COMPULSORY LICENSING
“BEFORE PROVIDING ACCESS TO AFFORDABLE
MEDICINES, WE MUST ENSURE THAT PATIENTS HAVE ACCESS TO FACILITIES/RESOURCES THROUGH WHICH THEY CAN BE DIAGNOSED WITH THE AILMENTS THAT REQUIRE SUCH MEDICINE.”
given a patentee’s right to create a monopoly over a market, a framework needs to be in place to handle strategies that damage the public at large; and ‘evil’ because it is an exercise that fundamentally takes away from one, the patentee, and rewards another, the licensee.
To be effective and to ensure that the public
actually enjoys the desired benefit, this necessary evil must be backed by a coherent and practical policy supported by the right structural framework. Here are some points to ponder.
The right to healthcare
Compulsory licensing of medicines is the second of a two-step approach to solving India’s healthcare issues. Te first step is to safeguard a citizen’s right to life (a constitutional duty) by ensuring access to affordable healthcare. Before providing access to affordable medicines, we must ensure that patients have access to facilities/ resources through which they can be diagnosed with the ailments that require such medicine. Simply stated, a robust healthcare system must be a condition precedent to any policies directed towards compulsory licensing. Only aſter such a system is in place can the government make an informed decision as to whether it wants to use the necessary evil, or to choose less aggressive alternatives such as buying drugs in bulk and subsidising the price for lower income groups or providing incentives to help the innovator companies bring down their prices.
Impaired commercialisation
Simply allowing compulsory licences does not ensure that the people who need the medicines will receive them at the right time, in the right quality and at the right price. Tis is a framework issue, and the government needs to ensure that the
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proper supply chain networks are in place before a licence is granted. Ten, checks have to be designed to ensure that quality is not compromised in the interest of lower prices. Finally, there has to be a mechanism to prevent the price advantage being reversed because third parties, who have managed to get their hands on the medicines, end up selling it at higher prices—unfortunately, this situation is not unheard of in India.
The right price
Tere has been little, if any, discussion on the sanctity of the price offered by the licensee. Is the reduced price still affordable? For example, while Natco purports to sell the generic version of Nexavar at a 97 percent discount (approximately $161 for a month’s supply), some reports suggest that this is still unaffordable for more than 50 percent of cancer patients, especially given that an average Indian earns approximately $90 per month. To correct this anomaly, special pricing guidelines for compulsory licensing should be considered. Aſter all, if compulsory licensing is about public interest, shouldn’t the burden of this public interest be borne by the licensee and the patentee, both of whom should be made to give up their share of profits for the public good?
Innovate or copy
Innovators argue that frequent use of compulsory licensing will discourage the introduction of new medicines, since this framework fundamentally weakens patent protection—the very system that underpins the ability of the private sector to undertake essential new drug innovation. In India, unfortunately, the trend is not promising. Recent statistics show that the Indian pharmaceutical industry, which produces 10 percent of the world’s pharmaceuticals and is the 14th-largest country producer by value, invests a scant 7 percent of global revenue in research and development as compared to the 20 to 25 percent invested by innovator companies.
So if the ultimate goal is public good through self- reliance on cheaper medicines, Indian generics are heading in the wrong direction. While doing it more cheaply is good, if India does not start investing more money in new drug research the current benefit achieved through compulsory licensing will be a only temporary solution, and we will remain copycats.
Te list can continue, but suffice to say that there are several factors which show that compulsory licensing must be used judiciously, because it remains a tool, but not the only tool, we can rely on to make inventions available at an affordable price to all sections of the society. But, the burden is not India’s alone. Before India is expected to
change its position on compulsory licensing, multinational companies looking to India must accept that in India, reaping benefits from the commercialisation of patented drugs involves an emotional and social dimension different from that in the western world, and that India cannot be bullied into becoming a purely capitalistic, patentee-dominated environment.
For a lasting solution, there needs to be a proactive effort by multinational patentees to engage in a dialogue as equal partners in solving a serious problem. Only then will we embark on a journey towards balancing patent monopoly and public good.
Pankaj Soni is a partner at Remfry & Sagar. He can be contacted at:
pankaj.soni@
remfry.com
Satyoki Koundinya is an associate at Remfry & Sagar. He can be contacted at:
satyoki.koundinya@remfry.com
Pankaj Soni is a partner with Remfry & Sagar with more than 15 years of industry and legal experience dealing with technology and IP matters in India and the US. His practice includes patent litigation, patent prosecution and portfolio development counselling.
Satyoki Koundinya is an associate at Remfry & Sagar. He is involved in prosecution of patent applications pertaining to the fields of mechanical engineering, computer sciences and electronics. Satyoki received an LLB (Hons in IP rights) from the Indian Institute of Technology, Kharagpur.
World Intellectual Property Review Annual 2013
71
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