Last year, when Thailand issued compulsory licences to overcome patent barriers that stood in the way of providing affordable medicines to treat patients, people and public interest groups stood up and cheered. When the European Commission, the United States Trade Representative and the drug companies retaliated by threatening to impose trade sanctions or to withdraw any new medicines from Thailand, people across the world were up in arms.
Now, it’s India that may draw the ire of the pharma industry and its protectors in the US and EU. Three years after India revised its 1970 Patents Act, patent offices have granted product patents on several drugs, including medicines for HIV/AIDS, hepatitis C, chronic kidney disease and cancer. The patented drugs are prohibitively expensive and, in the absence of generic competitors, will remain out of reach of patients. Faced with the impact of its decisions on public health and patients’ lives, India’s patent office is at a point where it must consider compulsory licensing to authorize generics competition in the event that patent holders fail to fulfil their duty to make patented medicines available and affordable. Before even one licence has been issued, rumbles of discontent are already being heard from pharma multinational companies (MNCs).
Illustration: Malay Karmakar/ Mint
In India, the importance of generics production in fostering competition and reducing prices was first recognized by lawmakers in the Patents Act of 1970. In the following decades, India was not only successful in making drugs affordable, but also significantly increased availability by building its capacity to produce essential and life-saving drugs, diagnostics and vaccines for its people. It also went on to become the “pharmacy of the developing world” supplying medicines to other countries that lacked the capacity and resources to produce the drugs themselves and pay the prices demanded by pharma MNCs.
AIDS treatment is one of the most important illustrations of the benefits of encouraging generics competition. It was only with the arrival of competitor generic antiretrovirals on the market in 2001 that prices started to decline significantly from $14,349 to $350 for first-line AIDS treatment. Originator drug companies, too, agreed to a reduction in prices. Today, first-line AIDS treatment is available for as little as $99 per patient per year—140 times lower than the price charged by pharma MNCs in 2001. This price cut saved millions of lives of people living with HIV/AIDS.
Patents have a major impact on the prices of drugs, by preventing competition. Following the implementation of the TRIPS agreement in India as of April 2005, Indian generic companies may no longer be able to provide the competition that drives prices down. From 2005 onwards, new drugs may be subject to at least 20 years of patent protection in India. The major consequence is that new drugs will be expensive and out of reach for the majority of Indians and those living in developing countries—even though the drugs may be needed urgently. Patients needing to switch to newer treatment will bear the brunt of unaffordable pricing. This is all the more significant as resistance to current HIV/AIDS and tuberculosis treatment is a growing problem across the world.
A 4 February story in Mint had quoted the Swiss pharma company Novartis as saying that the move (compulsory licensing) was unjustified in the absence of an emergency for which compulsory licensing is designed. This is an incorrect reading of India’s patent law and certainly not a requirement of international trade agreements. The Indian Parliament, in the revised Patents Act, included progressive and comprehensive provisions authorizing generics production despite the fact that a patent has been issued on a particular drug.
Compulsory licences can be issued to generic producers if patented drugs are not available or affordable or if countries that lack production capacity order drugs from India. The government can equally notify drugs on which compulsory licences need to be issued for public non-commercial use and government use. And, of course, they can be issued in situations of national emergency or extreme urgency. The Novartis contention that a compulsory licence is reserved for an emergency is thus inaccurate, and certainly not required by domestic or international trade law.
Besides, the assessment of whether a compulsory licence is needed or not, should be made by the Indian Patent Office in consultation with patient groups, public health experts and the health ministry.
Circumstances requiring the issuance of compulsory licences in India and other developing countries may vary, ranging from well-recognized public health crises of HIV/AIDS and tuberculosis to widespread chronic illnesses such as cancer, heart disease, diabetes and asthma. Without discrimination, compulsory licensing can address problems of access to affordable quality drugs, diagnostics and vaccines for a range of illnesses.
It is, therefore, evident that access to essential medicines for millions of people in India and abroad in the coming years will depend on the Indian government’s decisions. India through its legislation is in a unique position of global responsibility. It can make affordable generic medicines available to the world in the event that patent holders choose profits over patients.
For that the government should look beyond the false perspective that compulsory licensing is only for extraordinary emergencies, and instead do more in overcoming availability shortfalls and pricing barriers by encouraging generics production. India’s Patents Act allows it to implement a progressive compulsory licensing policy in full accordance with international trade rules.
Public interest groups, other developing countries and, most importantly, people across the world will applaud India’s decision to continue its long-standing tradition of placing patients before patents.
Johannes van de Weerd is director of MSF–Campaign for Access to Essential Medicines and Leena Menghaney is a lawyer working with it. Comments are welcome at firstname.lastname@example.org