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The advent of patent raj

By Ammu Joseph

The third amendment to the Indian Patents Act, recently passed by Parliament, is likely to adversely affect the availability, accessibility and affordability of medicines -- three important components of people's right to health

"We urge that before the Draft Bill is made into law, it must be altered, taking advantage of the leeway that already existed and which has been somewhat increased by Doha, to protect the interests of the Indian people against the MNCs."

The Fourth People's Commission on Review of Legislations Amending Patents Act, 1970, October 2004

 The fate of millions of people in India, as well as other parts of Asia and Africa, hangs in the balance as India gets set to amend its legislation concerning patents for the third time in five years, in keeping with its commitments under the global agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The latest amendment, sought to be passed during the ongoing winter session of Parliament, is being vociferously opposed by health advocates both in India and overseas, with demonstrations in Paris, Delhi and Bangalore in the first week of December and more protests expected to follow.

According to public interest groups working on health issues, if the pending Bill is passed in its present form, India would be trading away its own right to protect public health, as well as the rights of people here and elsewhere who need access to low-cost and good quality generic medicines. Unfortunately, they point out, governments tend to view patents as a narrow trade issue concerning the often conflicting claims and interests of local and global pharmaceutical companies rather than as the broader issue concerning public health that it actually is.

According to health advocates, the product patent regime that the Bill seeks to introduce in India has serious ramifications for citizens. Under the circumstances, the government ought to consult public interest groups and individuals on how to ensure accessibility and availability of medicines even while complying with the country's obligations as a member of the World Trade Organisation (WTO). In fact, the public, as an affected party, has every right to be consulted and heard on a subject so directly related to its health and welfare.

Instead, the Group of Ministers set up in August to examine the implications of the Bill decided not to invite comments from civil society on what could be a matter of life and death for many. According to health activists, the process has been so secretive that even medical professionals have only unofficial information that the provisions in the present draft are identical to the Bill tabled by the previous government in Parliament in December 2003 (which lapsed due to the dissolution of the Lok Sabha prior to the general election). To make matters worse, some reports suggest that the government may even issue an ordinance to make the amendment a reality without the inconvenience of a legislative debate, let alone a public one.

Health advocates believe that the prices of drugs required for the treatment of many common diseases could shoot up if the Patent (Amendment) Bill, 2004 becomes law in its current form. Such a development would potentially affect the large numbers of people suffering from a wide range of illnesses, including life-threatening and chronic conditions, such as diabetes and hypoglycaemia, hypertension and coronary heart disease, asthma and respiratory tract infections, schizophrenia and depression, arthritis and spondylitis, urinary tract infection and HIV infection, and various forms of cancer.

This is because the relatively low-cost, locally manufactured generic drugs that are currently available to patients here may have to be withdrawn from the market when the patent applications pending for several medicines used in the treatment of these and other ailments are granted, as they are likely to be, under the new legislation.

The repercussions are likely to be felt in other parts of the world too, because India plays a unique role in global access to medicines as the world's chief exporter of cheap generic drugs - primarily to poor nations in Africa and Asia that have no pharmaceutical capability of their own. In fact, the demonstration in front of the Indian embassy in Paris on December 6 called specific attention to the fact that the survival of millions of indigent people with HIV in Africa and Asia rests on India's continued ability to make and export cheap, generic versions of new, effective treatments.

The Affordable Medicines and Treatment Campaign (AMTC), a coalition of civil society and non-governmental organisations, patients' groups, healthcare providers and concerned individuals working towards the sustained accessibility and affordability of medicines and treatment in India, has written to the prime minister as well as the National Human Rights Commission (NHRC), seeking their intervention to ensure that the Bill, which has grave implications for public health, is not passed without due deliberation and discussion.

Health advocates point out that so far much of the debate around these issues has revolved around competition between indigenous and multinational pharmaceutical companies, and their respective rights to manufacture drugs on the one hand, and enjoy the fruits of their intellectual labour as well as the returns on their investment in research and development, on the other. They believe it is time citizens became aware of the sword of Damocles hanging over their heads and got involved in protecting their fundamental right to health and healthcare, which is critically dependent upon access to affordable medicines.

The controversial third amendment to the Indian Patents Act, 1970 relates to India's obligations under the TRIPS agreement, adopted in 1994 as one of a package of agreements that WTO member-states must adhere to. Under the agreement, developing countries like India have to introduce patent protection for pharmaceutical and agro-chemical products by January 1, 2005.

The Indian patent law has already been amended twice - in 1999 and 2002 - to comply with TRIPS. Thanks to earlier amendments, the term of patent protection has been extended from seven to 20 years and Exclusive Marketing Rights (EMR) are available for drugs and agro-chemicals, allowing manufacturers a monopoly over products even before their patent applications are approved.

The primary purpose of the present Bill is to introduce product patents, as required by TRIPS, in the fields of food, chemicals and pharmaceuticals. At present Indian law provides patent protection for processes - rather than products -- in the pharmaceutical and food sectors. A process patent gives the owner exclusive right over the manufacturing process, not the product itself. In other words, anyone can make and sell a particular product as long as they use a different process to produce it. On the other hand, a product patent prevents others from manufacturing, selling, distributing or importing the patented product - even versions produced through different processes -- without the authorisation of the patent holder.

Thanks to the process patent regime that has prevailed so far, and the competition that it has allowed, not only has the Indian pharmaceutical industry grown at a phenomenal rate, but the prices of medicines in the country are among the lowest in the world (even though certain recent developments in drug policy have already driven the cost of several drugs up to unprecedented levels). With the introduction of a product patent regime, patent owners will be able to monopolise the market for 20 years and, in the absence of competition, get away with exorbitant prices. Both accessibility and affordability of drugs will be reduced as a result, with high prices putting many medicines out of the reach of the majority of Indians.

As an example of what can happen when monopolies are allowed in the pharmaceutical sector, the AMTC cites the case of a drug used in the treatment of patients suffering from Chronic Myeloid Leukaemia (CML). The generic version of the drug has been available to CML patients in India at Rs 9,000-12,000 per month. The government has now granted EMR to Novartis AG for their version of the drug, Gleevec, as a transitional arrangement while their product patent application is pending. If the EMR is enforced, generic versions of the drug will have to be withdrawn from the market. As a result, the overwhelming majority of Indians suffering from CML will have to do without the life-saving medicine because the price of Gleevec is astronomical, at Rs 1,20,000 per month. The one ray of hope on this front is that both the pharmaceutical industry and civil society groups have challenged the grant of EMR on Gleevec in the Supreme Court of India.

Health activists allege that the Bill in its present form does not even use the minimal flexibility available within TRIPS, especially in the context of the 2001 Doha Declaration on Public Health. Despite several ambiguities and deficiencies, the latter does state that the agreement should be interpreted and implemented in the light of WTO member countries' right to protect public health and promote access to medicines for all. According to them, by not taking advantage of available options with regard to medicines, seeds, pesticides and other agro-chemicals, the Bill compromises the Indian public's right to food as well as health.

One of the arguments often put forward to suggest that product patents will not push the cost of medicines up is that "drugs used for common ailments are already in the generic category, having gone off patents years ago." This is misleading because new and better drugs required for the effective treatment of many illnesses are constantly being produced.

At present locally manufactured versions of even new drugs are available in India for a fraction of their cost in most other parts of the world. Take the example of "atypical anti-psychotic" drugs, used in the treatment of schizophrenia, a common and life-long mental illness. Since there is at present little price difference between old and new drugs in this category, and since the prices of locally produced brands are far lower than those of multinational companies, even public hospitals such as the National Institute for Mental Health and Neurosciences in Bangalore are increasingly prescribing the latter, which have fewer side-effects and ensure better quality of life. If the patent application currently pending for one of these drugs - Olanzapine -- is successful, cheaper local versions of it will no longer be available to patients here. No doubt the other drugs will soon follow suit.

The financial implications of sharp increases in the cost of medicines are particularly serious in the Indian context since patients here, and their families, have to shoulder the entire burden of medical expenses, including purchase of drugs, in the absence of an effective public health system and universal, let alone public, health insurance.

To make matters worse, the Bill seems to provide a loophole for pharmaceutical companies to keep products patented in perpetuity by proposing grant of patents for existing drugs for which a 'new use' has been found -- even though there is no obligation under TRIPS to issue patents for different uses and/or dosages of known medicines. Health activists believe that this provision will extend patent protection to drugs even after the 20-year period, for less than valid reasons. A study showing that only 35% of the 1,035 new drugs approved by the US regulatory authority during 1989-2000 contains a new chemical entity suggests that this is not an imaginary threat. According to health advocates, even the official committee that looked into the regulation of the pharmaceutical sector, headed by Dr R A Mashelkar, had recommended just last year that patents should be given only to new chemical molecules or entities, so as to limit the number of patent protected drugs.

Another disturbing aspect of the Bill is that it apparently proposes to do away with the 'pre-grant opposition procedure', an important mechanism that enables civil society to block frivolous patents. According to health activists, with nearly 5,000 patent applications for pharmaceutical products currently pending in the mailbox (a majority filed by foreign corporations and individuals), public scrutiny is essential to ensure that only necessary, useful drugs are granted patents.

The Bill's provisions relating to compulsory licenses - an important mechanism within TRIPS that allows countries to get around patent monopolies under certain, specified circumstances - are also being opposed by health activists, who believe that a complete revamp of the compulsory license system is called for in the interest of public health. According to them, the Bill has not even properly incorporated the August 30 decision of the TRIPS General Council, which permits the grant of compulsory licenses for export purposes to countries with non-existent or insufficient manufacturing capacity in the pharmaceutical sector.

The significance of compulsory license becomes clear in the context of treatment for people living with HIV/AIDS (PLHA). As recently as four years ago, millions of PLHA across the world, and in India, could not afford the cost of treatment with antiretroviral (ARV) drugs, known to prolong the lives of HIV+ people. At that time prices ranged between US$ 10,000 and 12,000 (approximately Rs 4,50,000-5,40,000) per person per annum. Prices began falling when Indian manufacturers introduced generic versions of ARV drugs until, by 2003, the annual cost per person had come down to US$ 140 (about Rs 6,300). Such a dramatic decrease was possible because of India's process patent regime. Under the new regime, not only are prices of existing medicines likely to go up but the new drugs that HIV, by its very nature, necessitates will be inaccessible to millions of patients across the world.

The conclusions of a working paper by the US-based National Bureau of Economic Research (NBER) on the effects of extending intellectual property rights protection to developing countries, based on a case study of the Indian pharmaceutical market - focussing specifically on a particular type of antibiotic - is also worth noting in this context. The authors suggest that the introduction of product patents, leading to the withdrawal of currently available domestic drugs from the market, will cost both the economy and the consumer dearly, especially in the absence of compulsory licensing and/or price regulation.

Compulsory licenses will become all the more important for the promotion of public health after the introduction of a product patent regime through the pending Bill. Yet the Bill reportedly does little to strengthen this mechanism and ensure that it can be used at least to the extent envisaged in the Doha Declaration. This seems particularly unwise in view of the fact that both governments and pharmaceutical companies in industrialised countries (which currently hold 97% of the world's patents) have in the past used legal action, political pressure and economic sanctions to oppose measures like compulsory licenses in order to protect their profits.

Health activists point to a number of legal documents, both international and national, including the International Covenant on Economic Social and Cultural Rights and India's Protection of Human Rights Act, 1993, to argue that the country must not trade away its right, and duty, to protect and promote public health through this Bill. A number of other landmark documents relating to health, including international ones such as the 1978 Alma Ata Declaration and the 2000 People's Charter for Health, as well as domestic ones like the 1946 report of the Health Survey and Development Committee headed by Sir Joseph Bhore, and the 1983 National Health Policy recognise the provision of essential drugs at affordable cost as a key ingredient of a humane and just health policy.

It is important to note, in this context, that the October 2004 report of the Fourth People's Commission on Review of Legislations Amending Patents Act, 1970, chaired by former Prime Minister I K Gujral, and made up of several eminent and knowledgeable members, not only echoes the concerns of public interest groups about the Bill but goes beyond the pending legislation to register its serious misgivings about the TRIPS agreement itself.

While suggesting "minimal necessary changes in the Patent (Amendment) Bill ... so that while the proposed legislation remains largely within the parameters of the TRIPS Agreement it does not simply become an instrument to promote the monopoly interests of the MNCs," the report also points out that "the need for a thoroughgoing review of TRIPS ... cannot be overemphasised. The struggle against the unequal treaty of TRIPS needs to be carried forward at the national and at the multilateral level. To this end, a full-scale national debate is called for."

Yet that seems to be just what the government is keen on avoiding unless it is forcefully reminded of its commitment under the ruling coalition's Common Minimum Programme "to take all steps to ensure availability of life-saving drugs at reasonable prices."

(Ammu Joseph is an independent journalist and author based in Bangalore, India, and writing primarily on issues relating to gender, children, human development and the media. Contact : This email address is being protected from spambots. You need JavaScript enabled to view it.)

InfoChange News & Features, December 2004