting Western companies to cut their production costs. Until 31 December 2004, Indias process-patenting regime limited patent protection to providing exclusive rights only to the process through which a product was produced, rather than to the product itself. This regime thereby allowed Indias innovative, high quality and low cost pharmaceutical industry to develop and to produce

Declaration on the TRIPS Agreement and Public Health, WTO Ministerial Conference, Forth Session Doha, 20 November 2001, WT/MIN(01)/DEC/2, para. 4.


Feroz Ali Khader, The Law of Patents- With a Special Focus on Pharmaceutical in India, 1st edn., (Lexis Nexis, Nagpur, 2009), at p.17.

low-cost Indian versions of high cost Western pharmaceutical for sale in developing nations without infringing on the original patent holders patents16. The right to health has become increasingly justifiable, particularly in countries where access to medication has become national emergency. In this context, the relationship between the right to health and patent law has become critical. It is worthwhile to note here that the Doha Declaration clarified that TRIPS should not prevent members from taking action to protect public health and that the flexibility provided for in TRIPS could be used for this purpose. It also true that the TRIPS Agreement should be interpreted and implemented in line with the right to protect health and promote access to medicine for all 17. One of the flexibility the TRIPS agreement provided to the member countries to protect poor people in respect of public health is compulsory licensing under article 31. The 2001, the WTO Ministerial Conference officially initiated the Doha Agenda with a declaration that acknowledged the need to recognize a sovereign nation's right to protect public health, even at the expense of intellectual property rights. Namely, the Doha Declaration affirmed a sovereign nation's authority to grant compulsory licenses during national emergencies and to define what constitutes a national emergency. A country that was suffering a major epidemic could compel licensure for domestic production of patented


George T.Haley and Usha C.V.Haley, India: a study in patent-law effects, cited from Robert C.Bird and Subhash C.Jan (eds), the Global Challenge of Intellectual Property Rights,(Edward Elgar Publishing Limited), at p.98. 17 Ibid at p.96.


medication that they could not otherwise afford18. India's provisions for the compulsory licensing of drugs have been considered relatively broad when compared to most of the world's patent systems. Section 84 of the Patents Act 1970 provides for compulsory licenses. Further, section 92A states that compulsory licence are available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India.

Limitations to Patentable Subject Matter; Section 3(d); Derivatives and New Uses of Known Substances:India's new Patents Act prohibits patents on derivatives of known substances, unless such derivatives display significantly enhanced efficacy. Section 3(d) of the new Patents Act provides-'The mere discovery of new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discover of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new


Article 6 of the Doha Declaration 2001, 2003 11

reactant19 .An explanation to the section elaborates that salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered as the same substance unless 'they differ significantly in properties with regard to efficacy' Thus, it seems that unless some increased level of effectiveness can be proven, a standard which is not yet entirely clear, only new chemical entities (NCEs) can be patented under this section there by preventing ever greening. This provision has been controversial to say the least and litigation has already ensued over this provision. Natco Pharma a generic drug maker in India pursues a compulsory license to make a version of Pfizers maraviroc HIV pill. NATCO recently filed an application with the Indian patent office for Nexavar, Bayer's blockbuster drug for treating liver and kidney cancer on the grounds of exorbitant pricing and non-availability/limited availability. The application was published on August 12, 2011. This step taken by Natco is significant, however, because a successful outcome could open the door for other Indian generic drugmakers to override patents for all sorts of medicines. Novartis's Challenge to Section 3(d):Swiss pharmaceutical company Novartis AG filed a petition in the Madras High Court in August 2006, seeking a stay of the Patent Office's rejection under s3(d)

India Patents Act 1970 (2005) s3(d).


of its patent application for its Glivec drug.30 Novartis also asked the Court to declare s3(d) unconstitutional and in breach of India's TRIPS obligations. The Madras High Court ruled against Novartis holding that: (1) s3(d) is not unconstitutional; and (2) it did not have jurisdiction over the TRIPS issue, and the WTO would have to decide whether s3(d) is TRIPS-compliant.34 Novartis AG did not challenge the judgment of the Madras High Court upholding the constitutional validity of section 3(d). The next round of litigation then commenced before the IPAB However, the IPAB held that Novartis alleged invention did not satisfy the test of section 3(d) in as much as Novartis did not provide data to show that the beta-crystalline form of imatinib mesylate exhibited significantly enhanced therapeutic efficacy over imatinib mesylate, the known substance. Challenging the IPABs order, Novartis approached the Supreme Court directly by filing a special leave petition challenging the IPABs interpretation and application of section 3(d) to its patent application. Subsequently, CPAA and Natco filed cross-petitions challenging the IPABs findings on other issues including novelty and inventive step . The is still pending before the supreme court. Section 3(d) of the Patents Act is the public health safeguard in the Indian patent law that, amongst others, disallows patenting of new forms of known substances, unless the new form exhibits a significant enhancement in efficacy. It is one of the safeguards introduced by Parliament of India in 2005 to prevent evergreening. Evergreening is the practice of pharmaceutical companies to obtain patents on frivolous or minor

changes to known drugs and thereby establish or extend their monopoly over a drug.

Pharmaceutical Industry in a today context In spite of the fact that between 1985 and 2005 a long string of almost fifty mergers and acquisitions led to a progressively more concentrated pharmaceutical industry, it is still hard to argue, from a worldwide perspective, that the pharmaceutical is a monopolized industry20. Recently Sun Pharma has join hands with multinational pharma -Merck to push for branded generics in developing countries, the availability of cheap and affordable generic medicines is further threatened. In the past few years, there has been a series of highprofile foreign takeovers of Indian pharma firms in the last two years. Among others, Daiichi Sankyo bought Ranbaxy, Abbott bought Piramal Healthcare Solutions, and Sanofi bought Shantha Biotech. It is believed that the acquisition of large and medium Indian pharmaceutical companies by MNCs will make the use of TRIPS flexibilities redundant. The Indian Pharma industry has clocked a growth of about 12% over last decade. Going at this pace, it may take more than 2 decades for the MNC Pharma companies to recover their investment costs involved in buying out the generics businesses of Indian companies of size of


Michele Boldrin and David K.Levine, Against Intellectual Monopoly, First paperback edn., (Cambridge University Press, New York,2010),at p.225.


Ranbaxy and Piramal Healthcare. This may gradually lead to hike in prices of key generic drugs as the lobbies of MNC grab more say in the domestic drugs market. Thus it is necessary for government to take necessary step to provide to reach a sustainable compromise between negotiating parties, and the most complex balance to find will always be the one between the protection of private interests in pharmaceutical patents and the protection of public interest and health.