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Pharmaceutical Patents and Access to Essential Medicines

Praveen Nagar analyzes the case of Roche v. Cipla in the light of access to essential medicines in India where poverty prevents people from purchasing expensive patented drugs.
Access to medicines is a contentious issue especially in a developing country like India where poverty prevents people from purchasing expensive patented drugs. The generic producers provide for cheaper options of life saving drugs compared to the patented drugs and prove critical for easy availability at affordable rates.

On January 1, 2005 India conformed to the Trade Related Aspects of Intellectual Property (TRIPS hereinafter) provisions of the World Trade Organisation (WTO hereinafter) amending its laws to fulfill international obligations. The amendment provided for product patents barring companies from producing cloned drugs protected by patents as opposed to when only process patents were allowed under the Indian patent law whereby, a patented drug could be manufactured by employing a different process. The reasoning behind the earlier provision was to keep it relaxed, and allow generic producers to manufacture cheaper drugs.

India's pharmaceutical industry has now been pushing for invocation of Compulsory Licensing for expensive drugs in India. TRIPS agreement provides for compulsory licenses conditional upon the patent laws of a country. The Indian Patent Act, 1970 contains comprehensive provisions dealing with the subject of compulsory licenses in chapter XVI under Section 82 to Section 98 whereby, the authorities may grant compulsory licenses to any person interested who makes an application incase when the patented invention does not satisfy the reasonable requirements of the public or when it is not worked in the territory of India or when the availability of the invention to the public is hindered by its price etc.

It is for this reason that La Roche brought an action against Cipla in the High Court of Delhi. However, the Court while refusing La Roche's plea for an interim injunction ignored its patent rights and laid emphasis on the implications of such an injunction and the harm it can do to the public dependant on such essential medicines. Cipla, while justifying its plan to launch the affordable version of Tarceva in the domestic market said that it would sell the generic version at Rs. 1600 per tablet, one-third the price of its original market value.

Most of the applications for compulsory licenses are for the latest cancer drugs which are already launched in the market by Multinational companies under patent protection. These drugs are often priced in the same bracket globally. For example, Tarceva is priced at Rs. 1.5 lacs for a month's dosage, while Novartis AG markets Glivec at about Rs. 1.2 lacs for a five week course. Similarly, Pfizer's drug, Sutent is likely to cost at par with its International price of $4,000 for a six week dosage and is awaiting a patent grant in India.

In a country like India, access to these medicines is a serious issue and when such essential drugs can be manufactured at one-third or one-fourth the price of its original market value by the generic producers, it should be given due consideration. Although, this approach raises some serious questions on India's international obligations under the TRIPS agreement and bring ambiguity in the India patent laws.

Access to essential medicines has been discussed at length in a recent order of the Delhi High Court in the case of F. Hoffman-La Roche Ltd. and Anr. Vs. Cipla Limited where the court refused to grant an interim injunction to La Roche (Plaintiff hereinafter) and permitted Cipla (defendant hereinafter) to market its generic version of lung cancer treatment drug 'Erlocip', a copy of the plaintiff's patented drug 'Tarceva' in public interest. This order is one of the most crucial judicial pronouncements relating to patents in India after its accession to TRIPS standards in 2005 as the court largely based its order on the 'balance of convenience' principle rather than statutory patent law in India.

The Court observed that barring cheaper copies of such life saving drug will cause irreparable harm to the patients suffering from the fatal disease. Furthermore, the Court noted that the degree of harm in such eventuality is absolute and the chances of improvement of life expectancy; even chances of recovery in some cases would be snuffed out altogether, if injunction were granted, such injuries to third parties are un-compensatable. Moreover, in its order, the court considered that the between two competing public interests, that is, the public interest in granting an injunction to affirm a patent during the pendency of an infringement action, as opposed to the public interest in access for the people to a life saving drug, the court held that the balance has to be tilted in the favour of the latter. In addition, the court emphasized that the injury to the public while depriving them of the defendant's product, may lead to shortening of lives of several unknown persons, who are not parties to the suit, and damage cannot be restituted in monetary terms, for it being uncompensatable and irreparable.

The Ratio Decidendi laid down by the Delhi High Court follows that "Courts while deciding applications seeking interim injunction, involving claims for infringement of patents especially when life saving drugs are involved have to strike a balance between the imponderables such as the likelihood of injury to unknown parties and the potentialities of risk of denial of remedies."

This case deals with one of the most significant issues relating to patents and is being seen as a test case on how the Indian courts would read the patent law and rights granted under it versus the public health concerns, in a situation when a patent has already been granted in India.

However, this case is still under trial before the Delhi High Court and the final judgment may go against Cipla if a case is proved against it for infringing plaintiff's exclusive rights granted under the Indian patent laws. Moreover, the Delhi High Court has secured plaintiff's interests by directing the defendant to maintain the accounts of the sale of its product Erlocip and to file quarterly statements of account before the court.

PRAVEEN NAGAR is an associate with Titus & Co. at its Delhi office and has done an LL.M in Intellectual Property Law from the University of Manchester, U.K.
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