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Patenting of Medicines: Access To Affordable Medicines

Written by: Gaurav Wahie and Siddhartha Bhardwaj, National Law Institute University - Bhopal
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The rising prices of medicines and the tragedy of millions of AIDS victims in poor countries, who cannot pay for the medicines they need to stabilize the disease, have aroused widespread concern and put on the agenda a debate on the generally high cost of these drugs and medicines. The other important issue under discussion is that of equal opportunities for both developed and developing countries to obtain the medicines that their populations need in order to fight a range of diseases, among which the AIDS epidemic in sub-Saharan Africa constitutes a real tragedy. The debate received a new lease of life in November 2001, during the Fourth World Trade Organization Ministerial Conference held in Doha (Qatar). There the right of countries to take measures to protect public health and promote access to medicines was recognized.

A global health crisis is at hand. Millions of people die each year from infectious diseases that are treatable and preventable in many cases. The death toll is unacceptably high in developing countries, where many die because they do not have access to effective and affordable medicines. The public outrage over the high prices of HIV/AIDS medicines has also raised public awareness on the problem of access to medicines and the role of patents in increasing the prices of medicines. Patents on pharmaceutical products and processes provide drug companies with monopolies over the production and marketing of medicines, allowing them to fix prices at high rates to maximize profits.

The WTO-TRIPs Agreement has come under criticism for facilitating the extension of these patent rights around the world. The obligation under TRIPS to implement high standards of intellectual property protection, including the 20-year protection for patent rights and the obligation to recognize product and process patents, will effectively eliminate competition from generic pharmaceutical producers and allow for increased prices of medicines beyond the reach of even more patients in the developing countries. Public criticism has been mounting, as are questions about the legitimacy of patents on life-saving medicines. This has led to calls for changes or amendment to the Agreement, which many feel is too heavily in favour of private rights and commercial interests, and against public interests. The process in the WTO TRIPS Council to have special discussions on TRIPS and Public Health (as a result of requests from developing country Members) provides an opportunity for WTO Members to consider the means of addressing the negative impacts of the TRIPS Agreement on public health and access to medicines.

This paper discusses some issues relevant to the discussion on the TRIPS Agreement, patents and access to affordable medicines. This paper has been divided into five parts, namely:
Part I - Provides a background to the public concerns on the worldwide health crisis, the TRIPS Agreement and patents on drugs, and the process of the Special Discussion on patents and medicines in the TRIPS Council.
Part II - Examines the effect of patents and monopolies on the prices of medicines.

Part III - Looks at some of the limitations on exclusive property rights of patent holders, specifically provided for within the TRIPS Agreement. These include compulsory licensing and parallel imports, which can be used to curb anti-competitive practices and abuses of intellectual property rights. Compulsory licences and parallel imports are important tools in the context of protection public health and promoting access to affordable medicines.

Part IV - Examines the proposal for a global tiered-pricing or differential pricing system, first mooted by the EU and currently under discussion in WHO and WTO.

Part V - Deals with the Indian scenario.
Part VI - Conclusion

Health Crisis In Developing Countries

About 14 million people die each year from infectious diseases, many of which preventable or treatable, such as acute respiratory infections, diarrhoeal diseases, malaria and tuberculosis. Up to 45% of deaths in Africa and Southeast Asia are thought to be due to an infectious disease . The death toll is unacceptably high in developing countries, even as health indicators show improvements in many countries of the world. This health crisis is caused by several inter-linked factors - poverty, lack of access to health services, water and sanitation being some of them. However, a vital factor in the promotion of public health - and very often, a matter of life and death - is the supply of effective and affordable medicines and peoples' access to such medicines and treatments.
In the case of HIV/AIDS, a human tragedy of mind-boggling dimensions is now at hand. Of the 36 million people with HIV/AIDS in the world, 25 million of them are in sub-Saharan Africa. In certain African countries, more than a quarter of the adult population has HIV, and life expectancy is projected to decline dramatically in the next ten years. For example, life expectancy in South Africa is projected to fall by 20 years by the year 2010 due to the spread of HIV/AIDS. The HIV/AIDS epidemic has put the spotlight on the issue of affordability of essential medicines. In industrialized countries, AIDS deaths have been dramatically reduced partly because of the availability of life-saving medicines. However, a year's worth of the standard treatment of three-antiretroviral combination is estimated at US$10,000-15,000 . This price level puts such treatment out of reach of most people in the developing world, where 95% of the people with HIV are from developing or under developed countries.

Public interest worldwide has been aroused by the health crises in the developing countries, caused by the exorbitant prices of drug treatments. HIV/AIDS medicines are a high profile example, but there are also many cases of medicines for other life-threatening diseases being made unaffordable, simply because companies owning or controlling patents on the medicines have been able to block competition from other firms and other products. Prices of patented medicines are very much linked to the monopolies enjoyed by pharmaceutical companies, protected and maintained by patent rights.

The Trips Agreement and Patents on Drugs

Patent rights are being extended around the world through the provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Proponents of the TRIPS Agreement argue that patents and other intellectual property rights are essential for promoting research and development (R&D), as well as, stimulating innovation. Yet, there has been scant evidence that the introduction of TRIPS-compliant standards of IPR protection has promoted transfer of technology, R&D, or innovation in developing countries.

The intensive use of the patent system by corporations is intended to protect their competitive edge and markets, by keeping out their competitors. This strategic use of the patent system has the effect of stifling R&D, preventing innovation and restricting information flows in the developing countries. Patent protection is sought to be justified on grounds that the negative effect of monopoly rights will be outweighed by the incentive for creative activity, innovation and research and development. This trade-off is beginning to be questioned because the price and competition costs of strict patent protection have been very high. In the health and pharmaceuticals sector, this trade-off often comes with life or death consequences.

The implementation of the TRIPS Agreement will give rise to factors that can put access to medicines out of reach for millions of people in the developing world. The TRIPS Agreement obliges WTO Members to adopt and enforce high standards of intellectual property rights protection, which were derived from the standards used in developed countries. Conforming to TRIPS - by recognising and strengthening protection of intellectual property rights over pharmaceutical products and processes - will cause problems for developing countries. Implementation of the TRIPS Agreement may lead to high drug prices, low access to medicines and a weakening of pharmaceutical industries in the developing countries.

It is feared that patent protection for pharmaceutical products and processes will have the effect of reducing or eliminating competition from generic production of medicines. There are about 10 industrialised countries with the pharmaceutical industry and research base, capable of developing new chemical entities or new medicines. The multinational drug companies in these countries own most of the pharmaceutical technologies and products through patents.
The minimum term of 20-year patent protection required by TRIPS effectively allows a pharmaceutical company a monopoly over the production, marketing and pricing of patent protected medicines. It will be able to keep the price of the drug high during the protection period, free from competition. By virtue of TRIPS protection, no generic equivalent can come into the market until expiry of the 20 years, denying patients cheaper alternatives.

Domestic manufacturing of pharmaceutical products in developing countries will come to a standstill. Developing countries are able to produce new medicines by a process of reverse engineering; that is, researchers in developing countries may develop a new process different from the process invented (and protected by patent) to manufacture the new medicine or chemical entity. Reverse engineering is possible only in countries where the patent law protects processes but not products. The TRIPS Agreement extends the scope of patent protection to both products and processes. It would therefore be possible to apply for patent rights over products for 20 years, and thereafter, further periods of 20 years each could be applied for products covered by patented processes. Some experts also caution that the 20-year protection can also be abused to extend the monopoly through process patents as well as patents on usage form, dosage form and combination form. In the US for example, patents have been taken on new combinations of drugs even when the product patent on the basic drug - the active ingredient - has long expired. Monopoly protection would be extended through minor changes to the existing medicines where the product patents have expired.

Developing country pharmaceutical producers will find themselves pushed out of the market, having to compete with the large MNCs. For the smaller producers in the developing world, which specialise and depend on manufacturing cheaper generic alternatives, this would no longer be possible - at least, until the expiry of the 20-year period. In some developing countries, domestic production capacity may never be developed.

The TRIPS Agreement further requires patents to be granted, regardless whether the products are imported or locally produced. The means that patent holders can merely import their product, without having to work the patent in the country granting the right. This will mean that a MNC can supply global markets under the patent monopoly, exporting the finished product instead of transferring technology or making foreign direct investment. This rubbishes the argument of TRIPS proponents that strict patent regimes will increase the flow of technology and investment into developing countries.

TRIPS proponents and the pharmaceutical industry argue that patent protection is essential to ensure R&D for new drugs, but there has been little evidence to demonstrate that the patent system will ensure investment in R&D for diseases of the poor. Of the 1,223 new chemical entities developed in the 21-year period between 1975-1996, only 11 were for the treatment of tropical diseases. The last major new tuberculosis drug was developed 30 years ago, but tuberculosis remains a major cause of death in many developing countries. Furthermore, there is concern that R&D in the pharmaceutical sector is concentrated on products intended for the lucrative developed country markets. Hence, the increased investments for R&D on drugs for impotence, obesity and baldness, instead of R&D on new and more effective drugs for life-threatening or poverty-related "Third World diseases", including malaria and tuberculosis.

Civil society groups and NGOs have called for amendment of the TRIPS Agreement so as to ensure a proper balance between the protection of private rights and corporate interests, and the promotion of public interests in socio-economic, technological development of member countries, including that of public health. Public criticism is mounting, as are questions about the legitimacy of patents on life saving drugs and the global monopolies provided to pharmaceutical companies by such patents. There is increasing public opinion that the present model for intellectual property rights protection advocated by TRIPS is too heavily tilted in favour of private right holders and against the public interest. The public outrage over HIV/AIDS medicines has added fuel to the negative public perception about the IPR system and about the role of TRIPS.

All this is leading to a crisis of legitimacy for TRIPS. In the 6 years since its coming into force, there has been increasing evidence of many social and economic problems caused by the introduction of stricter intellectual property rights, as a result of the implementation of the TRIPS obligations.

Patents And Prices

Effects of Patents And Monopolies on Prices
Patents enable prices of medicines to be sold at levels that are artificially high due to the curbing of competition. When medicines are under patent protection, the patent holder has a monopoly on the production and sale of the product for a minimum period of 20 years, and is thus, able to exercise a monopoly in the pricing of the product.

A key factor in fixing the price of a particular medicine is the patent on it, because of the monopoly on the medicine enjoyed by the patent holder. Patent rights enable the patent owners to fix prices of medicines at high levels, and the effect of patents and monopolies on prices is demonstrated by data; which compare prices of patented or branded products, and those of generic producers; prices of the same product sold in different countries; and the prices of raw materials used in the production of medicines, in the open competitive market, and in transfer pricing practices of MNCs. Patent protection is the most effective tool for drug MNCs to keep out competition from generic producers and thus, maintain a monopoly control on the production, marketing and pricing of medicines.
Despite the clear need for developing countries to enable their people to have access to affordable medicines, a major and perhaps the most disturbing aspect of the crisis of patents and drugs is that obstacles have been, and are being put, in the way of developing countries seeking to make use of TRIPs provisions on compulsory licensing or parallel imports in order to buy or produce drugs at more affordable prices.

The case of access to affordable medicines has illustrated a disturbing aspect of TRIPs: that this Agreement has facilitated, and is continuing to facilitate, anti-competitive behaviour and the flow of trade in products at prices that are influenced or determined by monopolistic elements, which hinder trade at free-market prices. This runs counter to the trade-liberalisation principle of WTO.

The Trips Agreement And Access To Medicines: Compulsory License And Parallel Imports
For a number of developing countries, the interpretation and implementation of the TRIPS Agreement requires resources and capacity in excess of those already existing. Implementation of the TRIPS Agreement represents a very significant extension in scope and duration of patent protection for developing countries, many of which had not hitherto provided patent protection for pharmaceutical products. Experts from developing and developed countries fear substantial increases in drug prices in the countries that had not granted such patents in the past.

The TRIPS Agreement, in its present form, contains certain provisions that can be used to limit patent rights. These limitations or exceptions are to be effected through national legislation, in order to curb abuses of intellectual property rights and anti-competitive practices, and generally, to offset the negative impact of patent monopolies.

Two of the most important measures include the right of government to grant compulsory licences and the application of the principle of exhaustion of intellectual property rights, which allows for parallel importation of patented products. There are other important exceptions to patent rights provided for in the TRIPS Agreement, including exceptions for experimental use which are relevant in the discussion on pharmaceutical products. This part of the paper focuses on the use of compulsory licensing and parallel importation measures.

Compulsory Licensing

The basic approach of the patents law is to strike a balance between the interests of an inventor and those of the consumers and to ensure that the benefits of the new technological developments reach the people, and not exploited by the inventor alone for the monopoly control.

Compulsory licensing enables a government to issue a licence to a third party, whether a private company or government agency, for the right to use or exploit a patent without the patent holder's consent. Compulsory licensees generally compensate the patent holder through payment of remuneration.

Many developed countries make available some forms of compulsory licences, either in their patent laws or under the specific sector legislation. Such licences are regarded as a crucial element in their patent laws and are mechanisms used to promote competition and prevent abuse of patent rights and monopolies. The mere existence of a legal provision may be enough to persuade patent holders on the need to act reasonably in cases of requests for voluntary licenses, whilst strengthening the bargaining position of potential licensees. In the context of pharmaceutical patents, such licences constitute an important tool to promote competition and increase the affordability of drugs, without depriving the patent holder of reasonable compensation.

Provisions relating to compulsory licences or "non-voluntary licences" are contained in Article 31 of the TRIPS Agreement. Article 31 makes specific mention of five possible grounds for the granting of compulsory licenses; that is, in cases of refusal to deal, in situations of national emergency and extreme urgency, to remedy anti-competitive practices, in cases of public non-commercial use and to facilitate the use of dependent patents. Questions have arisen as to whether WTO Members may issue compulsory licences on other grounds not specified within the TRIPS Agreement.

On this point, reference should be made to the provisions of Paris Convention related to compulsory licences, which have been incorporated into TRIPS Agreement. The Paris Convention allows countries a wide discretion to issue compulsory licences "to prevent the abuse which might result from the exercise exclusive rights conferred by the patent". During the Uruguay Round negotiations, efforts were made by a number of developed countries to limit the freedom available to countries under the Paris Convention in the grant of compulsory licences. However, these efforts failed due to strong resistance from developing countries. The compromise was to leave open the grounds on which such licences could be granted.

The Paris Convention on the Protection of Industrial Property recognises the right to grant compulsory licensing on the ground of failure to work or insufficient working (Article 5A). This provision of the Paris Convention is incorporated into the TRIPS Agreement. On this basis, failure to work, or insufficient working of, a patent should be a legitimate ground for the issuance of compulsory licences. From a developing country perspective, the local working of a patent is desirable, apart from its being necessary for making products available and affordable, but also for technology transfer opportunities and reduced foreign exchange expenditure caused by purchasing imports. However, the developed countries, EU and the US, in particular have tried to press for a very narrow interpretation of the TRIPS Agreement, one which seeks to prohibit the grant of compulsory licences on the ground of non-working of a patent.

Where a developing country finds that it is in the public interest to encourage domestic production of patented medicines, for the purposes of controlling and preventing diseases, and in the interests of availability and affordability, compulsory licensing will be a vital policy tool.

The compulsory licence provision in the TRIPS Agreement would be meaningless for the rest of developing country Members of the WTO, which do not have the domestic manufacturing capacity. This raises the question of whether these countries would be able to grant a compulsory licence for the importation of the patented medicine product. This may be, in fact, the only viable means to use a compulsory license in cases where domestic manufacturing capacity does not exist, or the size of the local market does not justify local manufacturing, or where there is a need to promptly address and emergency situation. The compulsory licensee may import from a compulsory licensee, or from other sources, in another country.

There is a further question of whether a compulsory licensee producing a patented drug could be allowed to export the patented product. The TRIPS Agreement stipulates that a compulsory licence must be "predominantly" for the supply of the domestic market. Therefore, exports are possible, although they should not constitute the main activity of the licensee with regard to the licensed product. In cases when a compulsory licence has been granted to remedy anti-competitive conduct, this limitation need not apply. This is the practice in the US in cases of compulsory licences granted under anti-trust legislation.

Since Article 31 does not lay down an exhaustive list of grounds for the issuance of licences, Member should be free to determine further grounds for the issuance of compulsory licenses. Therefore, the TRIPS Agreement does not limit the right of countries to establish compulsory licences on other grounds not explicitly mentioned.

Developed countries have largely relied on compulsory licences, as a tool to limit exclusive rights and prevent or remedy abusive practices. Recent legislative changes in developed countries prove that compulsory licence system is still much in use. The grounds and conditions on which compulsory licences have been regulated and granted in developed countries illustrate the flexibility and potential of the compulsory licensing system to address a multiplicity of public interests and concerns.

Such evidence indicates that arguments - voiced by developed countries governments and industry - against compulsory licenses as a deviation from acceptable standards for intellectual property rights are not reflected in the policies actually applied in such countries. In so doing, they practise a double standard - denying developing countries the use of effective policy mechanisms that they themselves have used and continue to use.

In India, Chapter XVI (sections 82 to 95) deals with working of patents, compulsory licences and revocation. Section 82 defines "patented article" to include any article made by a patented process. Section 83 sets out general principles applicable to working of patented inventions and section 89, general purposes for granting compulsory licenses. Section 89 emphasises that the main purpose for which the patent is granted is to have the invention worked in the India to its advantage. The purpose is to encourage invention and to secure that the inventions are worked on a commercial scale and to the fullest extent that is reasonably practicable without much delay and that interests of persons working on an invention is not unfairly prejudiced. Section 84 deals with the grant of compulsory licences where a complain is made that the patent has been worked in such a manner as to satisfy the reasonable requirements of the public or that the patented invention is not available to the public at a reasonable price. Section 85 vests residuary power in the Controller to revoke a patent in the event of the invention not being worked to an adequate extent in the country or not being available to the public at a reasonable price notwithstanding the compulsory licensing provision. Section 87 deals with the procedure to be followed for granting a compulsory licence. Section 90 regulates the terms and conditions that may be imposed in respect of compulsory licence. Section 94 deals with the termination of compulsory licence.

With a view to securing the objects of the patent law system, the Controller has the power to grant any person interested who has made an application, a compulsory licence upon such terms as he may deem fit, if satisfied that:
1. the reasonable requirements of the public have not been satisfied, or
2. the patented invention is not worked in the country, or
3. that it is not available to the public at a reasonably affordable price.

Also under section 92 the Central Government can grant compulsory license after notification. The difference between section 84(4) and section 92 is that while in the former any interested person can apply, under section 92 only the Central Government has power to grant compulsory licence in case of national emergency.

Parallel Imports
Parallel imports involve the import and resale in a country, without the consent of the patent holder, of a patented product that was put on the market of the exporting country by the patent holder. The underlying concept for parallel imports is based on the principle of exhaustion of rights. This principle is premised on the fact that where the patent holder has been rewarded through the first sale or distribution of the product, he/she no longer has the right to control the use or resale of the product. It would also be in line with WTO's trade liberalisation objective that from the moment a product is marketed, the patent holder can no longer control its subsequent circulation.

Nothing in the TRIPS Agreement prohibits parallel importation. Specifically, Article 6 allows each member country the freedom to incorporate the principle of international exhaustion of rights - the underlying justification for parallel imports - in its national legislation. It further states that Members are not subject to the WTO dispute settlement system for disputes relating to exhaustion of rights.

Parallel imports are of particular importance for public health interests, since the pharmaceutical industry generally sets prices differently throughout the world for the same medicines. Parallel imports would prevent market segmentation and price discrimination by patent holders on a regional or international scale. Parallel importation of a patented medicine from a country where it is sold at a lower price will enable more patients in the importing country to gain access to the medicines. Such measure would also not prevent the patent owner from receiving remuneration for the patented invention in the country where the product is first sold. In this regard, parallel importation must be regarded as a legitimate measure, which WTO Members are permitted to adopt to protect public health and nutrition as is provided for in Article 8 of the TRIPS Agreement.

In order to avoid a possible discrimination complaint under Article 27.1 and benefit all sectors of the economy, it is recommended that parallel importing should be permitted within national legislation, for patented goods in all fields of technology, and not only for health-related inventions.

Developed countries and their corporations discourage parallel imports on the grounds that companies would then charge a single price worldwide - thus leading to an increase in the price that may otherwise be charged in low-income countries - were parallel importation to be implemented. This argument is a weak one, and available evidence provides contradictory proof, that in many developing countries, the prices of the same medicines are much higher than in developed countries.

Obstacles In The Use of Compulsory Licences And Parallel Importation

It is vital that the right of governments to use compulsory licences and parallel importation measures are upheld and respected. Such measures must also be capable of effective implementation.

These TRIPS provisions are coupled with numerous conditions, making them difficult to operationalise effectively and speedily. More significantly, although the TRIPS Agreement allows for these measures to be undertaken for the protection of public health, some developed countries have sought to give a narrow interpretation of the provisions relating to compulsory licences and parallel imports, with the purpose of restricting of scope of such measures. This situation has led to the perception that there is a lack of legal clarity or common understanding of the TRIPS provisions.

This situation has led to some unease and uncertainty on the part of developing country Members, who are now hesitant, or feel circumscribed in their ability, to undertake such measures in their national legislation.

Equally disturbing is the fact that some developed countries, in conjunction with their corporations and industry lobbies have been exerting political pressure on developing countries to prevent them from exercising their rights under TRIPS, and from enacting policies and laws on compulsory licensing and parallel imports for HIV/AIDS drugs and other drugs.

It is therefore, necessary for the WTO Members to clarify and come to a common and agreed understanding of the TRIPS provisions. Compulsory licensing and parallel imports are clearly allowed within the TRIPS framework. Therefore, developing countries should be allowed the maximum flexibility in interpreting and implementing the TRIPS Agreement provisions, and should be allowed to do so, without fear of litigation or other pressures. It is vital that interpretations allow full flexibility for developing countries to exercise their rights to provide affordable medicines to their people, rather than interpretations that may restrict the scope and ability of developing country members to adopt measures to ensure access to medicines.

Differential or Tiered Pricing
In response to the growing controversy over the issue of access to medicines, the European Commission has proposed a "tiered pricing" system that would work to offer lower drug prices to developing countries, whilst maintaining prices in the developed countries. The concept of differential pricing has also been taken up by the WHO and WTO Secretariats.

Whilst these initiatives signal an effort to respond to the public demands that the issue be tackled, there must also be caution in adopting the differential or tiered pricing approach. Lessons should be taken from the UNAIDS Accelerating Access Initiative which involves industry discounts on AIDS drugs. The process has been described as "slow, grudging and piecemeal". After almost a year since the announcement of the initiative, the medicines are still too expensive for the majority of the AIDS patients.

The fact that the pharmaceutical industry favours the differential pricing concept has also raised questions about a hidden agenda - to offer the differential pricing scheme in exchange for restrictions on countries' rights to adopt compulsory licensing or parallel importation measures. The EU, in proposing the differential pricing system has also raised the issue of the need for safeguards against the "leakage" of low-priced medicines destined for specific markets into the markets of developed countries.

It will be crucial for discussions or negotiations for such a system to be carried in an equitable, fair and transparent process, given the circumstances. Most importantly, a differential pricing scheme must not be offered as a substitute for countries' rights to adopt compulsory licensing or parallel importation laws and measures. The tiered pricing system must not result in conditions being imposed on participating countries that restrict such rights.

If an initiative on differential pricing is to be considered, it must be approached on a multilateral basis, and not on a country by country basis. It should not be limited either by place (the countries involved) or time (i.e. limited to only a number of years). It must be negotiated and have results that are transparent, that involve all countries (and certainly all WTO Members) in a fully participatory way; and it must also involve transparent prices, rules and regulations. The beneficiaries must include all developing countries, and not limited to only the poorest countries. Some life-saving medicines are priced beyond the reach of most of the world's population This requires dramatically reducing medicine prices to a level that is reasonably affordable to the patient so that the medicines will not simply cost less but will truly be affordable to the patients who need them.

Indian Scenario
Some of the amendments to the Patents Act required by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have just been adopted by Parliament. Among the many issues dealt with by the amendments, one of the most debated questions has been their impact in the health sector and more specifically on access to medicines. The debates are unlikely to subside with the adoption of the Bill. On the one hand, the amendments have already been attacked for not going far enough to allow compliance with the TRIPS Agreement. On the other hand, the amendments are fundamentally changing the 1970 Patents Act and are likely to negatively affect people's access to medicines.

Positive Impacts
To understand how significant the adopted amendments are concerning access to medicines, it is necessary to look back at the regime adopted in 1970. The law adopted then drastically restricted the rights of holders of medical patents to foster the availability of cheaper medicines. The patents legislation together with other measures such as price control have had significant positive impacts: Medicine prices have, for instance, decreased significantly since the 1960s compared internationally. Further, there is now a vibrant local generic pharmaceutical industry. In addition, some local companies have developed sufficient expertise to produce their own new medicines.

The TRIPS Agreement has imposed the wide-ranging changes that have just been adopted. The controversial nature of these amendments explains in fact why the Government was initially reluctant to accept TRIPS in the WTO context and why Parliament initially refused to adopt the first Patent Amendment Bill in 1995. The changes imposed by TRIPS on India include increasing the duration of all patents to 20 years, broadening the scope of patentability and the introduction by 2005 of product patents on medicines. These legislative modifications will eventually lead to higher medicine prices in India.

While the TRIPS Agreement lays down a number of precise standards and rules, it also includes a number of exceptions and qualifications. Over the years, the exceptions and qualifications have been largely ignored or sidestepped in most developing countries. Following increasing controversies concerning the impact of TRIPS in the health sector, the last WTO ministerial conference addressed the issue of health and adopted a Declaration on the TRIPS Agreement and Public Health (Doha Declaration). The Doha Declaration does not modify TRIPS but restates that member States are allowed to fully use the exceptions provided in the treaty to foster public health goals. In other words the Declaration gives countries like India further authority to fully use the exceptions and qualifications provided in TRIPS. The amendments just adopted by Parliament must be read in the context of the recently adopted Doha Declaration.

Two Main Trends
The new Patents Act is characterised by two main trends. On the one hand, it generally follows quite closely the requirements of the TRIPS Agreement. The amendments thus generally alter the balance between the interests of patent holders and the interests of society at large in favour of the former. The duration of patents in the health sector is, for instance, dramatically increased from seven to 20 years. The amendments also strike out an important provision of the Act seeking to oblige patent holders to manufacture their inventions in India.

On the other hand, the new Patents Act uses some of the exceptions and qualifications included in TRIPS to foster public health goals. It uses, for instance, the health-related exceptions in Sec. 3 of the Act which determines which inventions are not patentable. Some of the most interesting and most controversial new provisions are found in the chapter on compulsory licensing. While TRIPS generally imposes a stricter compulsory licensing regime than what was provided under the Patents Act, 1970, the amendments strive to make use of some of the possibilities opened by the Doha Declaration. The section of the compulsory licensing chapter (Sec. 83) which sets out the general principles applicable to compulsory licensing is particularly noteworthy. It specifically mentions that patents granted should not `impede protection of public health' and should not prohibit the Central Government from taking measures to protect public health. Further, it recalls that patents should be granted to make the benefits of the patented invention available at reasonably affordable prices to the public.
On the whole, the framework for compulsory licensing set out in Sec. 83 is quite progressive from the point of view of access to health. However, the most noteworthy feature of the principles set out is that they only inform the specific chapter on compulsory licensing. The Doha Declaration generally recognises member States' right to take measures to protect public health.

This is not limited to compulsory licenses but applies generally to patenting in the health sector. In other words, there is no reason why the principles enunciated at Sec. 83 should only apply at the level of the implementation of patents. It is noteworthy that while the amended Patents Act does not make innovative use of the leeway provided by the Doha Declaration beyond Sec. 83, some members of the Joint Parliamentary Committee on the Patents Bill did propose an exception to the uniform 20-year rule for medical patents. The fact that these progressive principles do not inform the whole Patents Act are indicative of the increasingly regressive nature of the debates concerning patents in the health sector. Indeed, while ten years ago the issue of patentability in the health sector was a subject of intense discussion, the amended Patents Act shifts the debate to the single issue of compulsory licensing, and thereby indirectly creates a situation where it will become extremely difficult to discuss broader issues in the future.

On the whole, the amended Patents Act is noteworthy for dismantling most of the specificities of the 1970 Act. The 1970 Act constituted a carefully crafted response to specific socio-economic challenges that has served India well over the past three decades. It is therefore surprising that the removal of exceptions meant to foster better access to medicines has happened without any revision of the underlying policy. In fact, the socio-economic needs are more or less the same as before as universal access to medicines has not been achieved. Further, while India's intellectual property obligations have changed with the TRIPS Agreement, its obligations in the field of the human right to health have not changed in recent decades. A significant shift in the orientation of the patent policy in the field of health without careful consideration of the implications for the right to health is thus surprising. There is still scope for debate in the next few years since product patents on medicines do not have to be introduced before 2005. This may give a chance for a further broad-based debate on the advantages and shortcomings of strengthening the patents system in the health sector.

Conclusion And Proposals
The deepening health crisis in many developing countries has raised public concern about the lack of access of poor people to affordable medicines. Public outrage over the exorbitant prices of HIV/AIDS drugs has also put the spotlight on the negative effects of global patent rules on the price and affordability of essential and vitally-needed medicines. Each year about 11 million people die from preventable infectious diseases. The AIDS epidemic is claiming millions of lives, to the extent that in some countries over a quarter of the population is affected.

Around the world, public concern is mounting at how the introduction of strict patent regimes in developing countries required by the WTO's TRIPS Agreement is causing the price of patented drugs to be set at high, often exorbitant levels. The effective monopolies granted by TRIPS allow pharmaceutical giants to suppress competition from alternative, low-cost producers and to charge prices far above what is reasonable. This is done at the expense of many ordinary consumers who are too poor to afford treatment.

Before the establishment of the TRIPS Agreement in 1994, countries were allowed more options to exclude sectors from patent rules in their national laws. Approximately 50 countries (both developed and developing) excluded pharmaceutical products from patenting. However, with the implementation of the TRIPS Agreement, member countries are no longer allowed to do this. The Agreement does allow member countries to take compensatory measures to counter the effective monopolies of companies owning patents. Two of the most important measures are the issuing of compulsory licences, whereby a government can give permission to other parties to produce or import products on which patents had been given without the permission of the patent holder, and the practice of parallel imports. Since TRIPS does not limit the grounds on which compulsory licences can be given, a country should not be prevented from issuing compulsory licenses on other grounds that it may consider necessary to meet public health and other public interest objectives.

However, pressures have been put on many developing countries by governments and companies in some developed countries not to exercise their rights to compulsory licensing or parallel importation. Recent examples of harassment faced by developing countries include the case brought by 39 pharmaceutical companies against the South African government over its Medicines and Related Substances Control Amendment Act, and the dispute settlement case lodged by the USA against Brazil in the WTO in relation to its Industrial Property Law. People everywhere, in developing and developed countries, are outraged at these kinds of pressures imposed on poor countries to prevent them from using the flexibility of TRIPS to improve the access of ordinary people, particularly the poorest, to medicines.

In developing countries, the TRIPS Agreement has exacerbated conflicts between private corporate interests, and the public interest including public health. The controversy over access to medicines has highlighted just one aspect of the imbalances within the TRIPS Agreement, which is too heavily tilted in favour of private right holders and against the public interest. There is growing evidence of social and economic problems caused by the introduction and enforcement of stricter intellectual property rights, which developing countries are obliged to implement as part of their obligations under TRIPS. This has resulted in calls for a re-assessment of the Agreement itself.

The key principle that should guide the discussions in the WTO is that access to essential and vitally-needed medicines is a fundamental human right. Poor people have the right to good health, and therefore to medicines for the treatment of poverty-related diseases. Protecting people's health and saving their lives must take precedence over the strict protection of intellectual property and the very high profits which drug companies derive from this. Governments need a permanent guarantee that they can put public health and the welfare of their citizens before patent rights, without having to face legal pressures or threat of trade sanctions.

Also Read:
Patents and Geographical Indication:
India's perspective in WTO regime is to harmonize with national interest and international obligation. But no compromise should be at the cost of public interest. Areas like pharmaceuticals, agro-chemical products should be taken into consideration while changing Indian law as regards to patent.

Product Patent for the Indian Pharmaceutical Sector under the TRIPS regime:
The strength of the Indian pharmaceutical industry is in reverse engineering. Such units by utilising the provisions under compulsory licensing and exceptions to exclusive rights under the TRIPS agreement should aim at producing the generic version of the patented product and those that are nearing patent expiry.

India in Pharmaceutical Patents Regime:
The inventor is able to earn higher profits and therefore would likely invest more in R&D and drug discovery and testing, in turn increasing consumer welfare. Also, patent laws require specifications to be disclosed to all and therefore information about new technologies becomes more quickly available to others as an input into their own R&D. Moreover the innovating firm is able to reveal its innovation without losing control and hence can sub-contract parts of the development work at lower cost to countries like India.

Patent Protection in respect to Nanotechnology:
Strong patent protection may spur research and invention, but it may also lead to a patent thicket¨ and expensive litigation over seminal patents. Patent thicket, a phenomenon peculiar particularly in patents in nanotechnology, basically refers to a situation where though a patent is granted to a nanotechnological invention, it becomes unworkable due to the operation of a previously granted patent for a similar invention.

Patentability Criteria:
As far as India is concerned ,it can authoritatively be said that though it is having a quite sensible Patentability Criteria for patenting the inventions in any field of art, which are New ,Useful as well as Non –Obvious (to the person skilled in that Field of Art to which the Invention relates) , but at the same time it shall also be remembered that the Patent Laws in India which were originally enacted in 1970, needs to be further amended as far as the field of Medicines is concerned because the Patent system in India does not affect the rich and the elite class of people but it does affect the availability and affordability of medicines for the poor people who in the developing country like India are caught in a vicious circle wherein the Poor health leads to poverty, and poverty in its turn breeds poor health.

Managing Intellectual property:
The IPR cult in India is still at embryotic stage and the same is misconstrued and misinterpreted. IPR poses very potential revenue generating weapon if explored to the fullest but currently local Globe view IPR as cost incurring and requiring very high maintenance cost hence compromise on hiring competent personnel in the field.

Business Method Patents:
Patent protection for business method patents is available in virtually every major market of the world provided that the business method must utilize some tangible technology such as hardware embedded softwares.

Working of Patents In India:
The local working requirements of the Indian Patent Act are therefore malleable to meet the conditions of the day. The suitability of using such a requirement to facilitate the transfer of technology to India is questionable. Ultimately transfer of technology depends on a whole range of factors and not simply a statutory requirement.

Patentability of Biotechnological in Indian Agriculture
Mutually supported testing of technologies should be encouraged by a change in attitude and mindset in public, public-private or private-private partnerships to address high proportionate initial costs and risks, particularly that of the biotechnological R&D. Active partnerships should be further encouraged in exploring the new tools of applied genomics to understand and improve the biological systems in public interest.

Patent Protection in the field of Nanotechnology:
Nanotechnology is the design, characterization, production and application of structures, devices and systems by controlling shape and size at the nanoscale. It is the understanding and control of matter at dimensions of roughly 1 to 100 nanometres, where unique phenomena enable novel applications.

Managing Intellectual property:
The IPR cult in India is still at embryotic stage and the same is misconstrued and misinterpreted. IPR poses very potential revenue generating weapon if explored to the fullest but currently local Globe view IPR as cost incurring and requiring very high maintenance cost hence compromise on hiring competent personnel in the field.

Business Method Patents:
Business Method Patents are a special category of patents which are granted for an innovative way of doing business. The methods or process which can be patented under this category includes teaching methods, sales skills, financial services, investment services and marketing and advertising methods etc.

Working of Patents In India:
The local working requirements of the Indian Patent Act are therefore malleable to meet the conditions of the day. The suitability of using such a requirement to facilitate the transfer of technology to India is questionable. Ultimately transfer of technology depends on a whole range of factors and not simply a statutory requirement.

Novartis patent claim- case study:
In November 2003, The Controller General of Patents & Trademarks of India granted exclusive marketing right (EMR) of Glivec, the blood cancer drug to Novartis  the right to be the only company that can produce and market the drug in India. Novartis began enforcing the EMR for Glivec by asking for an injunction against generic manufacturers of the drug in the Madras High Court.

Traditional Medicine and Intellectual Property Rights:
Traditional Medicine (TM) plays a crucial role in health-care and serves the health needs of a vast majority of people in developing countries. Access to “modem” health care services and medicine may be limited in developing countries.

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