PHA-Exchange> Patents Act and Access to Medicines
Tawnia Queen
tawnia at hesperian.org
Mon Jan 24 17:07:40 PST 2005
Patents Act and Access to Medicines
The house of Indian Parliament, during its winter
session this year of 2005, is about to introduce the third and final
amendment on Indian Patent Act of 1970, under the TRIPS agreement. This Act
has been a strong pillar for the success of the indigenous drug industry in
India. The need to change is a consequence of, India having ratified the
Final Act embodying the results of the Uruguay Round on 15th April 1994 and
thus, bound to give effect to the obligations of the World Trade
Organization. It is thus forced to change its patent act. The changes
involved will have far reaching consequence not only on access to life
saving medicines and thus to the right to health but also on the
fundamental principals of human rights. What are these changes and what
will be its implications for a common man on the street?
1) Introduction;
A number of articles have of late attracted media attention on
a Bill that the government is planning to introduce, regarding the changes
it plans to introduce on Indian patent act of 1970.
What is patent? A patent is a limited monopoly given to
individuals/corporations (usually a corporation) for a limited number of
years for technological inventions/innovations by preventing others from
using the patented technology. It is granted at the request of
individuals/corporations by the Patent Office in respective countries.
Hence, the patent right is available within the territory of the granting
countries.
How patent laws dictate drug prices and accessibility? Let us look at the
Indian example. Drug prices are the lowest in India amongst the Asian
countries, but this was not so earlier. In 1965 the drug prices were
amongst the highest in the world as India depended heavily for its drug
needs from the imports and on the multinationals. It was the Indian Patent
Act of 1970, which brought in the change, as it allowed only patenting of
the process and not the product. The reason for granting only process
patent in the area of drugs and medicines was for the reason that they were
considered essential to the life and health of the community. It also
reduced the patent period by five to seven years.
So all this made way for:-
1) The local and indigenous industry to manufacture the drug by another
process and
2) Availability for another industry to start the manufacture of the drug
within a short period of five years time.
This helped the indigenous generic drug industry
to grow, so as to meet the needs of the country and also thus inducing
competition so as to reduce the drug prices. With many competitors in the
market, the multinationals (MNC) brought down the drug prices. They had no
other option. It is to be noted that they did not bring down the prices to
help people. On the contrary it was the competition in the market brought
about by the public sector and the private Indian indigenous industry, that
they were compelled to bring down the prices of the drugs. The Indian
Patent Act 1970 helped the growth of the indigenous generic drug industry
and thus to increase the availability of drugs and also to decrease the prices.
The Act of 1970 was hailed as model legislation
for developing countries; by UNACTED (United Nations body) since it has
numerous provisions that balanced the interests of the patentee with those
of the public. As a result the drug prices in India are the cheapest today.
They are between 1000% and 4000% cheaper than the same in US. For example
in Mumbai (in India) one can buy Hytrin (a sophisticated antihypertensive)
for two cents a tablet. A months supply of the drug costs about $4. At a
local pharmacy in Boston (in US) the same drug from the same company costs
$44 that is more than ten times as expensive. Take another example Tablet
Ranitidine; a commonly used medicine for acidity (stomach-ulcers) is twenty
seven times costlier in Pakistan, forty four times costlier in UK and one
hundred sixty three times costlier in USA. There are several such examples.
The Indian patent act 1970 not only made the
medicines cheap in the Indian market but also helped the Indian generic
drug companies like Cipla, Reddy Laboratories and others to grow and
challenge the multinationals globally over the pricing of Antiretroviral
ARV. These are medicines that make the AIDS patient lead a better quality
of life and also increase life span. These medicines need to be taken life
long. ARVs are in urgent need in Africa as the whole of sub-Saharan Africa
is struck with HIV/AIDS. American and Europian multinational companies have
patented the drugs and kept the drugs at a very high price like $15,000 per
patient per year. Indian company Cipla produced the same drugs in a cheaper
way and offered for just $350 per patient per year. This was possible only
because of our patent act.
The 1970 Patent Act was formulated after an exhaustive process
of discussions within the country - both inside and outside Parliament --
starting from the Justice N. Rajagopala Ayyangar Committee Report of 1959.
Indias patent law was introduced in 1859, just two years after it came
under British rule. Similar was the case with many other Asian & African
countries.
2) The amendment;
The Bill on Patents has totally three amendments
in all. This particular amendment is the third in the series. The first in
the series was done by the Act of 1999, effecting retrospectively from 1st
January 1995, dealing with Exclusive Marketing Rights (EMR). This was
followed by the Second Amendment Act in 2002. All these changes are in view
of the fact that, India become a WTO member in 1995 and must implement the
new TRIPS rules in the pharmaceutical sector by January 1, 2005.
The period of the patent protection will be
extended to twenty years and this will be of disadvantage to the Indian
drug industries, as this allows a particular company (mostly MNC or big
companies) to sell the drug in the market for a longer period, without
competition, which otherwise would have reduced the prices of the drug. In
fact when looked at the earlier achievements of India at bringing down
global prices of drugs, it was this particular protection for five years
that had helped the Indian drug industry. And this also made medicines
available as soon as it was produced in the foreign market. It is extremely
important to make medicines accessible when people need it most. For
example Penicillin, a life saving antibiotic, was produced in the foreign
country during 1941 and in India it was produced only during 1963. It took
22 years for the drug to be produced in the Indian market. Similarly
Streptomycin another life saving essential medicine used for Tuberculosis
was produced in foreign market during 1947, but produced in Indian market
in 1963. Thus it took 16 years for the drug to be produced in the Indian
market. All this was before 1970, and things changed as the new patent act
was brought into functioning. For example Salbutamol, a drug used to treat
Asthma was produced in the foreign market in 1973 and it was produced in
the Indian market in 1977, just 4 years after. Similarly Mebendazole, a
drug used to treat common intestinal worm infestation was produced for the
world market by 1977 and in India in 1978. Just 1 year after. This early
production of the drug in the Indian market was a great a boon to the
patients. All this early availability of the medicine will be missed now
and a dying patient in need of life saving drug will have to be told to
wait till the medicines are easily available for him, at a cost that he can
afford!
This is more so relevant in view of the fact that HIV/AIDS in India are
extremely important public health concerns. The official estimate as per
UNAIDS report of June 2000 in India is at 3.7 million. (See chart for
details). Of these 800,000 are already suffering from AIDS, and a vast
majority of them cannot afford to buy medicines, as it is beyond their
purchasing capacity.
The case of a drug used in the treatment of patients suffering from a type
of blood cancer, Chronic Myeloid Leukaemia (CML) illustrates the likely
impact of monopolies in the pharmaceutical sector. The generic version of
the drug, produced in India, costs Rs. 9,000 to Rs. 12,000 per month. The
government has now granted EMR to Novartis AG for their version of the
drug, Gleevec. If it is enforced, generic versions of the drug will have to
be withdrawn from the market, forcing most Indians suffering from CML to do
without the life-saving medicine because Gleevec is priced at an
astronomical Rs. 1,20,000 per month.
Take the example of "atypical anti-psychotic" drugs, used in the treatment
of schizophrenia, a common and life-long mental illness. There is currently
little price difference between old and new drugs in this category here,
and the prices of locally produced brands are far lower than those of
multinational companies. As a result even prestigious public hospitals such
as the National Institute for Mental Health and Neurosciences (NIMHANS) in
Bangalore are increasingly prescribing the latter, which have fewer
side-effects and ensure better quality of life. If the patent application
pending for one of these drugs Olanzapine --is successful, cheaper local
versions of it will no longer be available to patients here. No doubt more
drugs in this category --and others --will soon follow suit.
The magnitude of the HIV/AIDS in India.
3a26da1e.jpg
Also there are several key areas of concern in the third Ordinance that the
government is planning;-
(1) The Ordinance has diluted the earlier provision in the Indian Patents
Act, where a "new use" of a known substance was not patentable by
qualifying "new use" with the word "mere".
(2) The Ordinance has also diluted earlier provisions for opposition to the
grant of a Patent. The provision for opposition retained is extremely weak
and does not even allow the person opposing the grant of a Patent to be a
party to the dispute.
(3) The ordinance has a curious formulation which says that a claimant for
a Patent will enjoy all the rights of a Patent holder once the claim is
published, i.e. even before the Patent is granted.
(4) The Ordinance has also made no provision to allow continued manufacture
of drugs which are now being produced in the country, but may be granted a
Patent after 1.1.2005.
(5) the present compulsory license regime in the Ordinance is loaded with
cumbersome procedures. All this will delay granting of compulsory license.
The Bill has thus remained with several gaps, especially in
terms of failure to utilize the space legitimately available to India
within TRIPS. The bill fails to incorporate provisions on conditions that
are consistent with the country's development aims, such as compulsory
licensing, right to manufacture for exports, adequate protection for
indigenous research and development, control of the term of patents and
revocation to protect public interest in emergencies.
3) Doha declaration:-
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. The
significance of compulsory license becomes clear in the context of
treatment for people living with HIV/AIDS.
The Doha Declaration which was adopted on 14th November 2001 at Doha in
Qatar. It states clearly in Para 4, regarding Compulsory License as follows.
"We agree that the TRIPS agreement does not and should not prevent Members
from taking measures to protect public health. Accordingly, while
reiterating our commitment to the TRIPS Agreement, we reaffirm that the
Agreement can and should be interpreted and implemented in a manner
supportive of WTO Members "right to protect public health and, in
particular, to promote access to medicines for all".
It was left to the TRIPS council to take necessary action on this issue.
Just before the Cancun meeting during August 2003, the TRIPS council
diluted most of the issues connected with CL and parallel importing. Post
Doha, the USA tried to push for the definition of public health to mean
majority HIV/AIDS, TB and malaria. This was later given up because of the
protests from NGOs.
The proposed 3rd amendment of the Indian Patent Act, permits exports to a
country with little or no manufacturing capacity, provided there is a
corresponding patent in the IMPORTING COUNTRY. This is totally unacceptable
and unrealistic as LDCs (Least Developed Countries) have up to 2016 to
comply with TRIPS. And also many of LDCs may not have Compulsory Licenses.
The amended legislation is far from being adequate for use of Compulsory
Licenses. It is unfortunate that the provisions within TRIPS are not being
used; in spite the Doha Declaration clarifications, while many other
developing countries would be watching for India to take a leadership on
this issue. Says Dr Y.K. Hamied, chairman, Cipla: "Patent laws have to be
national and not international laws. These have to be for the public
good." Agrees N.B. Zaveri, a lawyer specializing in patent laws: "The Doha
declaration expects product patents to be recognized, but asserts primacy
of public health over commercial interests."
Under the provision of a compulsory license in a product patent regime, the
government can allow immediate production of a patented drug by anyone in
case of a national emergency like an epidemic. Even the richest nations
make these provisions, like after the anthrax scare the US administration
almost threatened for supply of generic drug, Ciprofloxacin. Though the
Doha Declaration does not contemplate a right to oppose or hold elaborate
inquiries for grant of Compulsory Licenses. But the present Bill is
burdened with conditionality and time consuming procedural requirements. It
allows anyone to oppose the grant of a compulsory licence. "This is
self-defeating in nature", says Zaveri, because MNCs will move the courts
to protect their patented. Think of endless court proceedings while a
plague spreads furiously!
Dr Hamied of Cipla further argues "In a country with over 60 million
diabetics, 50 million asthmatics, 80 million heart patients, where, by
World Bank figures, there will be 35 million HIV positive cases by 2005,
health is a permanent crisis." So he adds, "One needs a system of
permanent compulsory licensing, an auto-licence of right with a reasonable
royalty." That means the existing system where a patent owner gets a
royalty and the manufacturer has the right to produce the drug, thus India
just cannot afford monopolies. According to IPA (Indian Pharmaceutical
Alliance), a powerful Indian industry body which works closely with the
Indian government on policy issues concerning on patents and drugs, at
least four companies --Sun Pharma, Unichem, Torrent and USV--- privately
endorse Dr Hamied's contention of categorizing India as a country with
"health as a permanent crises".
Much of the inputs for this Bill had perhaps originated by WIPO (World
Intellectual Property Rights) as it had stressed to government to
strengthen its IPR and "for eradicating the unfavorable intellectual
property right (IPR)". WIPO had launched a programme during 2001 to train
and advice Indian government officials, persons in semi governmental and
private sector in the region to public through its seminars on issues
relating to strengthening of IPR.
4) Myths of MNCs regarding R&D;
The argument for a strong patent regime for
pharmaceutical companies is often made by them (most of them being US or
European drug companies) on the basis that there is heavy investment costs
for R&D (Research and Development) that goes into the creation of new drug.
It is however important to examine these claims properly. A look at 1996
-2002 annual report of US Drug Company, throws light on this issue poorly
explored area. The top nine drug companies spent a total of $45.4 billion
on marketing, advertising, and administration and only $19.1 billion on R &
D last year. The highest paid drug company executive made almost $75
million, while the top five executives received more than $183 million in
compensation.
Big drug companies try to explain that they need
strong patent, because it takes $500 million to bring a single drug to
market. A prominent drug industry adviser, points out that this is a bogus
figure for several reasons. Firstly it is a fact that most of the so-called
new drugs are not innovations. Indeed, in excess of 40% of the industry's
R&D is aimed at producing minor variations of existing drugs and not for
developing new drugs. Secondly the fastest growing sector of the drug
companies is marketing sector and not R&D. For example there are 90,000
drug representatives pestering doctors to prescribe their products. The
wages and salaries of these "foot-soldiers" in the form of wages and
salaries is a whooping sum of $12 billion!
This clearly shows how the pharmaceutical
companies have kept the public in the myth of how they are spending their
capital; basically it's the public who are suffering because the money
comes out of their pockets when they increase the price of the drugs to
cover up their R & D costs.
5) Patents and right to health;
Intellectual property law and human rights law
have more or less till recently evolved independently. However with the
broadening scope of patents in basic needs such as health and recent
developments in the health sector itself, the links between the two fields
are fast becoming increasingly obvious and direct. This is truer for
developing countries. These threats which have started becoming
increasingly obvious recently have been subject to scrutiny by human right
groups. Among the political organs, the Sub-Commission on Human Rights
adopted, for instance a resolution in 2001 which recognizes the existence
of potential conflicts between the implementation of TRIPS and the
implementation of economic, social and cultural rights.
The arguments concerning the relationship between
human rights and TRIPS, and debates concerning access to drugs in
developing countries, both point towards the existence of potential
conflicts between the introduction on drugs in developing countries and the
realization of the right to health. It is well known that the
implementation of TRIPS directly implies a reduction in access to drugs and
thus a step back in the implementation of the right to health. This is not
acceptable.
6) Buoyancy to MNCs;
The main aim and objective of the Amendment Bill
is to keep up to the conditionality of World Trade Organization, so that
India gets into the competitive global drug market. But alas! The
competition is awfully unequal. Of the global medications market with sales
of US$ 350 billion, India's share of US$3 billion accounts for slightly
less than 1 percent. One billion Indians spend as much in one year on
pharmaceuticals as do seven million Swiss. "What we in India consume in
medications costs less than the booked net profit of the Swiss chemical
giant Novartis", says Mr Nihchal H.Irani, President of IDMA (Indian Drugs
Manufacturers Association). "Why can't the North grant the South the same
liberal independence in protection of inventions that Switzerland in
particular has claimed for itself over and used for its benefit?
The main aim of changing the Indian Patent Act
seems to be a need of MNC's as they want more market and are eyeing Asia
which is the largest continent of the world where 60% of the world
population lives but contributes only 20% of the world pharmaceuticals
business. With a high rate of population growth it is expected that the
need of drugs will tremendously increase in the Third World countries
including India in the next decades. India contributes 16.1% of the world
population, but it produces only 1.2% of world drug production. Hence the
MNC's are trying to have more control over the pharmaceutical markets of
the developing nations.
Percentage of drug production and
world population in some countries.
Country
% of world
drug production
% of world
population
USA 28.2%
4.7%
Germany 7.7%
1.5%
France 7.1%
1.1%
U.K. 3.4%
1.1%
Brazil 1.7%
2.8%
India 1.2%
16.1%
The real motive behind the pressure to bring in
changes seem to be arm twisting techniques of PhRMA (The Pharmaceutical
Research & Manufacturers of America -an organization of the Multinational
drug companies), as they state in their report of 2000, to NTE (National
Trade Estimate Report on Foreign Trade). It estimates that the losses
attributable as a consequence of the present Indian Patent of 1970, to be
approximately $500 million dollar year. This reveals the concern of US drug
MNCs regarding the existing Patent laws in India. It is to be noted that
the Indian Patent Act of 1970 not only allowed new drugs to be made
available at cheaper prices, it also led to the creation of a platform for
Indian companies to become global players. This process had just started
and had Indian companies competing with global drug companies for generics.
It is really this threat that has prompted the US drug companies to do so.
For long the United States government's position on Patents is
indistinguishable from that of its countries drug companies. So as long as
these drugs giants dominate global policies decisions, the developing
countries governments will continue to dance to the tunes of the WTO
through US drug firms and/or US government.
7) Act now!
THE PRESENT ISSUE IS TO BE DEBATED IN THE PARLIAMENT DURING
FEBRUARY 2005.
Our demands:-
* Say no to TRIPS.
* Make the decisions and discussions of the Government transparent. And
have a public debate.
* Put right to health before patents and profit.
* Retain pre-grant opposition.
* Say no to dosage and usage patents.
* Control all drug prices in the market.
From;-
Dr Gopal Dabade,
Drug Action Forum - Karnataka,
57, Sony, Tejaswinagar,
Dharwad 580 002
<mailto:drdabade at sancharnet.in>drdabade at sancharnet.in
Telephone 0836-2461722.
30,000 children will die in the next 24 hours from preventable diseases.
Click www.TheMillionSignatureCampaign.org , to join a campaign that demands
HEALTH FOR ALL NOW !
----------
Tawnia Queen
International Publications Associate
Hesperian Foundation -- Publishing for Community Health and Empowerment
1919 Addison Street, #304
Berkeley, CA 94704 USA
Phone: 510-845-1447, ext. 219 Fax: 510-845-9141
E-mail: tawnia at hesperian.org http://www.hesperian.org
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