COVID-19 AND THE IP ISSUES OF DRUG DEVELOPMENT BY JANHAVI SAKALKAR & UJWAL NANDEKAR

INTRODUCTION

The outbreak of the novel Coronavirus (COVID-19) has resulted in unprecedented global health and economic crisis. The Governments of most of the countries are striving to curb the spread of the disease with the help of lockdown, while the largest economies of the world are endeavouring to find a cure for the virus. Hence, there are several innovations worldwide for the prevention and cure of COVID-19. These innovations then come under the ambit of patent protection, resulting in to a number of patent applications around the world. For instance, Remdesivir, an anti-viral drug which was initially developed as a cure for Ebola virus was found to be ineffective but it is seen to be as a possible cure for the coronavirus. Hence, the Chinese scientists in January 2020 filed a patent application covering the use of this drug. Later, Gilead, a pharmaceutical giant based in the United States and the maker of remdesivir applied for the ‘orphan drug’ status which granted the company an unjust monopoly over life-saving drugs. Later, the ‘orphan drug’ status was rescinded after a public outcry.

The world faces a dearth of PPE kits, N95 masks, ventilators, etc. Access to these would be a problem as most of the countries’ boundaries are shut down to control the spread of the disease. Along with the physical boundaries of the countries, their patent regime also would be the barrier for the availability of the pharmaceutical equipment.

WHAT IS PATENT PROTECTION?

Pharmaceutical giants and medical technology companies patent protect their products. If a drug/vaccine or any product is patent-protected, it would generally mean that the invention of the drug cannot be used commercially which would also include its distribution or import without the consent of the patent-holder. The invention that is protected by patent would give exclusive rights to the patent holders, extending control over the essential drugs and medical products. This results in the monopolisation which comes at the cost of human lives[1]. Monopolisation, in turn sets an exorbitant amount over the potential drug/vaccine which would have deleterious effects in the under-developed and developing countries.

For instance, 3M, a US based company has registered for over 400 patents on the N95 masks, this makes it difficult for its manufacturing and procurement around the world.

In the wake of COVID-19 pandemic, it is fundamental for both the Governments and the drug companies to get on an equal footing with regards to the drug development and its patent protection. Exclusivity of a life-saving drug to the patent-holder will not only prove detrimental to the public benefit in general, but also hamper the relations between various countries and organizations.

UNRAVELLING THE POSSIBLE SOLUTIONS
  1. PATENT POOLING

Patent pools can be defined as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties[2]. These pools aid in the administration and licensing patents and are managed by a Central Agency[3]. Patent pools help in minimising the cost of manufacturing drugs and hence prove to be extremely helpful in the developing countries. The Patents presented in the pool are made available for the licensing, anyone who wishes to obtain the license may apply for the same. After the application, the person may manufacture and sell the product.

MPP (Medicines Patent Pool) was founded in 2010 with a view to make medical innovations to prevent and treat diseases like HIV, tuberculosis, etc in the less developed and developing countries. MPP Another function of MPP is to negotiate the patent agreements with pharmaceutical companies that can facilitate access for generic manufacturers[4]. The Government of Costa Rica has initiated talks with WHO to constitute a voluntary pool of IP rights for the potential treatments of COVID-19. Their proposal has called for “free access or licensing on reasonable and affordable terms” of the resulting products[5].

MPP can accelerate the process of drug development for COVID-19 as it is beneficial for both pharmaceutical companies and public health. MPP offers royalty to the patent holders from different countries and provides them for a collaborative platform to develop the necessary products to combat the virus.

  1. COMPULSORY LICENSING

Compulsory licensing is when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself[6]. Compulsory licensing is dealt with at national level, i.e., Indian Patents Act, 1970 and at international level, the TRIPS agreement.

Chapter XVI of the Patents Act, 1970, Section 84-Section 92 deal with compulsory licensing.

Section 84 of the Patents Act. 1970 states that any interested party to procure compulsory license may apply to the Controller but only after the completion of three years after the grant of the patent. There are a few pre-requisites for the application, i.e., the invention that was patented earlier was not able to fulfil the requirements of the public, if the invention is unavailable to the general public at a reasonable cost and if it is not worked within India.

Section 92(1) states that the Central Government may grant Compulsory License in respect of any patent if the Government is satisfied that the specific patent would be of help in cases of urgency or public non-commercial use.  The Controller also takes into consideration the factors like the ability of the product for the attainment of public benefit, etc. The final discretion whether to grant the license or not lies with him. If the Controller grants the permission for Compulsory License, he shall endeavour that the products created with the help of patents are easily accessible to the general public.  Patentee in such a case shall be offered with a royalty rate fixed by the Controller.

As per Section 100(5), the Central Government may authorise certain Indian companies to make use of the patent for ‘the purpose of government’. Once the authorisation is made, companies could commence the manufacturing process and the royalties of the patent owners are negotiated. If any of the parties fail to reach an agreement, a reference to the High Court shall be made[7] and the Court would then fix a royalty.

Section 102 gives information regarding the Central Government’s right to acquire the inventions and patents. It states that the Central Government can acquire the patents with a view to fight the virus in the public interest. For this, a notification has to be published to the Official Gazette, and later the invention/patent and its rights shall be transferred to and vested in the Central Government.

It is necessary to prove the reasonable requirement of the drug for the procurement of compulsory license. In the case of Lee Pharma, a Hyderabad based Indian pharma company, the company filed an application for compulsory license for the patent with a view to protect AstraZeneca’s diabetes management drug Saxaglipti. But the Court dismissed the application on the grounds that the pharma company was not successful in explaining the reason for the requirement of public with regards to the drug, along with the requirement of Saxagliptin compared to the other DPP-4 inhibitors[8]. Therefore, it is proven that without the fulfilment of basic requirements, it is not possible to grant the compulsory license. This prevents from diminishing the patent-holder’s rights. Compulsory licenses could be granted without the consent of the patent holder if the requirements are fulfilled.

Article 73 of the Trade-related Intellectual Property Rights (TRIPS Agreement) mentions the security exceptions. It is important to make use of Article 73(b) states that for the protection of its essential security interests, it is necessary to prevent a member for a taking any action[9], this would help to suspend the enforcement of any IPR that would prove to be a barrier to acquire the essential products and equipment, necessary to contain the spread of the disease.

WORLDWIDE PRE-EMPTIVE MEASURES

Proactive steps are undertaken by many of the countries in order to counter the issue of monopolistic control over the medical equipment and products. With a view to this, the provisions relating to Compulsory Licensing have been invoked by many countries.

German Government had declared a state of emergency and also passed a legislation called, ‘Prevention and Control of Infectious Diseases in Humans Act’. This legislation aids in granting the power to issue Compulsory License under the existing German Patents Act to Ministry of Health. Under the new legislation, it is also possible for the manufacturers who do not have the required license to use patents for face masks or PPE will be able to manufacture of the Health Minister finds it necessary to boost the production. It is also known that the patent rights relating to ventilators could be misappropriated in order to save the lives of COVID-19 affected patients.

Israel also issued compulsory licenses to AbbVie Inc’s Lopinavir/Ritonavir (Kaletra). This drug is undergoing tests for determining its effectiveness in curing the novel coronavirus. The license would now enable the import of Kaletra drug. Thus, AbbVie has become the first big drug maker to drop its patent rights.

The Government of Chile, in March 2020 invoked Compulsory Licensing with an intention for the easy access to life-saving drugs and other necessary medical products, etc.

CONCLUDING REMARKS

Drug companies around the world have cited the need to protect their IP as the creation of drug costs them a humongous amount of time and expense. With the governments resorting to the Compulsory Licensing regime, the pharmaceutical giants are unlikely to plough money into the Research and Development. Therefore, the Government should consider in creating an innovative policy to harmonize the processes of procurement of drugs as well as the invention of the same.

FOOTNOTES

[1] Patents vs. the Pandemic, PROJECT SYNDICATE, https://www.project-syndicate.org/commentary/covid19-drugs-and-vaccine-demand-patent-reform-by-joseph-e-stiglitz-et-al-2020-04

[2] Patents Pools and Antitrust, WORLD INTELLECTUAL PROPERTY ORGANIZATION, https://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf

[3] Justice Pratibha M. Singh, Needed: A pandemic patent pool, THE HINDU, May 01, 2020.

[4] Patent Pooling: A boon amidst COVID-19 pandemic, LEXOLOGY, https://www.lexology.com/library/detail.aspx?g=ba09f470-2269-4ae3-92c0-c52f769633ac

[5] Jorge Contreras, Patents and Coronavirus- A role for patent pools?, (April 13, 2020), http://infojustice.org/archives/42242

[6] Compulsory licensing of pharmaceutical and TRIPS, WORLD TRADE ORGANIZATION,  https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm.

[7] INDIAN PATENTS ACT, 1970, Section 103(6).

[8] Tanu Goyal, Compulsory Licensing, MONDAQ, https://www.mondaq.com/india/patent/617670/compulsory-licensing

[9] TRIPS: Part VII-Institutional Arrangements; final provisions, WORLD TRADE ORGANIZATION, https://www.wto.org/english/docs_e/legal_e/27-trips_09_e.htm.

 

DISCLAIMER: The views and opinions expressed are that of the authors and do not necessarily reflect that of katcheri.in.

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