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Relaxations On Intellectual Property Rights For Production Of Generic Drugs During Covid-19 Pandemic

The second wave of covid-19 or rather tsunami of covid 19, as observed by Delhi High Court has knock-down India's medical system. Appalling news from all over the country report deaths of numerous people due to a lack of medical facilities including lack of effective drugs used in treatment of Covid infected patients. As per medical professionals, the current situation can be improved if drugs in adequate quantity are available for all patients. Relaxations on intellectual property rights will allow production of generic drugs which is intended to be interchangeable with the innovator’s products.

Invoking compulsory license can be a way forward in tackling the issue related to the inadequacy of drugs in India's fight against Covid-19 cases. Compulsory license of drugs like Remdesivir, Tocilizumab and Favipiravir which are used to treat covid-19 can allow generic pharmaceutical companies to manufacture these important drugs to increase their supply and availability in market to meet the growing demand of these drugs.

Patents allow exclusive rights of the invention or the process used to create the invention and deny usage of the same to any other entity. Compulsory License is a concept under law, whereby a patent holder has to necessary allow other manufacturers, applicants to use the patent product or the process.

Article 31 under the agreement on trade-related aspects of Intellectual Property Rights (TRIPS), lays down that such authorisation of the use of patented products or process can be ordered by the government in case of a national emergency, where circumstances of extreme urgency exists and where such license is issued for non-commercial use. The government issuing compulsory license has to be decide upon reasonable remuneration to the Patent holder and validity of such license.

Under the Indian Patent Act 1970, section 84(1) allows for a compulsory license if reasonable requirements of the public are not satisfied at a reasonably affordable price. Section 92 of the Patent Act lays down a special provision for compulsory license on notification by the central government. The effect of this section is that during a national emergency, or in circumstances of extreme urgency, the central government is empowered to grant a compulsory license to the applicants seeking patent use. Section 92(3) also provides immunity to the applicants to use a patent without following the procedure of compulsory license laid down in section 87 of the act. Section 100 of the Act also empowers the central government to even take over the invention for purposes of government.

Recently, three-judge bench of Supreme Court comprising of Justices DY Chandrachud, LNagswara Rao and S Ravindra Bhat took Suo moto cognizance of the issue (In Re-Distribution of essential Supplies and Services During Pandemic) and asked the central government to consider the compulsory license of drugs like Remdesivir, Tocilizumab and Favipiravir which are used to effectively treat covid-19 patients.

Supreme Court asked the Centre government to invoke section 92 of the patent act to issue Compulsory License with terms and conditions of these patented drugs. Justice Bhat observed that countries like Germany, France and Canada have resorted to the tool of compulsory licenses when it comes to essential drugs used to treat covid-19 patients. Justice Bhat also cited example of Bangladesh which produces a generic drug of Remdesivir which is now being exported to many countries. Government of Jharkhand has also requested permission to import Remdesivir from Bangladesh.

In an order passed by the division bench of Delhi High Court in Rakesh Malhotra v. Government of National Capital Territory of India, the hon'ble court opined that a very strong case for grant of the compulsory license is made out. However, the patent holders' interest should be kept in mind. They observed that it upon investment and hard work of patent holder that such medicines are created in the first place.

They pointed out that patent holders should ramp up their production capabilities on a war footing basis. The patent holders should also be encouraged to give out voluntary licenses to other manufacturers of the required drugs. If such efforts are not beneficial to safeguard the lives of people, then there exists no other option but to grant compulsory license at an adequate license fee to prevent the death of numerous numbers of people.

India has been a harbinger for granting compulsory license at TRIPS negotiations and this is the most suitable time for implementation of law pertaining to a compulsory license. Nearly, a decade ago, India laid down a precedent by granting compulsory license to Natco of a patented drug Nexavar by Bayer Corporation for Germany. The patented drug was used to treat kidney cancer. A compulsory license was granted to Natco because Bayer's patented drug was not fulfilling the reasonable requirement of the public at an affordable price.

Following a decade old precedent, Indian generic drug producer, Natco Pharma Limited once again has applied for a compulsory license before the controller of Patents to manufacture the drug 'Baricitinib' used to treat COVID-19 patients. Natco Pharma has applied on grounds of section 92(1) read with section92(3) so that affordable production of the drug can be done along with improved availability of the drug.

The patent of the drug 'Baricitinib' lies with Incyte Holdings Corporation and was granted to them in the year 2018. It is argued by Natco pharma that production of the patented drug is not enough in the country and the drug has received emergency approval for its efficacy in treating Covid-19 patients. It is also argued by Natco that along with low production of the patented drug, it comes with exorbitantly high prices. Only 8870 tablets of the patented drug are produced in India in the year 2019 and only 8385 tablets in 2020. The average cost per tablet is INR 3230 and 14-day treatment turns outs to be around INR 45220 per patient. Natco pharma aims to sell the drug at INR. 15, 20 and 30 for 1mg, 2mg and 4 mg variants respectfully.

Even though compulsory license seems to be a viable option, however looking at the current situations there is a strong opposition against this method by giant pharmaceutical companies. They argue that active pharmaceutical ingredient (API) is not available in the country which is used in the manufacturing of the drugs. Therefore, even if technical know-how is given to generic drug producing pharmaceutical companies, they would not be able to improve conditions. These companies suggest government to invoke other options like section 47 of the patent act 1970, which allows the government to import patented drugs for their use. Further, the government can invoke section 26(B) of the Drugs Act to order manufacturers those who have the facilities to produce specific drugs.

India is one of the worst hit countries due to covid-19 and one of the major reasons for that is lack of medicines to treat patients. Relaxations of intellectual property rights will ensure enough production of generic drugs. For the interim period during which compulsory license operates, pharmaceutical companies will be paid royalties on sale of such drugs. However, Pharmaceuticals companies are not comfortable with the idea of compulsory license.

The world's developed nations on many fronts have lodged their dissatisfaction on using tools like compulsory license. This anxiety also reflects that even during the pandemic, which has caused deaths of millions of people, pharmaceutical companies are not ready to shed their profit generating mindset. The developed countries of the world are also shying away from their responsibility to relax the Intellectual property law regime during current situation. Thereby, again launching a debate between the global north and global south.

Looking at the current times, pharmaceutical companies (owing to their moral duty) should give out voluntary license to the companies who apply to them to manufacture the patented drug at reasonable terms. If the government is serious about the execution of ‘make in India’ scheme and ‘Atma Nirbhar Bharat’, they should compulsory license of the essential drugs which are used in the treatment of covid-19 patients. The government should not shy away from its duty and prevent loss of life even if it means granting temporary relaxations to the current Intellectual Property law regime.

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