Table of Contents
Introduction
Patents are one of the highly debated forms of IPR, most importantly when it comes to the pharmaceutical industry. Patents are a form of intellectual property that gives exclusive rights to the owner of a product or a process. There is a consistent conflict between the protection of innovations in the pharmaceutical industry and the right to health.
Patents have an important role in the pharmaceutical industry and at the same time, it impacts access to medications. The patent protection allows the companies to increase drug prices, which makes it difficult for consumers to afford necessary drugs. Patents provide companies with exclusive rights for their drugs for a certain period and the profits they earn from such patents enable them to recoup the costs they spent for their Research and Development process. Thus ‘public health v. intellectual property rights’ is a significant and ongoing issue.
Role of patents in the pharmaceutical industry
Patents give protection to the intellectual property owned by pharmaceutical companies by giving them exclusive rights to their innovations. It prevents others from manufacturing, using, or selling their patented invention without their permission. This allows the companies to invest in their research and development [R&D] without any hesitation as they can reap the financial rewards by the patents. The patents are granted temporarily for a term of 20 years from the date of filing. In this particular period, the patent holders may have the monopoly power which allows them to set prices and control distribution.
The pharma companies often give licence to other parties for their patented technologies, which may authorise them to manufacture generic versions of the drugs that can be availed at affordable prices. Those agreements can be mutually beneficial as the patent owners earn through licensing fees and generic manufacturers can sell affordable versions of drugs.
Nature of pharmaceutical patents in India
Pharmaceutical patents are granted to the ‘pharmaceutical substances’ which is defined in section 2[1] [ta] of the Indian Patent Act as ‘any new entity involving one or more inventive steps’[1]. In India, the Patent Act of 1970 was passed by repealing all prior legislation. It also included inventions like methods of agriculture or horticulture, processes of surgical, medicinal, prophylactic treatments of humans, plants, or animals, etc.[2]
However, when it comes to pharmaceuticals, patents are granted only for the process of manufacture and not for the substance itself. The Patents and Designs Act of 1911 included patent rights for all products, yet pharmaceuticals were excluded by the Patents Act, which came in 1970. This made the Indian pharmaceutical industry achieve substantial growth by producing cheaper versions of several drugs. Moreover, in addition to developing drugs within domestic markets, drugs in international markets are also modified once their patents are expired. Thus in India, patent protections are not given to any pharmaceutical companies at initial times.
After The World Trade Organization’s [WTO] TRIPS [Trade Related Aspects of Intellectual Property Rights] agreement came into force, countries like India have been granting patents for drugs only since 2005, to comply with the agreement.[3] Before the TRIPS agreement, the pharmaceutical industries were not well-regulated regarding patent protection. However, the TRIPS agreement made clear principles and regulations concerning the protection of intellectual properties including patents. It set out conditions such as patent rights should be granted to any patentable inventions which includes inventive steps regardless of whether it is a product or a process.
Impacts on drug prices and accessibility
With the availability of patents, the price of the drugs is often kept high to achieve greater profits. The patent companies are aware that they can set high prices for their products with less competition. Even though the patent system is meant to protect inventions, several patent holders abuse their IP rights by monopolizing the products.
In recent times, several pharmaceutical companies primarily operate only to monopolize existing medications rather than innovating new ones. In the case of Hoffman La Roche V. Cipla[4], the plaintiff Hoffman-La Roche was the owner of a patented drug called Erlotinib. The drug was supposed to be used in cancer treatment, as it has the potential to eliminate the cancer cells without causing much damage to other cells. It was patented on on 6th July 2007. The suit was brought against Cipla, an Indian pharmaceutical company which produced a generic version of the drug. The court held in favour of the defendent stating that the life saving drug is not affordable to much of the population in India. Access to healthcare is a right that comes under the right to life provided in Article 21. However in appeal, the court found Defendant’s product to have infringed the Plaintiffs’ patent and awarded a sum of Rs.5,00,000.
Companies argue that the research and development [R&D] process involved in pharma industries are extremely complex and strenuous, which costs them even millions of dollars and a very long period. Additionally, high investments and risks are to be carried out. Thus pharmaceutical companies argue that it is not possible for them to do the R & D process without the profits they acquire from patent protections.[5] Concerningly, the companies requiring patent protection which is needed to carry out R&D may lead to a downturn in medical technology and cause injury to public health.
However, the pharmaceutical patents granted to companies give them inordinate power of monopoly which allows the patent holders to control the price of the drugs. Highly popular drug companies have more than one patent field for them and incidents of misusing the patents for blocking drug price competitions have happened a number of times. For example, a pharmaceutical company AbbVie has approximately generated 19 billion dollars by restricting the creation of generic versions of drugs as it filed about 225 patents for their drug Humira.
Potential solutions
In these circumstances developing countries like India face challenges in accessing patented medicines. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement under the World Trade Organization (WTO) focuses on protecting intellectual property rights which includes the enforcement of patent protections for innovations. However, flexibilities are brought to the TRIPS agreement to enable the member countries to act in the interest of public health.
To control the monopoly by the patents granted under the TRIPS agreement which leads to denial of access to health, the Doha Declaration was adopted in 2001 by the member countries in response to these issues. The declaration affirmed that the TRIPS agreement shall support access to medicines for all and ensure that the countries can take measures for affordable medicines.[6]
The TRIPS grants certain flexibilities for promoting public health by permitting the country to issue compulsory licences under some grounds. A compulsory licence is given by an administrative body to a third party for allowing the production of a patented product without the patent holder’s consent. The research and development for new drugs can be improved by this initiative. The compulsory licensing allows the production of generic copies of patented drugs which may be available for low prices in the market.
Conclusion
The advocates for improved intellectual property laws argue for better patent protections. However, issues arise when patents become a barrier to healthcare and public welfare. From one perspective, it can be said that the future of the pharmaceutical industry depends on patent protection as R & R&D is an important factor for the development of new drugs, and without patents, it is nearly impossible to proceed with R&D. but even though the patents help in research and development, it can’t be roughly concluded that all patents encourage innovations. An increased number of patents does not mean an increased number of different innovations. A same product can receive multiple patents in different periods by making slight changes. Compulsory licensing can be a tool as it is necessary to balance the rights of innovators and the right to access healthcare. An increased amount of international cooperation and innovative approaches can be expected to ensure accessibility and still foster creations.
This article has been authored by Ms. Adhila Fathima, student at Dr. Ambedkar Government Law College.
[1] The Patents Act, No. 39 of 1970, § 2(1)(ta), Acts of Parliament, 1970 (India)
[2] Nilesh Zacharias and Sandeep Farias, Patents and the Indian Pharmaceutical Industry, https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Patents_and_the_Indian_Pharmaceutical_Industry.pdf, (last visited feb 8, 2025)
[3] Roger Collier, Drug patents: innovation v. accessibility, CMAJ, 185(9): E379–E380, (2013)
[4] F. Hoffmann-La Roche Ltd. and Ors. vs. Cipla Ltd, 148 (2008) DLT 598
[5] Monika Narayan, Pharmaceutical Patents, Public Health and the Pandemic, EPW, Vol. 59, Issue No. 11, (2024)
[6] Abhayraj Naik, Pharmaceutical Patents and Healthcare, Socio Legal Review, Vol 2, (2006)
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