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Intellectual Property Rights

THE TRYST OF COMPULSORY LICENSING IN INDIA: THE EXIGENCY OF THE PANDEMIC

The article is authored by Aishwarya Anand, who is the head and founder of Manu & Co.-Advocates & Solicitors (www.manulaws.in) and is a graduate of National Law University, Jodhpur & Raksha Bhandari, who is intern at Manu & Co.-Advocates & Solicitors and is a third year student at Institute of Law, Nirma University, Gujarat.

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Picture Credit: – lifesciencesperspectives.com

INTRODUCTION

The Supreme Court of India has always unfailingly come to the aid of the citizens whenever the legislature and the executive have failed to fulfil their obligations. Commandeering the process of effective dispensation of law, the Apex Court of the country took suo motu cognizance[i] of the humanitarian crisis following the “unpredicted” wave of COVID-19 pandemic on 24th April 2021, thereby, urging the Central Government to review its policies in wake of the national emergency in the country.

Taking into account the upsurge of the COVID cases in the country and the declining availability and the production of drugs like Remdesiver and Tolicizumab, used to cure COVID-19, the Apex Court opined the Central Government to explore the possibilities of granting of compulsory licenses for these drugs under the Patents Act, 1970. The Central Government while negating the possibilities to grant of compulsory licenses stated in its affidavit that it is engaging itself with global organizations at diplomatic level and therefore, it would be counter-productive at this stage to reach an amicable solution through granting Compulsory License.

The authors through this piece of research will argue as to why granting compulsory licenses for these drugs can prove beneficial to fight the surge of COVID cases in India and that  otherwise, the ways of requesting aid on diplomatic levels would only prove to be against the policies of Aatma Nirbhar Bharat of the government and will be fatal to fight against the present and the impending third wave of COVID-19 in India.

THE IMPETUS BEHIND THE WRIT PETITION

The Supreme Court in the aforesaid Writ Petition, vide its order dated 30-04-2021 requested the Central government, if at all they can consider invoking its powers and jurisdiction under Sections 92, 100 and 102 of the Patents Act, 1970 (Act, 1970) for granting compulsory licenses to more indigenous manufacturers to augment the supply of COVID treating drugs in the country which has seen an upsurge to the extent of more than 4,00,000 COVID positive cases per day in the months of April and May, 2021.[ii]

To this effect, section 92 of the Act, 1970 enumerates three instances when the Central Government by way of an official gazette can grant compulsory license to the patents –  national emergency, extreme urgency or public non-commercial use. Further, sections 100 and 102 of the Act, 1970, grants the Central Government the power to use inventions for certain specified purposes. The primary objective behind these provisions is to make an invention affordable to public thereby serving their interests.

Acknowledging the precariousness of the present situation in the country and the shortage of supply of the patented drugs that have proved beneficial for treating COVID patients, the Supreme Court solicited the Centre to adopt the compulsory licensing mechanism to augment their production; however, the order of the court is merely directional in nature and cannot bind the Centre.

THE ESCAPIST ASSERTIONS OF THE CENTRE

To the query put by the Apex Court, the Centre filed an affidavit wherein it has encapsulated its reasoning that M/s Gilead, U.S. which is the patent holder of Remdisivir has given licenses to seven manufacturers and 35 additional manufacturing sites in India.[iii] It was also contended that India was manufacturing 60,000 vials of Remdisivir prior to the recent surge and now the production capacity has been amplified to 2,00,000 vials per day.[iv] Further, as per the affidavit, the MoHFW is hopeful about procuring additional vials of the injection from other countries through its diplomatic relations. Statistically, India will receive 3 Lakhs doses of Remdisivir from Egypt by 1st week of June, 2021 and 1.25 Lakhs from USAID among other smaller doses from various aids.[v]

THE NEED FOR COMPULSORY LICENSING IN THE COUNTRY

At this stage, it would be pertinent to state that after taking into account factors such as delayed reporting, limited testing and unreported positive cases, India, on 30th April 2021 became the first country globally to report more than 4,00,000 positive cases of COVID-19 daily and the active number of cases surpassed the one million marks in the first-half of April, 2021[vi]. Additionally, India in the months of April and May has shown a daily average of 3,00,000 COVID- 19 cases, wherein the active number of positive cases had crossed 25,00,000 by the end of April, 2021.[vii] Figuratively speaking, the total number of COVID-19 cases crossed one crore in December, 2020. After the second wave struck India, the cumulative number of positive cases drastically increased and as per the data shown on the website of Ministry of Health and Family Welfare (MoHFW), the total count of COVID positive cases has nearly reached three crores in a period of 5 months. Hence, it would not be out of place to state that nearly two crore people were affected by the second wave of the pandemic in India.

It stands undoubted that Remdisivir has proved to be an essential drug for treating COVID-19 in India and prima facie reading of the aforesaid conjectures suggests that the Central administration lacks proper facilitation of these drugs and fails to meet the demands of the public. There are several other reasons which make compulsory licensing an essential tool in the hands of the government. This section highlights why compulsory licensing is the need of the hour-

A. Article 21 of the Constitution of India: Considered to be most important facet of our constitution, the right to life has evidently evaporated during the second wave of COVID-19 in India. India is experiencing a fatality every two minutes and the lack of access to the COVID treating drugs has only worsened  the situation. This violates the right to life of the citizens of India and the right of health of the people affected by COVID-19. The Supreme Court has reiterated in a number of judgements that right to health forms an intrinsic part of Article 21 because a person’s health makes his life meaningful and purposeful, thereby making it an important facet of life. Therefore, it is the State’s responsibility to preserve and protect it.

It is a situation of national emergency as there is constant surge in the number of deaths. The same has been acknowledged by the Indian judiciary as well the Indian Drugs Manufacturers’ Association. It is a matter of right of the people to receive proper infrastructure and requisite medicines in order to ensure their survival.

B. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS): India is a signatory of the TRIPS Agreement since 1994 and according to Article 7, the main objective of the Agreement is to protect the rights of the patent holders and to promote innovation and technology between the producers. The same provision also suggests the dissemination and promotion should be such that there is economic and “social welfare”. Further, Article 8 of the Agreement allows the member nations to adopt such laws and measures that help in catering to public interests in areas of vital importance.

The Doha Declaration was adopted in 2001 by the member nations wherein public health, access to medicines and research and development in this regard were given vital importance thereby, allowing compulsory licensing of medicines. The said provisions were incorporated in the light of need for public welfare in case there is national emergency which thereby, manifests the importance of access to medicines by people. India being a signatory to the Agreement has ardently  obliged to the provisions of the Agreement at the International level however at the domestic level there seems to be a confusion as the Government is seen to be supporting a non waiver of patents for certain drugs.

C. Unaffordable pricing of medicines: Owing to the COVID treating drugs being patented in other countries, there is shortage in their production of the same. These drugs are being hoarded in black markets, which has further, led to their procurement possible only to a certain section that is ready to pay extravagant prices. The Indian courts have set stringent standards of punishment for the black marketers, it unfortunately is not the only way to curb black marketing where the cost of a single vial of Remdisivir has peaked Rs. 70, 000 at one instance.[viii]    

Compulsory licensing will help in manufacturing of generic medicines which will be available in the market at low prices. It will help in putting a cap upon the prices of the medicines by inducing competition in the market and will further; increase the production of the same. The case of Bayer Corporation v. Natco Pharma Ltd.[ix] can also be seen in a guiding light which insisted that compulsory licensing induces competition in the industry and thereby helps in lowering the prices of essential drugs in the market.

D. Economic ramifications: Non-availability of drugs in the market has led to black marketing owing to which the drugs are sold at exorbitant prices. Such prices have resulted in considerable drain in the pockets of people especially, the poor. Each year, around 20 million people fall below the poverty line because of the debts accumulated for expenditure on healthcare.[x] The pandemic and non- availability of essential drugs at affordable prices has added to people’s plight, who now, have to face inescapable financial debts and constraints. Licensing of the drugs will augment their production and also, make them affordable to the public.

Further, by invoking its powers, the government itself will have to face lesser constraints in terms of expenditure on healthcare since; it will not have to import drugs from foreign pharmaceutical companies who only seek profiteering from such circumstances.

E. Global emergency: COVID has been declared a pandemic by the World Health Organization because it has affected a large section of population, globally. One of reasons why the Indian government is resisting adopting the compulsory licensing mechanism is because it would affect the Foreign Direct Investment in the country in near future.[xi] The US manifested its disappointment during the Bayers v. Natco[xii] case and Indian government at this point does not want to irk developed countries like the US. However, India having passed the highest number of global infections, it is imperative that the government takes steps that are necessary for safeguarding the Indian population. Many other countries such as Russia, Hungary, Israel etc. have also passed ordinances invoking the compulsory licensing mechanism and have allowed the production of generic medicines.

CONCLUSION

The Indian population has been hit hard with the second wave of the COVID- 19 and is facing execrable experiences. The only hope lies in proper and affordable medication and vaccination; however, there is shortage of the same. It is incumbent upon the government to safeguard their lives by providing them with the necessary infrastructure and the essential medical requirements. Even if the government is facing shortage of raw materials which the government claims is acting as a constraint in granting of licenses to the other manufacturers, compulsory licensing can create a mechanism which can help in augmenting the production of the medicines afterwards at reasonable rates and can help the government be prepared to fight if the situation worsens. Therefore, the government should wisely use its discretion and safeguard the health and lives of the people.


[i]      In Re: Distribution of Essential Supplies and Services During Pandemic (2021) SCC On Line SC 339.

[ii]     Business Standard, IN A FIRST, INDIA RECORDS MORE THAN 4,00,000 CASES IN A SINGLE DAY, https://www.business-standard.com/article/current-affairs/data-story-in-a-first-india-reports-more-than-400-000-covid-cases-in-a-day-121050100195_1.html, (Visited on May 25, 2021).

[iii]    Union of India’s Aff. ¶38 in In Re: Distribution of Essential Supplies and Services During Pandemic, (2021) SCC OnLine SC 339

[iv]     Supra note i.

[v]     Supra note iii, ¶40.

[vi]     The Hindu, INDIA BECAME FIRST COUNTRY IN THE WORLD TO REPORT OVER 4 LAKH NEW CASES ON APRIL 30TH, 2021, https://www.thehindu.com/news/national/coronavirus-india-becomes-first-country-in-the-world-to-report-over-400000-new-cases-on-april-30-2021/article34453081.ece, (Visited on May 25, 2021).

[vii]    Hanna Ritchie, INDIA: CORONA VIRUS PANDEMIC COUNTRY PROFILE, OUR WORLD IN DATA, https://ourworldindata.org/coronavirus/country/india?country, (Visited on May 24, 2021).

[viii]   Bibek Debroy, BLACK MARKETING DURING PANDEMIC COMES FROM LONGSTANDING, SYSTEMATIC FLAWS, THE INDIAN EXPRESS, https://indianexpress.com/article/opinion/columns/black-marketing-during-the-pandemic-comes-from-longstanding-systemic-flaws-7312722/,  (Visited on May 22, 2021).

[ix]     Bayer Corporation v. Union of India (2012) SCC OnLine IPAB 149.

[x]      Rituparna Maiti et al., ESSENTIAL MEDICINES: AN INDIAN PERSPECTIVE, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4581141/, (Visited on May 22, 2021).

[xi]     Mansi Sood, “Nato Pharma Ltd. v. Bayer Corporation and the Compulsory Licensing Regime in India”, 6 NUJS L. REV. 99 (2013), p. 107.

[xii]    Ibid.

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