A Bitter Concoction

With the Rajya Sabha passing the Patents (Second Amendment) Bill on May 9, Indian pharma companies seem to have lost a crucial battle. Although Union commerce minister Murasoli Maran asserted that "all ambiguities have been removed and available flexibilities made use of to the maximum to protect the varied interests of our nation", the Indian pharma industry believes this presages the beginning of the end.

India is committed to introduce a product patent regime by 2005. Currently Indian law recognises process patents for drugs, meaning that a company with a patented product can only protect the process or route taken to formulate that drug, leaving another company free to develop it by another route. The new Bill ostensibly offers a host of benefits to patent-holding MNCs. The Indian industry believes that these go beyond the requirements of the Doha Declaration, the last WTO convention on TRIPS, and compromises public interest.

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 specialising in patent laws: "The Doha Declaration expects product patents to be recognised, but asserts primacy of public health over commercial interests." Under the provision of a compulsory licence 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 arranged for supply of generic drug, ciprofloxacin.

The Doha Declaration does not contemplate a right to oppose or hold elaborate inquiries for grant of compulsory licences. But the present Bill is burdened with conditionalities 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 patents. Think of endless court proceedings while a plague spreads furiously!

Dr Hamied argues that in a country with over 60 mn diabetics, 50 mn asthmatics, 80 mn heart patients, where, by World Bank figures, there will be 35 mn 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. India can't afford monopolies.

The storm has built up in the face of hard evidence of monopolistic practices of MNCs. The harshest experiences are in Africa where over two million die of AIDS every year. Combivir, the triple-cocktail of drugs used for its treatment, is patented by Glaxo SmithKline. A year's supply costs $10,000-12,000. Obviously, not even a fraction of patients can afford the drug. Ghana and Uganda requested GSK to allow the import of the generic drug that would cost under 5 per cent of its cost which GSK refused. Some 39 MNCs filed a suit to prevent import of drugs from other sources. Appeals from agencies like UNAIDS, World Bank, Oxfam, Medecins Sans Frontieres (MSF) fell on deaf ears. In 2001, Cipla made an open offer to supply it at $350. It threatened to invoke the compulsory licence. Aurobindo Pharma made an offer of less than $300. Glaxo then reluctantly slashed prices down to $400.

Says Hocine Sidi Said, CEO, Pfizer India: "Protection is a just reward for our invention. " It takes years of work by many scientists and loads of money to come up with a new molecule. It takes a patented molecule about a decade of tests to reach the market. These molecules should provide the company with enough money to fund the next invention.Said argues that there would be no discovery if it wasn't for the MNCs who are looked at as predators. Said says that at any given point of time there are six to seven generations of drugs available and that there are substitutes for most. Doctors exercise choice over what to prescribe even currently in India, when medicines are so cheap. No MNC would price itself so high that it has to exit. It would be suicidal to charge international prices, he says.

This is for existing products but what about those to come? Said says that even if India changed to product patents, it would take about half a century post-TRIPS for reasonable substitutes for most drugs to disappear. Pfizer, he assures, definitely has no issues with the country's right to invoking a compulsory licence whenever required, but only seeks protection for its work.

"The Bill has ignored Doha completely," says Zaveri, "and has misinterpreted TRIPS." India must look at developing countries with product patent regimes, he feels, and recommends that our parliamentarians read the US law.