The Department of Industrial Policy and Promotion (Dipp) has started a discussion on various compulsory licensing (CL) provisions enshrined under India’s intellectual property laws.
The move is significant in the backdrop of increasing acquisition of domestic pharmaceutical companies by foreign players and the concerns expressed by the Parliamentary panel on health over the availability of life-saving medicines at affordable prices in its report early this month, officials said.
Using CL, the government can allow third parties (other than the patent holder) to produce and market a patented product or process without the consent of the patent owner. This mechanism enables timely intervention by the government to achieve an equilibrium between two objectives — rewarding inventions and, if required, making these available to the public during the term of the patent.
In a discussion paper released today, Dipp sought stakeholders’ views on the scope of CL provisions to know if new guidelines were necessary to develop a predictable environment for such measures.
| MAIN ISSUES |
| * Should CLs be confined to public health emergencies? |
| * Should government be the sole distributor of drugs made under a CL? |
| * Should CLs be issued on the basis of anti competition law? |
| * Should working of a patent in the territory of India be interpreted to mean that it should be made in India? |
| * What should be the basis for royalty payments to compensate for CLs? |
For instance, the paper notes that despite the presence of about 2–2.5 million cancer patients in the country, the cancer medicine market is estimated to be only Rs 150 crore and not Rs 5,000 crore, a conservative estimate of the average annual cost of anti-cancer medicine per patient as Rs 25,000. The paper attributes this to the high price of cancer medicines and consequent low demand. It also wants to know if it is a fit case for issue of CL under the Indian Patents Act.
The discussion paper also talks about the possibilities of issuing CL under the competition law if the company’s dominant position is affecting the availability of medicines.
An attempt has also been made to define a “working patent”. While some countries define this as the patent protection given to medicines manufactured in the country, others consider a patent as “working” if the medicine is made available in the country, though imported.
Dipp has also sought views on whether publicly-funded Indian research organisations should stipulate (while selling/ transferring patents to Indian private sector companies) that the ownership of patents will revert to these organisations in case the ownership of those companies passes on to foreign hands.
The department wants the stakeholder comments to reach by September 30. The Indian Pharmaceutical Alliance, the industrial association representing leading domestic drug firms, said it would respond after studying the discussion paper.
After the Doha Declaration on the TRIPS agreement and Public Health of the World Trade Organization, about 52 countries have issued CLs. These include Brazil (2007 for an anti-AIDS drug); Thailand (2006 and 2007 for anti AIDS drugs), Malaysia (2003 for anti-AIDS drugs), South Africa (anti-AIDS drug) Kenya (voluntary licences issued in 2004 after threat of CL), and most recently Ecuador (April 2010 for an anti-AIDS drug).
Since TRIPS does not stipulate the grounds under which CLs can be issued, countries have adopted different procedures for different circumstances. The Dipp attempt is to prepare an Indian framework for CL for use in emergency situations.
