Matching patent needs and drug pricing

Life is of vital importance and drugs play a crucial role in preserving life. In today's time, drugs not only act as curing agents but also help to control various medical conditions and form an important preventive mechanism against diseases. With the importance of drugs in the society, the manufacturers of drugs i.e., the pharmaceutical companies have also enjoyed a crucial role in development of human society. Along with this position comes the responsibility of developing new and better drugs and also ensuring that these are made available to every individual in the society who needs them.

Development of a new drug is a long and rigorous process which may take anywhere between 10 to 15 years this is further compounded by the high investment requirements with some drugs costing crores of rupees. In order to make development of drugs lucrative and at the same time to ensure all may benefit from the development of science, patency laws were developed. Under the Indian Patent Act, 2005 (Patent Act), a developer of a new drug is allowed exclusive right to sell the drug in the market for 20 years in exchange for disclosing full details of the new drug and the method of its production. Thereby, Patent Act ensures that a company is provided with 20 years of monopoly in the market to the exclusion of all other companies, however at the same time ensuring the development of science and flow of knowledge. If not for patency laws, it would not be worthwhile for companies (especially the small business houses) to invest in new inventions since they would not be able to prevent their competitors (especially the MNC giants) from immediately making use of their invention and producing them same on a larger scale using the resources at their disposal.

However, it is pertinent to note that under Section 3 of the Patent Act, only those developments or methods are protected that are a result of innovation and lead to enhancement of knowledge. A mere discovery of a new form, use or property of a known substance is not by itself patentable. A Swiss drug manufacturer had challenged this provision in the Patent Act in the Supreme Court of India, where the company claimed their drug Gleevec, was new formulation of an existing drug which warranted a fresh patent as it was a much developed version of the older drug. However, the Supreme Court rejected the patent application, on the grounds that beta-crystalline form of ImatinibMesylate (polymorph B) did not show any result of increased therapeutic effect. This is not one off incident in the Indian or the international pharmaceutical industry.

Since generations, pharmaceutical companies have structured their profits around obscure set of intellectual property rights and strategic policies, in order to earn higher profits.

We see a constant tussle between protecting the interest of consumers and ensuring the interest of pharmaceutical companies who are in a constant endeavour to earn higher profits. As a society is important for us to understand that though earning profits is an important part of making the pharmaceutical sector lucrative and attractive, the higher goal of proving better healthcare and safeguarding life must not be forgotten. If the drugs are not made accessible to the people who need them and we are unable to protect lives in spite of having the means to, then all development in science, medicine and society in general will become futile. To ensure drugs are made easily accessible to patients who need them, the National Pharmaceutical Pricing Authority (NPPA) implemented Drug Pricing Control Order (DPCO) which controls the pricing of drugs. The DPCO estimates the actual cost production of the drugs and if necessary visits the plant to verify all data. After the requisite investigation, a fair price is decided which ensures profitable returns to the companies and also ensures drugs affordable. However, DPCO does not regulate the prices of all drugs but only a certain important drugs are covered under this order, thus leaving out many other drugs through which consumers are exploited. The DPCO’s role comes after the drug patency is over, it cannot play any part in the drug pricing while the drug is under patency. Therefore, such an order should be incorporated to patent drugs as well, it should calculate the money invested by the company and ensure profitable returns as the company desires yet, pricing the drugs at economical prices so that the people to whom the drug is an essential commodity can afford it. It needs to protect the patients from being unable to purchase extravagant costly medicines.

It is high time we realize the importance of ensuring drugs are made accessible to all who need them. One of the solutions to this could be that the price of a drug be regulated through negotiations while granting of patency license, thereby ensuring availability of drugs to the people as well as to making sure the company earns its required profits. An authority should be appointed to evaluate whether the prices of the drug given by the company is reasonable and if not a fair price with the company’s can be decided along with the company. Further, yet another solution that could be considered is the abolition of a blanket 20 years patency and deciding on the patency period on a case to case basis.

Patency and commercial gains are necessary to attract innovation in the pharmaceutical sector, but this must not be at the cost of lives. We have to realize that unlike most other sectors, the direct consequence of corporate greed in the pharmaceutical sector has an adverse effect on the lives of people. People’s illness cannot be taken as a business opportunity in furtherance of commercial goals. As a society we must not only strive towards development but at the same time we must also ensure that every member of the society benefits from these developments and irrespective of what strata of the society they belong to.