Access to drugs and the Patents Bill

The 1970 Patents Act has put India in an enviable position among developing countries. India now boasts a strong drug producing sector and comparatively cheap medicines. The Patents Bill proposes to undo the legal regime which supports these achievements, says PHILIPPE CULLET.

ACCESS TO drugs is of fundamental importance. It is partly conditioned by the price of medicines which in turn is influenced by the (non)availability of product patents. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement) and the spread of HIV/AIDS have contributed to making access to drugs an issue widely debated in many countries. In India, the Patents (Second Amendment) Bill which seeks to put the 1970 Patents Act in conformity with TRIPS is of great importance with regard to the issue of fostering access to drugs for all.

From the 1970 Patents Act to the Amendment Bill

The 1970 Patents Act generally adopted the western model of intellectual property. However, a number of safeguards were introduced to prevent abuse of patent rights and to make sure that patents would not unduly threaten the fulfilment of basic needs. In the case of health, specific measures were provided, in particular to provide better access to drugs. These included a much shorter duration of the rights granted (7 instead of 14 years), the prohibition of product patents on all medicines and a strong compulsory licensing regime.

Some of the main impacts of the 1970 Patents Act in the health sector have been to promote the rapid development of a domestic pharmaceutical sector producing mainly generic drugs. Indeed, the domestic pharmaceutical industry, which accounted for about 25 per cent of the domestic market by 1970 has increased its share to 70 per cent of bulk drugs and meets nearly all the demand for formulations. Further, it has contributed to improving access to drugs by fostering the availability of comparatively cheap drugs.

TRIPS imposes significant changes to this arrangement. First, it requires the availability of product patents in all fields of technology. Second, it imposes a uniform duration of 20 years for patent rights. Third, compulsory licensing is only allowed within specific limits. This will foster major changes in the health sector: Indian companies will not be able to legally produce generic versions of drugs now protected by patents. From the consumer point of view, some of the main impacts will be the unavailability of cheap generic drugs before the 20-year period of protection elapses. Even though the 1970 Patents Act has fostered better access to drugs, access remains far from universal. In these circumstances, one would expect the bill to preserve as much of the present system as possible.

The Patents Bill is a direct response to TRIPS obligations and must be understood in this context. The current draft clearly reflects the drafters' intention to avoid further confrontation with other WTO member states on the question of TRIPS implementation. In the process, the bill does not make full use of the flexibility offered in TRIPS even though the patents act is being modified because of TRIPS and not because it has been found to be otherwise defective.

The Bill generally provides stronger protection to patent holders. This implies that the balance of interests between inventors and the general public is being shifted in favour of the former. More specifically, the Bill includes the main TRIPS requirements such as a 20-year uniform duration and a narrower framework for compulsory licensing. It also provides for the deletion of some important sections such as the provision seeking to oblige patentees to manufacture their inventions in India and the section concerning licences of right. It does not yet introduce product patents because India benefits from a further delay until 2005 in this field.

The Bill takes advantage of some of the exceptions allowed by TRIPS itself. For instance, it incorporates the environmental and health exceptions in Sec. 3 of the Patents Act which determines the scope of patentability. The bill now specifically rules out the patentability of living things or non-living substances occurring in nature and further rejects the patentability of plants and animals.

Towards a revised Bill

The present Bill is tame in its response to TRIPS. A number of arguments can be made for redrafting the bill. First, the bill does not even make use of all the exceptions allowed in TRIPS.

This is surprising not only because of the substantial opposition to TRIPS in general but also because the Government's own stance is that TRIPS provisions recognising the need to balance the rights and obligations of patent holders are overarching provisions that should qualify other provisions of the agreement. Second, the recent controversies in South Africa and Brazil have shown that the interpretation of TRIPS is an evolving matter.

The failed challenges to these two countries' legislations indicate that provisions limiting patent rights in cases of national health crises are unlikely to be challenged again. Third, TRIPS does not arise in a vacuum. India has other international commitments which must be borne in mind while amending the Patents Act.

As a member state of the Covenant on economic, social and cultural rights, India recognises the right to health as a fundamental human right. Under the Covenant, India is to progressively improve access to drugs. The current bill amounts to partly dismantling the 1970 Patents Act regime and may thus amount to a violation of India's human rights commitments.

The 1970 Patents Act has put India in an enviable position among developing countries. India now boasts a strong drug manufacturing sector and comparatively cheap medicines. The Patents Bill proposes to undo the legal regime which supports these achievements. While part of the changes are unavoidable as long as India decides to remain a member of the WTO, the drafters of the Bill have not made full use of the existing and potential flexibility under TRIPS. The Bill could, for instance, be redrafted to incorporate more specific provisions for compulsory licensing in the case of health, nutrition or environment related crises.

It could also provide like in the South African legislation that patent rights can be curtailed to foster the availability of more affordable medicines. Further, TRIPS recognises the need for the introduction of patents to also foster effective technology transfer. In some cases, the implementation of this article without providing for local working of the patent may not be possible and the 1970 Patents Act clauses providing for local working could be taken as a model in this context.

In general, the 1970 Patents Act was progressive from the perspective of balancing the interests of patent holders against those of society at large. Most of the changes that are required by TRIPS will be losses from the point of view of this compromise since TRIPS generally reinforces the rights of patent holders. The most progressive stance from the point of view of access to drugs would thus be to stick to the current legal framework which should be taken as a model rather than as a liability. This is also in accordance with India's own obligations under human rights treaties to foster better access to drugs over time.

The author can be contacted at: pcullet@vsnl.net

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