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The Opinion

The Voyage of Compulsory Licensing in India: The Exigency of the Pandemic

By Aishwarya Anand and Raksha Bhandari

Photo by Burhan Rexhepi on Unsplash

Introduction

The Supreme Court of India has always unfailingly come to the aid of the citizens of India whenever the legislature and the executive have failed to fulfil their obligations. Commandeering the role of a policy maker and interpreter of law, the Apex Court of the country took suo motu cognizance of the humanitarian crisis following the “unpredicted” wave of COVID-19 pandemic on 22–04–2021 thereby, urging the Central Government to review its policies in the wake of national emergency in the country.

Taking into account the upsurge of the COVID cases in the country and the declining availability and the production of drugs like Remdesiver and Tolicizumab, more particularly used to cure COVID-19, the Apex Court opined the Central Government to explore the possibilities of granting of compulsory licenses for these drugs under the Patents Act, 1970. The Central Government while negating the possibilities to grant of compulsory licenses stated in its affidavit that it is engaging itself with global organizations at diplomatic level and therefore, it would be counter-productive at this stage to reach an amicable solution through granting Compulsory License.

The authors through this piece of research will argue as to why granting compulsory licenses for these drugs can be a shaft of light to fight the surge of COVID cases in India and that in the otherwise, the ways of requesting aid on diplomatic levels would only prove to be against the policies of Aatmanirbhar Bharat of the government and will be fatal to fight against the present and the impending third wave of COVID-19 in India.

The Impetus Behind the Writ Petition

The Supreme Court in the aforesaid Writ Petition, vide its order dated 30–04–2021 requested the Central government, if at all they can consider invoking its powers and jurisdiction under Sections 92, 100 and 102 of the Patents Act, 1970 (Act, 1970) for granting compulsory licenses to more indigenous manufacturers to augment the supply of COVID curing drugs in the country which has seen an upsurge to the extent of more than 4,00,000 COVID positive cases per day in the months of April and May, 2021.

To its effect, Section 92 of the Act enumerates three instances when the Central Government by way of an official gazette can grant compulsory license to the patents on public ground which are national emergency, extreme urgency or public non-commercial use. While sections 100 and 102 of the Act grants the Central Government the power to use inventions for its own purposes. The primary objective behind these provisions is to make an invention affordable to public thereby serving their interests.

Acknowledging the precariousness of the present situation in the country and the shortage of supply of the patented drugs that have proved beneficial for curing COVID patients, the Supreme Court solicited the Centre to adopt the compulsory licensing mechanism to augment their production; however, the order of the court is merely directional in nature and cannot bind the Centre.

The Escapist Assertions of The Centre

To the query put by the Apex Court, the Centre filed an affidavit wherein it has encapsulated its reasoning that M/s Gilead, U.S. which is the patent holder of Remdisivir has given licenses to seven manufacturers and 35 additional manufacturing sites in India. It was also contended that India was manufacturing 60,000 vials of Remdisivir prior to the recent surge and now the production capacity has been amplified to 2,00,000 vials per day. Further, as per the affidavit, the Ministry of Health and Family Welfare (MoHFW) is hopeful about procuring additional vials of the injection from other countries through its diplomatic relations. Statistically, India will receive 3 Lakhs doses of Remdisivir from Egypt by 1st week of June, 2021 and 1.25 Lakhs from USAID among other smaller doses from various aids.

The Need for Compulsory Licensing in the Country

At this stage, it would be pertinent to state that after taking into account factors such as delayed reporting, limited testing and unreported positive cases, India, on 30–04–2021 became the first country globally to report more than 4,00,000 positive cases of COVID-19 daily and the active number of cases surpassed the one million-mark in the first-half of April, 2021. Additionally, India in the months of April and May has shown a daily average of 3,00,000 COVID- 19 cases, wherein the active number of positive cases had crossed 25,00,000 by the end of April, 2021. Figuratively speaking, the total number of COVID-19 cases crossed one Crore in December, 2020. After the second wave struck India, the cumulative number of positive cases drastically increased and as per the data shown on the website of MoHFW, the total count of COVID positive cases has nearly reached three crores in an epoch of 5 months. Hence, it would not be out of place to state that nearly two crore people were affected by the second wave of the pandemic in India.

It stands undoubtedly that Remdisivir has proved to be an essential drug for curing COVID-19 in India and prima facie reading of the aforesaid conjectures suggests that the Central administration lacks proper facilitation of these drugs and fails to meet the demands of the public. There are several other reasons which make compulsory licensing an essential tool in the hands of the government. This section highlights why compulsory licensing is the need of the hour.

  • Article 21 of the Constitution of India: Considered to be most important facet of our constitution, the right to life has evidently evaporated during the second wave of COVID-19 in India. India is experiencing a fatality every two minutes and the lack of access to the COVID curing drugs has only added up to the worsening of the situation. This violates the right to life of the citizens of India and the right of health of the people affected by COVID-19. It is a situation of national emergency as there is constant surge in the number of deaths; the same has been acknowledged by the Indian judiciary as well the Indian Drugs Manufacturers’ Association. It is a matter of right of the people to receive proper infrastructure and requisite medicines in order to ensure their survival.
  • The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS): India is a signatory of the TRIPS Agreement since 1994 and according to Article 7, the main objective of the Agreement is to protect the rights of the patent holders and to promote innovation and technology between the producers. The same provision also suggests the dissemination and promotion should be such that there is economic and “social welfare”. Further, Article 8 of the Agreement allows the member nations to adopt such laws and measures that help in catering to public interests in areas of vital importance. The Doha Declaration was adopted in 2001 by the member nations wherein public health, access to medicines and research and development in this regard were given vital importance thereby, allowing compulsory licensing of medicines. The said provisions were incorporated in the light of need for public welfare in case there is national emergency which thereby, manifests the importance of access to medicines by people.
  • Unaffordable pricing of medicines: Owing to the COVID curing drugs being patented in other countries, there is shortage in their production of the same. There is black hoarding of these medicines which has further, led their procurement possible only to a certain section that is ready to pay extravagant prices. The Indian courts have set stringent standards of punishment for the black marketers, it unfortunately is not the only way to curb black marketing where the cost of a single vial of Remdisivir has peaked Rs. 70,000 at one instance.

Compulsory licensing will help in manufacturing of generic medicines which will be available in the market at low prices. It will help in putting a cap upon the prices of the medicines by inducing competition in the market and will further; increase the production of the same. The case of Bayer Corporation v. Natco Pharma Ltd can also be seen in a guiding light which insisted that compulsory licensing induces competition in the industry and thereby helps in lowering the prices of essential drugs in the market.

  • Global emergency: COVID has been declared a pandemic by the World Health Organization because it has affected a large section of population, globally. One of reasons why the Indian government is resisting adopting the compulsory licensing mechanism is because it would affect the Foreign Direct Investment in the country in near future. The US manifested its disappointment during the Bayers v. Natco case and Indian government at this point does not want to irk developed countries like the US. However, India having passed the highest number of global infections, it is imperative that the government takes steps that are necessary for safeguarding the Indian population. Many other countries such as Russia, Hungary, Israel etc. have also passed ordinances invoking the compulsory licensing mechanism and have allowed the production of generic medicines.

Conclusion

The Indian population has been hit hard with the second wave of the COVID- 19 and is facing execrable experiences. The only hope lies in proper and affordable medication and vaccination; however, there is shortage of the same. It is incumbent upon the government to safeguard their lives by providing them with the necessary infrastructure and the essential medical requirements. Even if the government is facing shortage of raw materials which the government claims is acting as a constraint in granting of licenses to the other manufacturers, compulsory licensing can create a mechanism which can help in augmenting the production of the medicines afterwards at reasonable rates and can help the government be prepared to fight if the situation worsens. Therefore, the government should wisely use its discretion and safeguard the health and lives of the people.

Authors’ Information:

Aishwarya Anand, Head and founder of Manu & Co.-Advocates & Solicitors (www.manulaws.in) and is a graduate of National Law University, Jodhpur. He can be reached at a.anand@manulaws.in and 097829–54559

Raksha Bhandari, Intern at Manu & Co.-Advocates & Solicitors and is a third year student at Institute of Law, Nirma University, Gujarat. She can be reached at bhandariraksha42@gmail.com and 077288–33998.

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The Opinion is a publication based on Medium. We publish short articles on social and legal subjects, providing an opportunity to the early writers who face trouble in finding people who can review, enhance, publish, and promote their pieces.

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