Compulsory patent licensing: Govt must come clean on the issue or face another Rahul jibe, phirangiyonki sarkar

That the Indian government has surreptitiously reassured the US Indo Business Council that compulsory licensing will not be issued to save in emergencies and for non-commercial purpose, is alarming to say the least.

The UPA II courageously allowed compulsory licensing of the kidney cancer drug patented by the German drug major Bayer when it was being made available in India at an unconscionably high price of Rs 2.88 lakh per month. An intrepid Hyderabad based generic drug company Natco Pharma applied and got the compulsory license to manufacture the same drug and make in available at a vastly reasonable price of Rs 8,800 per month.

 Compulsory patent licensing: Govt must come clean on the issue or face another Rahul jibe, phirangiyonki sarkar


The Controller of Patents initially awarded a 6% royalty to Bayer which was slightly hiked by the Supreme Court on appeal. One thought there would be encore galore of the kidney cancer drug initiative what with cancer assuming epidemic proportions in the country often necessitating sale of properties at a distress price by the indigent.

Brazil has been using the compulsory licensing power to the hilt, what it being afflicted with the AIDS menace. Incidentally compulsory licensing is WTO compliant under its TRIPS regime. In the event, India’s capitulation to the US pressure groups is inexplicable. The Modi government has rejected at least two compulsory licensing applications including the one by Lee Pharma to manufacture and sell at a reasonable price the anti-diabetic drug Saxagliptin the patent for which is held by the Swiss drug major AstraZeneca. These disconcerting developments lend credence to the story yet to be confirmed by the government that it is going soft on compulsory licensing.

Lee Pharma’s compulsory licensing application was rejected it seems with an apology of an excuse---the Patent office did not have statistics on diabetic population in the country in need of the patented drug. To be sure, a compulsory license can be issued only if the patent is not worked in commercial quantities in India at a reasonable price but statistics about the suffering has to be made available by the government ideally the Ministry of Ayush by mandating supply of statistics periodically by all hospitals both private and government.

Section 84 of the Indian patents Act, 1970 was consciously introduced to tame the rapacity of drug multinationals and to protect patient interest. It is a solemn law of the Parliament. It cannot be whittled down by the government of the day not even on the ground of attracting foreign direct investments into India. It is amazing that the opposition hasn’t raised a stink over this issue truly having a bearing on the nation’s health even while being obsessed with relatively non-issues. Better still, the government itself must come clean on the issue, and own up its mistake in being overzealous. Otherwise Rahul Gandhi may come up with another jibe----phirangiyonki Sarkar (government for MNCs).

Section 92 of the Patents Act also permits issuance of compulsory licensing to fight emergencies and epidemics. This is different from section 84 in its applicability in that it can be possibly invoked only when a national calamity is looming large. Has the government bartered away the rights of the Indian patients by tacitly watering down section 84 while tacitly retaining a tougher section to invoke? Those in the know aver that even invocation of section 92 to make critical lifesaving drugs at reasonable prices would be kosher because HIV, cancer and diabetes have in any case assumed alarming, epidemic proportions in India. Be that as it may.

The law of patent across countries is a fine balancing act---balancing the interests of the inventor with those of the consumers. Scientific inventions would dry up if an inventor is not given an opportunity to reap monopoly profits over a period of 20 years, the normal duration of a patent right. But at the same time, drugs critical for survival cannot hold patients to ransom which is why compulsory licensing was uniquely thought of for drugs.

In the world of electronics patents on FRAND (fair and reasonable and non-discriminatory) terms has been working reasonably especially in the mobile handsets sector. It is time the drug world came to a compromise by agreeing to license their patented technologies on FRAND terms to whoever wants it on payment of royalty. That would render the rather combative compulsory licensing regime redundant.

S. Murlidharan

Updated Date: Mar 14, 2016 15:52:24 IST