Politics, pharma, patent, profit or the people of India? A case for compulsory licensing

The second wave of COVID-19 has exposed India’s lack of preparedness and its barebones medical infrastructure. Instead of treating patients back to health, doctors are forced to plead and scramble for critical drugs, vaccines and medical oxygen. As the government gasps for air, the courts are forced to firefight on its behalf. Unless millions of Indians are inoculated speedily and swiftly, thousands of lives will continue to be lost each day.

Compulsory licensing and voluntary licensing can be the actual vaccine in the arm we desperately need in this emergency situation.

Compulsory licensing, in case of “national emergency”, “public heath crises” or “extreme urgency”, is a weapon in the hands of the governments to supply its citizens with generic versions of patented drugs. We may do this either through domestic production or imports. Section 92 of the Indian Patents Act,1970 empowers the Central government, on its satisfaction, to make a declaration in the Official Gazette. After such notification, the Controller General of Patents, Designs and Trade Marks may grant licenses to applicants who are willing and can manufacture the said drugs. The Controller has the authority to decide the terms and conditions of such grant. Such a grant would be cost-effective for the public and advantageous for the patentee in the form of license fee.

Through compulsory licensing, the government can allow pharma manufacturers to produce the generic versions of patented medicines for the larger public good. In simple words, if the patented drug costs thousands of rupees, we can make its generic version at a fraction.

Compulsory licensing allows production of affordable drugs and increases availability and supply. In a national public health emergency where hundreds of lives are being lost every minute, critical expensive drugs like Remdesivir, Tocilizumab, Favipiravir etc., which are expensive and in short supply, should be licensed to increase production and improve affordability.

Let’s not presume that compulsory licenses would snatch the rightful due of the Big Pharma. It will not. Big Pharma would get a “reasonable advantage” in the form of license fee for its patent rights. However, it would prevent Big Pharma from making bumper profits in a public health emergency situation where people are dying for the want of essential drugs and vaccines. It would not allow Big Pharma to milk profits at the cost of lives of the poor and needy.

Such licenses need not be granted for long periods of time. A time limited grant of say 1-2 years should be made. This would increase production and help the nation stockpile critical drugs and vaccines. A time limited or production quantity limited license would help us tide over this crisis and save tens of thousands of lives.

Compulsory licensing is neither novel nor radical, but is prudent in the current scenario. Since 1994, scores of such licenses have been granted across the globe. India granted its first compulsory license in 2011, in case of the drug Nexavar, which is used in the treatment of liver cancer. This brought down its price from about Rs. 2 lakh per monthly dose to Rs. 8,000 per monthly dose. The Nexavar compulsory license was granted because of “not working” the patent, i.e. not manufacturing in India to the required extent (See Section 84 of the Patents Act).

In the present situation, when the world is fighting a pandemic, many foreign countries have also resorted to compulsory licensing. On March 24, 2020, Israel issued a compulsory license to import generic versions of Ritonavir. The Israeli Ministry of Health had realized that the antiretroviral drug could be a possible treatment for COVID-19 patients. The interesting part is that this was done not because of high price of the drug, but in order to increase its availability.

Canada, a wealthy nation, amended its Patent Act in March 2020 to allow quick issue of compulsory licenses. The amendment allows it to swiftly issue a compulsory license and negotiate a remuneration at a later stage.

Voluntary Licensing: A low hanging fruit?

Another very effective approach which the Government of India should resort to is of voluntary licensing. Covaxin has been developed with government efforts. The Indian Council of Medical Research (ICMR) and National Institute of Virology, Pune along with Bharat Biotech have collaborated to make Covaxin a reality. Hence, the government has the right to grant voluntary licenses so that its production can be ramped up and its cost brought down for poor people. Such a voluntary license will also ensure reasonable profits for Bharat Biotech in the form of license fees.

The government has taken a small but right step in this direction by issuing a voluntary license to Haffkine Bio-Pharmaceutical Corporation, an undertaking of the Government of Maharashtra. This, however, is only a half-step. The CEO of Haffkine Bio-Pharma has stated that it would take the company at least a year for the first jab to come out of their factory.

This is unacceptable. Since the Indian government is the owner of the Intellectual Property of Covaxin, it must proactively give voluntary licenses to all able entities to ramp up the production of Covaxin. Private players must also be encouraged to manufacture Covaxin under a license.

When lives are being lost by the minute, larger and more affordable production of vaccines and drugs can help arrest death rate and infection. Time is a critical factor. The more time we take the more lives we will lose. The government must hence fire all cylinders and make use of the Patents Act to ramp up production of critical drugs and vaccines. All hands should be on deck to save lives of our citizens. History will not forgive us for our poor response to this pandemic.

The author is a practicing lawyer at the High Court of Delhi. He can be contacted at anshsinghluthra@gmail.com.