The pharmaceutical industry involves not only manufacturing and distribution but drug discovery, Research & Development (“R&D”), planning, mapping and pricing of lifesaving medications. Intellectual property rights (“IPR”) in pharma consist of patents, trademarks, copyright, trade designs and trade secrets, which help tremendously in getting these medicines on the market. The interface between the pharmaceutical industry and IPR helps innovators protect inventions and get exclusive trade monopolies and monetary rewards. India has emerged as a global leader in the production and export of generic medicines and lifesaving vaccines all over the world. The involvement of various IPR laws plays a crucial role in boosting growth and development in this field.
Background & Governing Rules
The Indian legislation dates quite back with respect to the pharmaceutical industry, but the laws were stagnant and not compatible with the rampant industrialization and globalization. The developed countries were the largest holders of the IPR, and it was important for the laws of the developing nations to be in accordance with trade purposes. In 1857, the first legislation for the Indian patent system began under British rule. After multiple recommendations and revisions, the Patent Act of 2005 came into force after amendments in 1950, 1970 and 2005, respectively. The 2005 amendment of the Patent Act after the TRIPS agreement has made the system harmonious with international standards.
Other important legislation governing intellectual property in the pharmaceutical industry includes the Copyright Amendment Act, 2012, the Trade Marks Act, 1999 and the application of common law for trade secrets. The Drugs and Cosmetics (“D&C”) Act, 1940, was implemented for the regulation of the manufacture, import and distribution of the medicines. The Central Drug Standard Control Organization (CDSCO) was established as India’s main regulatory body under the D&C Act. Other significant authorities for safeguarding are the Ministry of Health and Family Welfare, the Indian Council for Medical Research, National Pharmaceutical Pricing Authority, etc.
In India, a patent is an exclusive right for any invention for a limited time of 20 years. It grants the patentee, exclusive rights over the manufacturing, import, export, usage, sale and advertisement of the product for the term of the patent. The expiration of the patent leads the invention to enter the public domain, becoming freely available for public use. Trademarks and copyrights help protect consumers from infringement and give them sole ownership over the medicine to protect them from dubious purchases. Trade secrets are integral to the privacy and protection of information related to the manufacturing process, test data, commercial and personal data of patients, etc.
TRIPS Agreement & The Pharma Market
To manage the trade disputes and maintain flexibility, India became a signatory to the Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) agreement, an international legal agreement between the World Trade Organization (“WTO”) member nations, in 2005. It aims to establish international minimum standards for IPR protection, allowing members to adopt regimes stricter than required. The Doha Declaration, 2001 on TRIPS advocates for flexibilities in favour of public health, access to medicine and encouraging innovation. Flexibilities offered by TRIPS include compulsory licenses, the exclusion of new forms of known drugs from patent protection, parallel importation, etc.
Post-TRIPS growth in Indian Pharma has reached an incredibly high level, resulting in the moniker ‘pharmacy of the world’ commanding close to 20% of the global pharma supply chain. As a result of such high demand in the generic drug market, pharma companies such as CIPLA, Dr. Reddy’s, Sun Pharmaceutical, Natco Pharma, etc. have emerged as key manufacturers and distributors. The supply chain of generic medicines has especially proven the test of time during the COVID pandemic as a result of parallel importation under TRIPS. Statistically, the Indian market has not only been self-sufficient but has also boosted the economy through the export of medicines.
Challenges For The Indian Healthcare System
Despite having a strong pharmaceutical industry, India struggles to provide affordable healthcare and essential medicines to its poor and marginalised populations due to several factors. Chief among these is the high cost of patented medicines, which are priced exorbitantly to recover the expenses incurred in their R&D and manufacturing by the owning companies. As observed in the case of Bayer Corporation v. Natco Pharma the Court granted a compulsory license to Natco Pharma Ltd. under section 84 of the Patent Act, 1970. Comparing the price point, accessibility and fulfilment of the public demand by Natco Pharma, a generic medicines manufacturer was awarded a compulsory license for the patented, expensive drug ‘Nexavar’. The foreign corporations want to continue their monopoly in the market, so an application for a new patent is sought with a minor change in the composition of the original drug. This practice is called evergreening. It prevents the drug from coming into the public domain and becoming accessible. As per the historic decisions given in Novartis v. UOI, the Supreme Court defined the scope of Sec 3(d) of the Patent Act 1970, which prohibits the evergreening of patents.
Conclusion
There was a quintessential need for IPR in the Indian pharmaceutical industry to regulate and foster its growth. It is essential for the IPR laws to be uniform and up to date to compete in the global economy. The implementation of TRIPS has yielded exceptional results for the pharma industry. However, India must maintain a delicate balance between fostering innovation and ensuring access to medicines. With a robust IPR regime, India will be better equipped to address these challenges while maintaining its status as the ‘pharmacy of the world’.
Authors: Malabika Boruah & Aishee Choudhury