PATENTING THE CURE: PATENTS IN THE PHARMACEUTICAL INDUSTRY AND COVID-19

This article has been authored by Trusha Yadavilli, a second-year student at Jindal Global Law School

Introduction

The human will to survive and thrive has been marked by innovation throughout the millennia. The key to survival is the power to heal – and the world of medicine in particular is always evolving. In all these eons there was never a patent on a cure and the innovations in this sector because of which we have been able to successfully battle diseases such as smallpox, polio and influenza which had previously sent millions to their death. Today a new behemoth has shook the world, the Coronavirus has swept across the world claiming many lives, shaking the very foundation of economies and governments of several countries. While the world is learning to live and adapt to Covid-19, finding a cure to this pandemic remains the primary goal for every nation.

As cases continue to rise, companies dealing in drugs and medical equipment such as PPE kits, ventilators etc. have seen a sharp growth in the demand for their products. Along with this, there has been a simultaneous surge in patenting activities in the pharmaceutical industry with a patenting war breaking out among various companies on drugs that are yet to be created or yet to be proven useful. Patenting essentially gives these companies a monopoly over the pricing and distribution of the drugs, often abusing the pricing power. This could potentially lead to many being unable to access vital medicines during the pandemic, the cure and who will be cured seems to lie in the hands of these pharmaceutical giants. This article aims to study the TRIPS Agreement and its effect on public health around the world and the article also seeks to deliberate if the various provisions of TRIPS prove to be an impediment in the global race to find a cure to Coronavirus.

TRIPS Agreement and the Pharmaceutical Industry

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement enforced in 1995, is the most comprehensive multilateral agreement containing the minimum standards of protection for intellectual property. It compulsorily applies to all the members of the World Trade Organization (WTO) and it aims to protect the interests of the inventor of the intellectual property by giving them exclusive rights for a certain period of time.

The role of TRIPS in the Pharmaceutical industry has been widely debated as with the introduction of this agreement, patenting of pharmaceutical inventions and their processes became possible. Pharmaceutical Multinational Corporations (MNC) could now patent their procedure of manufacturing medicines and their drugs for a minimum of 20 years according to Article 33 of TRIPS. Many feared that patenting would seriously impair the efforts to improve public health and accessibility especially in the cases of life-saving drugs.

World Health Organization (WHO) estimates that one-third of the world population does not have access to essential drugs. Such patenting can lead to an increase in the price of medicines which can in turn decrease the availability of these essential drugs to many patients especially in developing countries further widening the gap. These patents have had an effect on the price of drugs for HIV, AIDS, and Tuberculosis etc. which has contributed to a further increase in the death toll, sparking outrage and concern.

Public Health and TRIPS

Various measures were introduced by the World Trade Organization (WTO) to minimize the growing concern among countries about the abuse of these patents and its effect on public health. The 2001 Doha Ministerial Declaration aims to shed light on numerous provisions of TRIPS to help alleviate the apprehensions about the patents and its effect on the affordability and availability of essential drugs and the measures that the member countries could take in cases of international/ national emergencies.

Article 8 of TRIPS states that members, in order to safeguard public health, can formulate or amend their laws and adopt measures that they believe are necessary. Another important system placed by TRIPS is the order of Compulsory licensing under Article 31. Compulsory licensing allows the government to grant someone other than the patent owner authorization to produce a patented product without the patents holder’s permission. This provision plays a crucial role in regulating companies which might take advantage of their patents and abuse their pricing power. Article 6 deals with Parallel importation, which is the importation of a patented product marketed in another country without the consent of the patent owner. It states that parallel importations cannot be challenged if member countries deem it necessary.

Another concern was that of less developed countries and their access to essential drugs. Usually, developed countries are able to develop and invest in drugs which leaves the developing, underdeveloped and undeveloped countries at a disadvantage. Article 66 (2) of TRIPS aims to help bridge this gap, by stating that developed countries should provide incentives to companies in their territories to promote technology transfer to lesser developed countries. These provisions also allow them to circumvent the protection vested onto the owners of these patents which proves to be especially useful in times like these. They play an important role in maintaining equitable distribution, affordability along with curbing abuse of patents and the rights given under TRIPS.

Patenting War in the Wake of Coronavirus: A Global Perspective

Doctors and scientists from around the world have been scrambling to find a cure to Coronavirus and patenting plays a critical role in this search. Patenting may impede the production and development of new drugs by other companies if a licence is not granted which may seriously hinder and prolong the discovery of the vaccine. Various corporations have faced backlash after they refused to give up their patent rights and provide licenses to other companies.

Paul Hudson, the CEO of Sanofi (a pharmaceutical company) remarked that US may get access to the vaccines, if it successfully creates one, before other countries because of its funding in their research. While it would be well within their rights to decide who gets access to their drugs according to TRIPS, many developing countries who are buckling under the pressure may not be able to survive the delay in vaccines and drugs if they are absorbed completely by other countries.

Roche, another multinational pharmaceutical corporation, denied giving the ingredients for Lysis buffer which is used to create Covid-19 tests to Dutch companies. The non-disclosure led to a severe dearth in testing kits in Netherlands. After facing criticism and a possibility of facing investigations by the European commission they released the ingredients required. Such cases prove to be only hurdles in the global fight against Coronavirus. Patents are being used as weapons by these companies to eliminate competition and to capitalise on the current situation. Rather than focusing on patenting medicines, corporations and nations should start directing their resources in finding the cure as soon as possible.

Conversely, a few countries have also implemented measures granting compulsory licensing to provide immunity from IP proceedings in order to expedite the discovery of the vaccine. Chile under Resolution No.896 and Israel (for the drugs lopinavir/ritonavir) were the first countries to adopt compulsory licensing. Canada and Germany have also enacted laws facilitating Compulsory Licencing with the former passing the COVID-19 Emergency Response Act and the latter enacting The Epidemic Protection Act. WHO has called for a COVID-19 Technology Access Pool (C-TAP) where countries and companies will voluntarily share COVID-19 health technology related knowledge, intellectual property and data.

TRIPS in India and The Patents Act, 1970

Being a part of WTO, India had to make certain amendments in the Patents Act, 1970 to conform to TRIPS. As a developing country, much of India’s population is unable to afford expensive medication often succumbing to diseases. TRIPS potentially allows the owners of such patents to eliminate competition in the pharmaceutical industry often using this power to set exorbitant prices. While India is recording one of the highest number of Covid-19 cases in the world, unease over the fate of the vaccine and its availability to the general public continues to grow.

Fevipriavir and Remidisivir are currently undergoing trials to test their effectiveness against Coronavirus and both of these drugs are protected through a registered patent in India. These patents might create problems if the patent holders decide to exercise their rights in case these drugs are found useful. Many are pushing for India to implement compulsory licencing on drugs already patented for Covid-19, following the footsteps of countries like Chile and Israel.

India in the past has successfully restricted unnecessary patenting activity, regulating the prices in the market, earning the title of ‘Pharmacy of the Developing World’. Bayer Corporation vs Union Of India was the first case where India passed the order of compulsory licence. In order to ensure that Nexavar (a drug used to cure Liver and Kidney cancer) was affordable to the public, The Intellectual Property Appellant Board (IPAB) granted compulsory licencing on their patent under Section 84(1) of Patents Act, 1970.

In Novartis Ag vs Union Of India & Ors, Novartis, a pharmaceutical company applied for a patent on one of their drugs “Gleevec” which is used to treat Chronic Myeloid Leukemia. This application was rejected by the Government and the IPAB under Section 3(d) of the Indian Patent Act, 1970 and to restrict evergreening of already patented products so as to improve accessibility.

F. Hoffmann-La Roche Ltd vs Cipla Ltd., Mumbai Central was the first patent litigation case after the 2005 Product Patent Regime which stressed on public health and pricing problems along with the addition of Section 3(d) of the Indian Patents Act,1970 which prevents evergreening. Roche filed a patent infringement suit against Cipla asking for a permanent injunction on their drug. The Court did not grant this injunction to protect public interest as Cipla’s drug was a fraction of the price of Roches drug. By granting this injunction many people would not have been able to afford the drug which would have been a grave injustice, this became a landmark case serving as a precedent for many patent litigation cases.

Similarly, there must be complete restriction of monopoly over drugs and equipment and all unwarranted patenting should be curbed in such tumultuous times. India, under Section 84 of the Indian patent Act 1970 and Article 31 of TRIPS should order a blanket system of compulsory licensing on all drugs and equipment relating to Coronavirus to ensure fair prices to the public.

Conclusion

The patenting war only hampers and delays the discovery of the cure for the virus and countries across the world must issue compulsory licensing or other provisions in order to ensure reasonable prices along with equitable distribution. Companies obtain a type of monopoly on life when power goes unchecked. The various provisions of TRIPS read with The Doha Declaration that have been placed to keep a check on arbitrary patenting activities particularly in regard to public health must be used effectively.

Cooperation among nations and companies should be encouraged and while various countries are heeding the call, making changes and facilitating an efficient search for the cure, there is a lot of work that still needs to be done. With increased funding and international support, special measures should be taken so that underdeveloped countries which are not able to produce equipment and drugs at a large scale are able to battle the virus. The search for a cure should be a global effort and who gets to live or die should not remain in the hands of a company or a nation.