By KM Gopakumar
Commerce minister Piyush Goyal had recently said that data exclusivity could help attract R&D investments in the pharmaceuticals sector. However, data exclusivity to originator firms could facilitate evergreening as it would delay entry of generic medicines, explains KM Gopakumar.
l The danger in data exclusivity
Allowing data exclusivity would prevent the drug regulator — Central Drugs Standard Control Organisation — from granting marketing approval for generic medicines by relying on the safety and efficacy data of originator companies. Generic firms would thus be compelled to produce their own data through clinical trials to obtain marketing approval during the data exclusivity period. Clinical trials are costly and time-consuming. Even after the period of patent protection has expired, continued protection through data exclusivity would prevent or delay entry of generic drugs at affordable costs.
l Why IP reform is cause for concern
The Patents Act reform is being undertaken as part of ease-of-doing-business measures by facilitating easier acquisition of intellectual property (IP) rights. Such exercises are also carried out to accommodate demands from developed nations, especially in light of free trade agreement (FTA) negotiations with the USA and the European Union (EU). News reports quote the minister stating “We are focused on data exclusivity” as the “last missing link” before India could attract significant R&D inflows. Data exclusivity has been a long-pending demand of the USA and EU. This policy change could facilitate evergreening and tilt the balance in favour of IP holders, compromising the availability of affordable medicines and risking health security.
l Why Patents Act was amended in 2005
The Patents Act, 1970 had excluded product patent protection for pharma inventions, allowing Indian firms to produce any new molecules. Since the TRIPS Agreement imposed mandatory product patent protection, it was amended in 2005. It was feared this would eliminate Indian firms’ freedom to make affordable generic versions. Patent holders often abuse their patent monopoly by charging higher prices. Furthermore, patent holders could engage in evergreening practices—obtaining multiple patents on the same molecules with different expiry dates, often going beyond the 20-year period of patent protection, to delay generic entry.
l Evergreening restrictions
Various section, including Section 3(d) which allows patents on known molecules only if the patent holder can prove enhanced efficacy of the medicine, were introduced in 2005 to prevent evergreening practices. These have checked attempts to obtain multiple patents on numerous occasions. However, studies show that the Patents Office has issued many patents on known molecules. In the absence of an explicit ban, large pharma companies continue trying to obtain multiple patents. While there’s no comprehensive list of patented drugs, there are sufficient examples of high drug prices due to patent monopolies.
l Compulsory licensing norms
The amendments also revamped compulsory licensing and government-use provisions, enabling the patent office to issue licenses to generic firms to make affordable patented medicines. In 2012 one compulsory license was issued reducing the price of a cancer drug by nearly 97%—from ` 2.8 lakh to `8,800. That, however, led to much pressure against compulsory licensing, and no further licences have been issued. Even during the Covid-19 pandemic, government-use licences were not issued. Compulsory licensing is an important policy instrument to regulate anti-competitive commercial practices of large pharma MNCs.
l How FTAs can dilute safeguards
Developed countries use FTA negotiations to pressure India into undertaking obligations that dilute public interest safeguards and instead create policies in favour of their pharma companies. FTAs concluded with the European Free Trade Area (EFTA) and the UK contain provisions undermining public interest safeguards in the Patents Act. First, the UK FTA formally establishes that India accepts voluntary licensing as the preferred and optimal option for advancing access to medicines. This creates a burden of proof on India whenever it issues a compulsory license or government-use licence. Second, FTAs with EFTA and the UK obligate India to maintain confidentiality regarding information on patent working, such as quantity and sales turnover. Third, obligations on cooperation with the UK bears the risk of diluting the safeguards against evergreening.
The writer is a senior researcher and legal advisor at Third World Network
