Patents Law: A Bitter Pill For Aam Aadmi

[Guest guest]

OPINION

A Bitter Pill For Aam Aadmi: Why is the government afraid to openly debate a

move that may quadruple drug prices?

RAHUL RAJKUMAR, AMY KAPCZYNSKI, ACHAL PRABHALA

While we are distracted by fallen gods and bickering billionaires,

decisions are being made behind closed government doors that could mean the

difference between life and death for millions of Indians. The issue is

India's patent law, and this government's decision to avoid any public or

parliamentary debate, to sneak in an ordinance (probably based on the bill

introduced by the previous regime) to adhere to a World Trade Organisation

(WTO) requirement that forces India to offer patents on medicines by

January 1, 2005. The new patent law may lead to sky-rocketing prices-the

cost of some medicines may double, triple, quadruple, or go even higher.

Indian pharmaceutical companies may suffer serious setbacks, as could

patients, for whom medicines already comprise an estimated 40-50 per cent

of treatment costs.

Patents are temporary monopolies granted by the government and, because

they block competition, they allow inventors a free hand with pricing. When

economists want evidence of just how high medicine prices could go after

patents are introduced, they look, for instance, at Pakistan-which allows

patents. A recent study showed that the antibiotic ciprofloxacin costs

eight times more in Pakistan than in India. Recently, India granted

exclusive marketing rights-similar to a patent-to Swiss company Novartis

for a medicine that works wonders on a rare form of cancer called chronic

myeloid leukaemia. Novartis is trying to use its rights to shut out local

manufacturers, who charged as little as Rs 9,000 per month for the

medicine, so that it can charge Rs 1,20,000 per month without competition.

As it is, few patients can afford the lower prices; so how can they

possibly pay more?

It was this that India had in mind in 1970, when it did away with

colonial-era patents on medicines. In part, because of this decision, India

became the world's biggest-and often cheapest-producer of generic

medicines. Companies like Cipla and Ranbaxy have taken the world by

storm-slashing the cost of a year's supply of AIDS drugs from $10,000 to

$140. This has made it possible to treat AIDS in India, and other poor

countries-and, through treatment, to turn a death sentence into a

manageable chronic disease, like asthma or diabetes. Now, in order to

comply with the WTO's trips agreement, India has to offer patents on

medicines. No one knows how many medicines could come under patents-but

many drugs developed in the last 10 years, and all those that may be

developed in future, are at risk.

Who stands to gain? The MNCs that have huge coffers and a head start in

r & d. As trade economist Jagdish N. Bhagwati noted, in the 1980s, software

and pharma MNCs muscled their way into the WTO. They had a prophetic

vision: if they could export strong intellectual property laws from the US

and Europe to the rest of the world, they could extend their monopolies to

new territories, and kill competition from emerging markets in one fell

swoop. US and European governments readily obliged their corporate patrons.

The result is an agreement that requires WTO members to adhere to minimum

standards of intellectual property protection.

The dominant logic of patents is: more protection = more revenue = more

innovation. But while profits for pharma MNCs will increase in Indian

markets, economists conclude that since this increase will be so

small-globally speaking-it will not spur local r & d. Indian patients will

just pay much more for medicines. But none of this has to happen. By being

shrewd about how it implements trips, India can comply with WTO rules,

protect the health of its constituents, and continue to serve as a model

for the developing world.

First, the new law must be changed so that India can refuse patents on

minor innovations. Why give companies huge profits for simply combining two

known compounds, or reformulating an old drug? Indian law has some curbs on

the scope of patents; these must be strengthened.Consider this. It has been

widely reported that there are 4,000 pharma patent applications in India's

" mailbox " , waiting to be examined. But according to the US government, only

about 250 new chemical entities have been discovered in the 10-year period

that the mailbox covers. Other applications are probably for variations on

known medicines-new formulations, dosages, etc. This blanket patenting-a

common practice in the US-can be prevented by a strict law that limits

patents to major innovations.

Just as importantly, the new law must streamline the 'compulsory licensing'

process, which allows the government to override patents on medicines when,

for example, they aren't reasonably priced. Lastly, the new law should also

maintain an important provision in the current Patents Act that permits

challenges to frivolous patent applications before they are granted. Unless

these steps are taken, red tape and costly lawsuits will tie India's

generic industry in knots. Though these proposals are consistent with

trips, they aren't included in the proposed ordinance. In fact, the

government has acted in near-secrecy, closeting the revision process to a

small ministerial group that has refused to invite public comment or

publish a working draft of the bill. Unfortunately, the UPA is poised to

push through almost the same, heavily criticised bill proposed last year by

the NDA.

Ironically, India has been a model of how to use trips flexibilities to

ensure access to affordable medicines. A humane, shrewd patent law was a

cornerstone of this commitment to public health. There can be no retreat

from this. For, at stake is the price of life. Can the Indian government

seriously think that it isn't high enough already?

(Amy Kapczynski is Yale University fellow in Law & Public Health; Achal

Prabhala is an ipr researcher; Rahul Rajkumar is a Yale Law School student.

Contact: essentialmedicines.org). From the December 27 issue of Outlook.

___________________

Rahul Rajkumar

E-mail: <rahul.rajkumar@...>