As India battles the worsening second wave of Covid-19 and with a shortage of vaccines, which are considered as the only possible way to stop this deteriorating menace, the talks of compulsory licensing are buzzing around. In this article, we will be discussing the concepts like patents while concentrating on compulsory licensing and its need in the current scenario.
Basic Principles of Patent
According to WIPO a patent is a culmination of exclusive rights granted by the government for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem. These rights provide the inventor, the exclusive rights to sell, distribute, reproduce his invention for the period of 20 years. The main aim behind the enactment of patent law is to attract more contribution in the respective fields by bestowing absolute rights to the inventor for the invention and the benefits arising out of it.
However, there is a way by which the controller general of the patent office can allow a third party to manufacture, use, and distribute a patented product without the permission of the patent owner, such an option is called compulsory licensing.
Compulsory Licensing: Need of the hour?
We already know about the Patent of an invention and how it limits a third party to use it without the authorization of its owner or inventor. However, there is a way by which the patent office can allow a third party to manufacture, use, and distribute a patented product without the permission from the patent owner, such a concept is called compulsory licensing.
The concept of Compulsory licensing is recognized under chapter-16 of Patent Act, 1970 and section-31 of the TRIPS Agreement, which clearly states that “the compulsory licensing means authorizing a third party to reproduce, use or distribute a specific product or use a specific process which has been patented, without the need of the permission of the patent owner.” The section also put forth certain conditions under which compulsory licensing can be granted, the conditions are-
if the public at large has been reasonably unsatisfied with patented invention, if the invention is not available at an affordable price, and if the invention is not worked in the Indian territory. The compulsory licensing can also be granted in cases such as "national emergency" or "extreme urgency" or in cases of "public non-commercial use".
We know, the process of making medicines involves a lot of research and development. This requires a significant amount of funds which eventually reflects in the prices of those life-saving medicines. Thus, patents help these companies to recover the amount that they spend in making a medicine. The University of Oxford along with AstraZeneca which developed the vaccine candidate ‘Covishield’ has patented the technology used by the vaccine. The university has voluntarily licensed the Serum Institute of India to manufacture its vaccine. The Indian vaccine candidate ‘Covaxin’, which is developed by Bharat Biotech and the Indian Council for Medical Research is patented by these institutions.
While India currently faces a shortage of both of the two vaccine candidates and other essential medical supplies, the government needs to think about invoking compulsory licensing, considering the situation as National Emergency. Under section-92 of the Indian Patent Act, the government has the power to invoke compulsory licenses to expedite public use. The ongoing situation worsened by the second wave, assuredly qualifies as a National Health emergency under the provision and therefore can act as a powerful tool to curb the crunch of insufficient supply of critical drugs like Remdesivir, Tocilizumab, and Vaccines.
Is Compulsory Licensing all good?
The concept of compulsory licensing is not a new one in our country. India granted its first compulsory license in 2011. In Bayer Corporation Vs. Natco Pharma Limited Delhi High Court (2011) the two main contentions of the defendants were: -
1. There is a reasonable requirement of this drug to the public
2. It is not made available at a reasonable and affordable price.
In this case, the plaintiff, Bayer Corporation was granted a patent on a pharmaceutical product known as “Nexavar” which is used for the treatment of patients with advanced stages of kidney and liver cancer. The defendant, Nacto Pharma applied for compulsory licence and was subsequently granted to make the drug under the Bayer’s patent right on the ground that reasonable requirement of the public and it was not made available at reasonable and affordable price. The court granted the license while stating that “the compulsory license was “solely for the purpose of making, using, offering for sale and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the territory of India''. This decision brought down the sky-high price of that drug from 2 lakh per monthly dose to 8 thousand per monthly dose.
Though compulsory licensing would prevent the pharmaceutical companies from making huge profits out of such heavy demands of medical supplies, it would not take away their rightful due. The companies will be getting fees for licensing their Patent rights. Such licenses need not be granted for long durations, a license for 6 to 12 months would be sufficiently helpful for the country to stock up its inventory of critical drugs.
While the introductory prices of the two vaccines candidates in India namely, Covishield (Rs.400-600) and covaxin (Rs.600-1200) are already on higher sides, it remains a big question as to how a common man already burdened with shooting prices of daily commodities, would be able to afford it in a private hospital. Foreign countries like Israel and Canada have also invoked compulsory licensing of some life-saving drugs to increase the availability and affordability.
India is in such a situation where lives are lost by minutes and hours, affordable and ramped-up production of vaccines and certain drugs are the only way we have that can contain the situation. The clock is ticking, and lives are at greater risk with every moment. It's high time now that the government must exercise the power it has under The Patents act, 1970, to save people who are in dire need of vaccines.