Drug Patent and Cost of Cure for COVID-19

A patent is one of the crucial forms of Intellectual Property Rights (IPRs) used in the pharmaceutical industry. There are other forms of IPRs available in India like Trademark, Industrial design, Geographical Indication and Copyright. In India, patent protection is in the Patents Act, 1970. The Patents Act, 1970 is structured substantially and guided from the U.K. Patents Act of 1949. After enhancement of the Patent Act, 1970 which recognized only the process patent, the cost of medicines started coming down and the availability of drug increased to a great extent, and Indian Pharmaceutical industry became export-oriented.

Whenever the amendments are made in India, it has to be to abided by the WTO obligations on intellectual property. Earlier, as per the provisions of this law, only process patents could be granted for inventions relating to food, drugs and chemicals. Later on, significant changes like provision of product patents and increase in the term of a patent to 20 years were introduced in the Indian patent law, after India signed TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement in 1995. At times the new law is not as per the requirements of the Agreement on TRIPS or has provisions significant to India, and at other times, it becomes contradicting with the TRIPS Agreement. This article includes the procedure of getting a patent in India as detailed in the Patents Act 1970. It also focuses on the demand for Compulsory Licensing by the Indian Government to make available and affordable Covid-19 vaccine.


Patents have a vibrant and diversified history in India. When India was colonized by the British, the new inventions produced by the inventors made them realized that these inventions done by them should not be copied or the methods used are not adopted by others. To save the interests of such inventors, the British rulers came up with the Patents and Designs, 1911. Subsequently, due to some of the substantial changes in political and economic conditions in the country, it became easy to enact a comprehensive law on any such subject which would ‘ensure that patent rights are not in accordance to the loss of the consumer or unfair to the trade or the industrial development of the country’.

As per the need of the hour, the Government appointed the Patents Enquiry Committee to review the procedure of the patents law in India during 1948 and the report was submitted in 1950. Due to recommendations made in the report was based on the U.K. Patent Act, the Act, therefore, could not be passed. In 1957, Justice Rajagopala Ayyanagar was appointed by the Government to come up with new recommendations and review the patent law in India advise the Government on some changes required to be made in the law therein. After the submission of the report by Justice Ayyanagar, there were some changes made to the Patents Bill 1965 that led to some discussions in Lok Sabha. Later, with various recommendations, finally, The Patents Act, 1970 came into force on April 20, 1972.

Indian Patent System

A patent is an exclusive right conferred on to an inventor to exploit his invention subject to the provisions of Patent Act, 1970 for a limited period.[i] During this span, the inventor is allowed to exclude anyone else from commercially exploiting his invention. The right of a patent is statutory and the said right stems from the statute, i.e. Patents Act.[ii] In 2000, few critical amendments took place, such as an extension of the term of a patent, subject matter of patents, and compulsory licensing system. Lately, also in 2005, there was a third amendment to the Act to introduce the product patent regime in a few sectors, including the pharmaceutical industry. There were some more changes made in the amendments that were the fee structure, penalty provisions, filing procedure, etc.

Effect of Product Patent

Under the product patent, the new product was granted for twenty years. Earlier when there was no provision of product patent, only process patents were granted for a new process of manufacturing an already familiar product or for manufacturing a new product. Indian pharmaceutical industry was helped due to development made in the generic drugs without having a fear of infringement of a patent. It helps to create a generic drug available and affordable to save millions of lives. The introduction of product patents is considered as a significant incentive for developing new medicines, primarily for tropical diseases, not focused upon by the developed nations, it has a snowball effect on the Generic industries with only one saving clause.[iii]

Patented Drugs

Any medicinal preparation which is not disclosed in the market and is protected by the intellectual property rights under Patent Act as of in case of India, 1970 it’s a Patented Drug. Patenting of drugs is necessary because the drugs can be copied easily, and it can cause harm to the inventor research made. In developing and inventing a drug, there exists a tremendous amount of cost in Research and Development. Therefore the protection must be granted.

 Generally, the drugs are manufactured through compulsory licensing, undertake R&D for creating new drugs and work together with other companies to create new drugs. There was an assumption earlier, that the cost of drugs would rise, did not happen. Indian Pharmaceutical sector adapted the changes immediately, in the patent regime.

After the TRIPS Agreements were implemented, Indian Companies started ruling the market. Out of the twenty largest pharmaceutical companies in the medical sector, India controls sixteen and only four are Multi-National Companies.[iv]  After the product patent introduction in 2005, the market share of the MNCs reduced.[v] It was that the foreign companies started opening subsidiaries in India and sold their drugs through them. As compared to other countries the R&D cost in India is meagre, thus, India is favoured as compared to other countries.

Procedure for obtaining a drug patent

In India, an application for an ordinary patent for an invention can be filed by any person including citizen or non-citizen of India is:

  1. Claiming to be the first and true inventor of the invention or
  2. His assignee.
  3. The legal representative of a diseased person, who immediately before his death was entitled to fill the application form[vi]

Areas of Patent

According to Section 2 (1) (j) of the Patent Act, it states that “invention” means a new product or process involving an inventive step and capable of industrial application.[vii] According to this section if any inventor had the knowledge of the invention or is used or sold by any person, within or outside India, then the patent will not be granted for that particular invention. If the invention is in the knowledge of some other person, then the invention wouldn’t be considered as exclusive, and the validity of the application for seeking a patent will be void.[viii] To get a patent before the invention comes to public knowledge, the application for the patent has to be filed. The term “new” which is used in respect of a product has worldwide applicability. Therefore, if there exists that any evidence which shows that the invention already exists as been disclosed, used or patented by some other person, a patent for the product will not be admitted in India.

Ever-Greening Strategies

Ever-greening means to protect their financial interest. Many companies came up with a strategy. A study of drug patent ever-greening in India found that this is a strategy that has been used by manufacturers of a particular drug to restrict or prevent competition from manufacturers of generic equivalents. It is also a strategy still being used in India despite the efforts of Section 3(d) of the Indian Patent Act to curb such practices. Ever-greening extends the patent period of an originator drug, often by making small patentable changes to existing products with soon-to-expire patents. Companies can then switch patients to new products, grabbing market share from generics and increasing costs for both the healthcare system and patients.[ix]

The Supreme Court in India, in the case of Novartis AG v. UOI,[x] refused to permit a patent to Novartis, Novartis is a foreign company that applied for a patent their drugs. Indian Pharmaceuticals objected to such application made as they pleaded that a similar drug was already patented, and hence, the application of the said drug could not be patented. Novartis contended that it came up with modifications made to the drug and thus it was a new invention. The Court observed that the test laid down by Section 3 (d) of the Patents Act is not passed by the drug applied for the patent, and hence patent could not be granted. Further, it stated that the as per preceding section mere discovery of a new form by modifications made or any minor changes made to the discovered and known product, of which does not increase the efficiency of the product would not be covered within the ambit of an ‘invention’.

What is Compulsory Licensing?

Compulsory licensing is that effective concept wherein it permits a third party by Government sanction to manufacture and avail the distribution of patented product without the patent holder’s consent. This provision is there to give power to the government to use such invention for the public at significant usage and health emergency by cutting the cost of such generic products and using it for the public interest. Under this it allows the domestic manufacturers to use the Active Pharmaceutical Ingredients (API) and Formulas as used in the patented drug without approval from the patent holder to manufacture generic drugs. Also, the member states of the World Trade Organization (WTO) under the WTO TRIPS (Trade-Related Aspects of Intellectual Property Rights) can adopt a compulsory licensing regime.

Chapter XVI of the Indian Patent Act, 1970 subjects to Compulsory Licensing with the conditions thereon that are required to be fulfilled for the permit of a compulsory license being given under Sections 84 and 92 of the Act. Thus the Indian Government should under the powers granted under Section 92 of The Patent Act, 1970, can issue a Compulsory Licensing to a Generic Drug. The section states that:

Special provision for compulsory licenses on notifications by Central Government – (1) If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or situations of extreme urgency or case of public non-commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have an effect, that is to say—

  • the Controller shall on an application made at any time after the notification by any person interested, grant to the applicant a license under the patent on such terms and conditions as he thinks fit;
  • in settling the terms and conditions of a license granted under this section, the Controller shall endeavour to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.

(2) The provisions of sections 83, 87, 88, 89 and 90 shall apply about the grant of licenses under this section as they apply about the grant of licenses under section 84.

(3) Notwithstanding anything contained in sub-section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub-section (1) that it is necessary in—

(i) a circumstance of national emergency; or

(ii) a circumstance of extreme urgency; or

(iii) a case of public non-commercial use, which may arise or is required, as the case may be, including public health crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 about that application for grant of license under this section: Provided that the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of section 87.”[xi]

Under Section 84 of the Act any pharmaceutical company or person can request to seek a compulsory license even if he is not the holder of the patent on expiry of 3 years citing any one of the following three conditions:

 (1) The reasonable requirement of the unfulfilled public demand of the concern patent invention.

(2) The patented invention is not at an affordable price.

(3) The patented invention is not available at a local manufacturing unit.

The other sections, such as Section 100 and Section 102 of the said Act the government can use Compulsory licensing to acquire drug invention for the public interest. 

Compulsory Licensing and Cost of Cure to COVID-19

It can be observed that the whole world, including all the governments, has jumped on to win a race to come up with the treatments and a vaccine for the cure of global pandemic COVID-19. The whole world needs a potential Covid-19 vaccine to cope up with the life-threatening virus outbreak. Now here comes the question of:

How to get drug patent for the vaccine recovered and which ultimately urge the need for policies to guide the low cost-effective provision to make the drugs affordable and available for all?

Recent Developments demanding need for Compulsory Licensing

Since we all know that such outbreak has caused all the developing, as well as developed countries, suffer, therefore, we need a low-cost cure to treat everyone by waiving off the proprietary intellectual rights by the government. It cannot also be ignored that the cost of Research and Development in inventing a vaccine for such a disease is pretty high. Therefore, USA announced it as an Orphan Disease or Rare Disease under the Orphan Drug Act, 1983 so that it can give incentives as it is Drug Manufacturers and subsequently, the drug developed by them would be an Orphan Drug.

This will provide them Market exclusiveness for 7 years and financial incentives given by the government, which would ultimately accelerate the proprietary rights regime in the country. This patent system will provide the patent holder to control the pricing and availability of the drug. The essential vaccine like this would become expensive and inaccessible in developing counties and less developing countries. Recently, USFDA made Remdesiver, Gilead Sciences drug that claimed to treat Ebola, Marburg viruses and now the COVID-19. It is soon sent for solidarity Trial by WHO. From solidarity trial of Remdesivir drug to affordable and easily available drug Dexamethasone emerging as the first potential COVID-19 drug, the competition to get the potential vaccine gets intense.

The WHO announced a comprehensive multi-country human trial to test drugs for the potential treatment of Covid-19. “Treatment options under study:

Based on evidence from laboratory, animal and clinical studies, the following treatment options were selected: Remdesivir; Lopinavir/Ritonavir; Lopinavir/Ritonavir with Interferon beta-1a; and Hydroxychloroquine.

  1. Remdesivir was previously tested as an Ebola treatment. It has generated promising results in animal studies for Middle East Respiratory Syndrome (MERS-CoV) and severe acute respiratory syndrome (SARS), which are also caused by coronaviruses, suggesting it may have some effect in patients with COVID-19.
  2. Lopinavir/Ritonavir is a licensed treatment for HIV. Evidence for COVID-19, MERS and SARS is yet to show it can improve clinical outcomes or prevent infection. This trial aims to identify and confirm any benefit for COVID-19 patients. While there are indications from laboratory experiments that this combination may be effective against COVID-19, studies done so far in COVID-19 patients have been inconclusive.
  3. Interferon-beta-1a is used to treat multiple sclerosis.
  4. Hydroxychloroquine is used to treat rheumatology conditions.”[xii]
  5. Dexamethasone developed by U.K. in Oxford University, which is the first lifesaving drug is welcomed by WHO.[xiii]

In order to distribute the drugs to all and cope with the situation it is needed that the Compulsory Licensing should be recommended to Indian Pharmaceutical Companies by the Government of India keeping in mind the cost and availability required for the country.

Concluding Remarks

Summing up my views on drug patents and throwing some light on the current scenario wherein the race to develop a potential drug is escalating, it is becoming the need of the hour to strengthen our Proprietary regime. This step is necessary so that as the potential drug gets invented, it can become available and affordable to all. Also, the local Indian Pharmaceutical Companies are not affected by foreign Pharmaceutical Companies. It is of prime concern that the outbreak has to controlled keeping in view simultaneously the commercial interests and public interest.

It is also the matter of concern that the current status of India is in high demand for affordable and available to meet the demand of vaccine as the cases are rising at speed. However, it has to be focused upon that provisions are ensured such that there lie no unfair means of any pharmaceutical company using Intellectual Property Rights and the present demand. The protection is necessary, but meeting the needs of the country during such health emergency is of prime concern for the welfare as a whole.

Frequently Asked Questions

  1. What are Patented Products?
  2. How does the Indian Patent System work?
  3. What is the procedure for obtaining a Drug Patent?
  4. What is Compulsory Licensing?
  5. What are the provisions under which government can cut the cost of a patent drug?
  6. Whether compulsory licensing is a solution for the patented drugs for Covid19?

[i] VK Ahuja, LawRelating to Intellectual Property Rights 479 (3rd ed. LexisNexis 2019).

[ii]  Novartis AG v. Cipla Ltd.., 2015 (61) PTC 363(Del), p. 397.

[iii]  https://www.mondaq.com/india/patent/262416/the-trickle-down-effect-of-product-patent-in-india-and-on-the-developing-world.


[v]  Ibid.

[vi] Y. Chopra and S.P. Agrawal, how to obtain patents in Indian for pharmaceutical? 139-141 (vol. 32(3) Inventions Indian Journal of Pharmaceutical education the official journal of association of Pharmaceutical teachers of Indian 1998).

[vii]  The Patents Act, 1970

[viii]  https://blog.ipleaders.in/patent-law-india-pharmaceutical-industry/.

[ix]  GaBI Online – Generics and Biosimilars Initiative. The cost of evergreening strategies [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Jun 5]. Available from: www.gabionline.net/Generics/Research/The-cost-of-evergreening-strategies

[x] Novartis AG v. Union of India (2007) 4 MLJ 1153

[xi] https://www.wipo.int/edocs/lexdocs/laws/en/in/in065en.pdf

[xii] https://www.who.int/emergencies/diseases/novel-coronavirus-2019/global-research-on-novel-coronavirus-2019-ncov/solidarity-clinical-trial-for-covid-19-treatments

[xiii] https://www.who.int/news-room/detail/16-06-2020-who-welcomes-preliminary-results-about-dexamethasone-use-in-treating-critically-ill-covid-19-patients

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