Tuesday, January 18, 2005
India's patent choices
Almost unnoticed, India's pharmaceutical patent regime changed in 2005 from recognizing only process patents to recognizing product patents as well, in order to meet TRIPS commitments. This is a move that is going to hurt nearly everyone in the short term, especially given that most Indians do not have medical insurance.
The new patent regime cleared by the Manmohan Singh government to meet World Trade Organisation (WTO) deadlines will raise the price of life-saving drugs by at least 10 to 20 times the current price. An essential drug to treat cancer that currently costs Rs 9,000 to Rs 12,000 will spiral to Rs 1.20 lakhs after the product patent regime's impact is felt in the market. Patients suffering from cancer, HIV/AIDS and heart diseases will be most affected by the new regime as drugs for these ailments will be affected in the first term. Prices of all life-saving drugs, however, will also be increased over a longer span of time as the government has reportedly not adopted a "safety mechanism" in the Patents (Amendment) Ordinance to protect the interests of the common people. The government, which has dismissed these fears as "misplaced", has been unable to convince experts in the country who are strongly of the view that the new "product patent" regime will prove disastrous for Indians.
In a major study carried out by the Centre for Study of Global Trade Systems and Development, it has been indicated that the prices of drugs for even ailments like hypertension, strokes, ulcer, depression and osteoporosis will go up under the new regime to equal international prices. For instance, the medicine Prilosec, used to treat ulcers, currently costs $2.45 in India as against $105.50 in the US. The impact of the government's measure will soon raise the price of this particular drug to equal US prices.
The New York Times latches on to India's changed patent regime in an editorial piece published today.
India has become the world's supplier of cheap AIDS drugs because it has the necessary raw materials and a thriving and sophisticated copycat drug industry made possible by laws that grant patents to the process of making medicines, rather than to the drugs themselves. But when India signed the World Trade Organization's agreement on intellectual property in 1994, it was required to institute patents on products by Jan. 1, 2005. These rules have little to do with free trade and more to do with the lobbying power of the American and European pharmaceutical industries.
India's government has issued rules that will effectively end the copycat industry for newer drugs. For the world's poor, this will be a double hit - cutting off the supply of affordable medicines and removing the generic competition that drives down the cost of brand-name drugs.But there is still a chance to fix the flaws in these rules, because they are contained in a decree that must be approved by Parliament. Heavily influenced by multinational and Indian drug makers eager to sell patented medicines to India's huge middle class, the decree is so tilted toward the pharmaceutical industry that it does not even take advantage of rights countries enjoy under the W.T.O. to protect public health.
In November 2001, members of the World Trade Organization agreed that countries can issue compulsory licenses to permit generic production of patented drugs without the patent holder's agreement in order to protect public health, at home or abroad. But under the Indian decree, getting a compulsory license would be slow and difficult; each application would face a fight from multinational drug firms and the governments that do their bidding. India should adopt laws that expedite compulsory licenses, including allowing challenges to proceed after production begins instead of holding it up. In addition, India must close an important loophole affecting the sick overseas: under the current rules, Malawi, for example, could not import from India an inexpensive version of a medicine that is not under patent in Malawi. This needs to be changed.
Industry lobbyists managed to insert two noxious provisions in the decree that go well beyond the W.T.O. rules. The decree would limit efforts to challenge patents before they take effect. Also, it is uncomfortably vague about whether companies could engage in "evergreening" - extending their patents by switching from a capsule to tablet, for example, or finding a new use for the product. This practice, a problem in America and elsewhere, extends monopolies and discourages innovation.
While some drugs - those that existed before 1995 - will always be off patent in India, some widely used drugs are at risk. So are new generations of much more expensive AIDS drugs that will soon be needed worldwide as resistance builds to current medicines. If the decree is not changed before Parliament approves it, it will be very difficult for India to supply them. India's parliamentarians must keep in mind that this arcane dispute is actually a crucial battleground for the health of hundreds of millions of people in India and worldwide.
I cannot begin to emphasise the need for everyone in India to be more cognizant of this change. Not only does it hurt Indians (both poor and rich) badly, but it will hurt people in other developing countries too. While I do agree that innovation needs financial incentive to occur and safeguarding intellectual property is a good idea within limits (this will also benefit Indian pharma companies like Ranbaxy and Cipla), one must be very careful while twiddling with rules concerning health and life saving drugs. The Indian govt's claim that 97% of the drugs available in India are off-patent anyway is probably true, but is absurd nevertheless. Try saying that to someone who needs a medicine to save his life from the remaining 3% of drugs and can't afford to pay for it.
I understand this a very dicey issue and I certainly have no solutions to offer in terms of balancing incentives for pharma companies to innovate and the health of people in developing countries, especially the poor. Maybe a national health insurance system is the answer, but how will the govt pay for it? Who can afford to pay for drugs whose prices may increase 10-fold and more? I think it would be wise for the govt to slow down a bit and think about some solutions instead of forcing the patent change through a presidential ordinance.
The new patent regime cleared by the Manmohan Singh government to meet World Trade Organisation (WTO) deadlines will raise the price of life-saving drugs by at least 10 to 20 times the current price. An essential drug to treat cancer that currently costs Rs 9,000 to Rs 12,000 will spiral to Rs 1.20 lakhs after the product patent regime's impact is felt in the market. Patients suffering from cancer, HIV/AIDS and heart diseases will be most affected by the new regime as drugs for these ailments will be affected in the first term. Prices of all life-saving drugs, however, will also be increased over a longer span of time as the government has reportedly not adopted a "safety mechanism" in the Patents (Amendment) Ordinance to protect the interests of the common people. The government, which has dismissed these fears as "misplaced", has been unable to convince experts in the country who are strongly of the view that the new "product patent" regime will prove disastrous for Indians.
In a major study carried out by the Centre for Study of Global Trade Systems and Development, it has been indicated that the prices of drugs for even ailments like hypertension, strokes, ulcer, depression and osteoporosis will go up under the new regime to equal international prices. For instance, the medicine Prilosec, used to treat ulcers, currently costs $2.45 in India as against $105.50 in the US. The impact of the government's measure will soon raise the price of this particular drug to equal US prices.
The New York Times latches on to India's changed patent regime in an editorial piece published today.
India has become the world's supplier of cheap AIDS drugs because it has the necessary raw materials and a thriving and sophisticated copycat drug industry made possible by laws that grant patents to the process of making medicines, rather than to the drugs themselves. But when India signed the World Trade Organization's agreement on intellectual property in 1994, it was required to institute patents on products by Jan. 1, 2005. These rules have little to do with free trade and more to do with the lobbying power of the American and European pharmaceutical industries.
India's government has issued rules that will effectively end the copycat industry for newer drugs. For the world's poor, this will be a double hit - cutting off the supply of affordable medicines and removing the generic competition that drives down the cost of brand-name drugs.But there is still a chance to fix the flaws in these rules, because they are contained in a decree that must be approved by Parliament. Heavily influenced by multinational and Indian drug makers eager to sell patented medicines to India's huge middle class, the decree is so tilted toward the pharmaceutical industry that it does not even take advantage of rights countries enjoy under the W.T.O. to protect public health.
In November 2001, members of the World Trade Organization agreed that countries can issue compulsory licenses to permit generic production of patented drugs without the patent holder's agreement in order to protect public health, at home or abroad. But under the Indian decree, getting a compulsory license would be slow and difficult; each application would face a fight from multinational drug firms and the governments that do their bidding. India should adopt laws that expedite compulsory licenses, including allowing challenges to proceed after production begins instead of holding it up. In addition, India must close an important loophole affecting the sick overseas: under the current rules, Malawi, for example, could not import from India an inexpensive version of a medicine that is not under patent in Malawi. This needs to be changed.
Industry lobbyists managed to insert two noxious provisions in the decree that go well beyond the W.T.O. rules. The decree would limit efforts to challenge patents before they take effect. Also, it is uncomfortably vague about whether companies could engage in "evergreening" - extending their patents by switching from a capsule to tablet, for example, or finding a new use for the product. This practice, a problem in America and elsewhere, extends monopolies and discourages innovation.
While some drugs - those that existed before 1995 - will always be off patent in India, some widely used drugs are at risk. So are new generations of much more expensive AIDS drugs that will soon be needed worldwide as resistance builds to current medicines. If the decree is not changed before Parliament approves it, it will be very difficult for India to supply them. India's parliamentarians must keep in mind that this arcane dispute is actually a crucial battleground for the health of hundreds of millions of people in India and worldwide.
I cannot begin to emphasise the need for everyone in India to be more cognizant of this change. Not only does it hurt Indians (both poor and rich) badly, but it will hurt people in other developing countries too. While I do agree that innovation needs financial incentive to occur and safeguarding intellectual property is a good idea within limits (this will also benefit Indian pharma companies like Ranbaxy and Cipla), one must be very careful while twiddling with rules concerning health and life saving drugs. The Indian govt's claim that 97% of the drugs available in India are off-patent anyway is probably true, but is absurd nevertheless. Try saying that to someone who needs a medicine to save his life from the remaining 3% of drugs and can't afford to pay for it.
I understand this a very dicey issue and I certainly have no solutions to offer in terms of balancing incentives for pharma companies to innovate and the health of people in developing countries, especially the poor. Maybe a national health insurance system is the answer, but how will the govt pay for it? Who can afford to pay for drugs whose prices may increase 10-fold and more? I think it would be wise for the govt to slow down a bit and think about some solutions instead of forcing the patent change through a presidential ordinance.
