How this provision of patent law can boost drug supplies and increase access to essential medicines …

Compulsory Licensing of Patents for Covid Drugs amidst the Pandemic

Introduction

In a recent order passed by the Delhi High Court in the case of Rakesh Malhotra v. Government of National Capital Territory of India and Others  W.P.(C) 3031/2020, the Division Bench comprising of Justices Vipin Sanghi and Justice Rekha Palli, directed the Central Government to ramp up production of medicines used in the treatment of Covid-19 patients by reaching out to the manufacturers/ patent holders/ licensees of these drugs.  

Compulsory License and government use

Under the provisions of the WTO TRIPS Agreement, compulsory licensing is “when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself”. Under the Indian Patents Act, 1970, several provisions exist which empower the government to tackle national emergencies, such as the one that we are all currently facing. Let’s take a look at some of these options:

The first option is under Section 92 of the Act, which states that if the central government declares a national emergency (due to COVID crisis), any person interested in manufacturing said patent can make an application to the Controller General of Patents who can then issue a compulsory license . The grounds on which a compulsory license may be granted are:

1. The reasonable requirements of the public with respect to the patented invention have not been satisfied; or

2. The patented invention is not available to the public at a reasonably affordable price; or

3. The patented invention is not worked in the territory of India.

Under such a situation, the Controller may not consider following the regular procedure of hearings.

The second option is the power of the central government as mentioned under Section 100 of the Act, which authorizes a third party to use any patent granted or yet to be granted, on payment of adequate remuneration while negotiating over royalties with the patentees. In case an agreement is not reached at regarding,  the cost of the license, it is up to the High Court to fix the reasonable royalty that is payable to the patentee on FRAND terms.

The third option is under Section 102 of the Act, whereby the government has the power to simply acquire the patents in question from the patentees for a public purpose. To ensure the availability of the patented technology at a reasonable price for consumers, a reasonable royalty is fixed under each of the above cases .

Development across the World

In the context of the present pandemic, Israel issued a compulsory license last year in March authorizing import of the HIV drug – Kaletra produced by AbbVie from the Indian drug maker Hetero for making the generic version of the drug and make it available to the Israeli public at affordable prices and in adequate quantities. Similarly, the parliament of Chile last year adopted a resolution declaring the desirability of compulsory patent licences to facilitate access to vaccines, drugs and other technologies useful for the prevention, detection, diagnosis and treatment of people infected by the coronavirus in Chile. Other countries such as Ecuador, France, Germany and Canada also invoked the provisions available under their respective patent laws for issue of compulsory licences for patents that covered potential cures. The European Union (EU) passed pandemic-specific laws to issue licenses to third parties to produce patented drugs which could help alleviate drug shortages. More recently, the EU Commission adopted a Temporary Framework (TF) to provide antitrust guidance to companies on certain cooperation projects which aimed at addressing a shortage of supply of essential products and services.

India’s Position

Gilead Sciences’ anti-viral drug Remdesivir has shown efficacy in treating coronavirus patients. However, there has been an acute shortage of these drugs. Given that India is one of the largest generic drug manufacturers in the world, the drug could be made available rapidly and at affordable prices to the people if relevant provisions of the Patents Act are invoked. Section 92 of the Indian Patents Act, empowers the central government to make a declaration in the official gazette. After such notification, the Controller General of Patents has a right to issue a compulsory license  to manufacture the drug in the country and Indian generic drug manufacturers have the ability and the will to manufacture the generic versions of Remdesivir’s.

Recently, Former Prime Minister Manmohan Singh wrote a letter to the Prime Minister  stating: “I believe this is the time to invoke the compulsory licensing provisions in the law, so that a number of companies are able to produce the vaccines under a licence. This, I recall, had happened earlier in the case of medicines to deal with HIV/AIDS,”. The Maharashtra government has also urged the Centre to issue compulsory licence for remdesivir, used for treatment of COVID-19, to allow various Indian drugmakers to make the drug available amidst the second wave of the pandemic in the country. The global outbreak of COVID-19 clearly presents an imminent threat to public health which, in most other jurisdictions, is likely to justify the grant of a compulsory license. Many medical experts have also demanded governments to use compulsory licensing for the generic production of such a drug to help save lives.

Conclusion

Admittedly, a compulsory license may not be a complete solution to deal with the pandemic but compulsory licensing can certainly boost drug supplies and increase access. Compulsory licences could act as a safeguard to equitable global access of vaccines for COVID-19 and a powerful public health tool to work around concerns over an insufficient supply of important pharmaceutical products. Finally, it will be interesting to see how the government moves forward on this front and reacts to such crisis and how they use the flexibilities available under the patent system.

Other possible options for making the patented pharmaceutical drugs and medical supply available to the public are discussed here.

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