The testimony of Michael Froman, US Trade Representative (USTR) before Senate Finance Committee mentioning commitments given by prime minister Modi on intellectual property rights (IPR) issues during former’s recent visit to India has evoked strong reaction from domestic pharmaceutical industry and pro-health groups.
The industry alleges that the government has given commitments that go much beyond India’s obligations under TRIPS (trade related intellectual property rights) agreement of WTO. The two areas of specific concern raised by it are (i) data exclusivity (ii) patent linkage; better known as TRIPs plus. The allegations are without basis.
All that government promised was that concerns expressed by US industry over alleged poor enforcement of IPR laws will be brainstormed in the Working Group set up under aegis of Trade Policy Forum (TPF) in the follow up to Modi’s summit meeting with Obama in September, 2014.
Meanwhile, department of industrial policy and promotion (DIPP) in commerce ministry – nodal authority for all IPR related issues – has floated a position paper inviting comments from public with a view to formulate an IPR policy. It would be naive to construe this as tantamount to giving any commitment.
Nonetheless, lack of clarity on these issues has vitiated the atmosphere. It even led to adverse comments in the USTR’s Special 301 report on trade and industry practices released in early 2014, wherein it stopped short of putting India on its Priority Foreign Country (PFC) a tag that invites trade and economic sanction. Therefore, these need to be carefully examined with an objective mindset shorn of rhetoric.
Discovery and development of new medicines and crop protection (CP) products involve huge effort in conducting research and clinical trials (as per stringent registration guidelines) to demonstrate their safety and efficacy to national regulator before these are granted market access. For a new drug molecule, associated costs may be well over US$ 1 billion.
Logically therefore, an innovator has a fundamental interest in launching products of innovation in a jurisdiction where he gets a reasonable opportunity to recuperate such high cost. The company seeks a legal and regulatory framework which rewards it commensurately and also protects test data submitted to get market approval.
The reward for innovation is given vide patent grant which India had provided for under Patent (Amendment) Act, 2005. This confers on innovator a period of ‘exclusivity’ during which any person wanting to produce/import, distribute and use the patent protected product can do so only with his prior consent.
The issue of data protection was examined by an inter-ministerial Committee (IMC) under Secretary, chemicals ministry. In its report (2007), committee recommended protection of registration data or data exclusivity (DE) for CP products for a period 3 years from date of market approval by innovator. Meanwhile, the Pesticides Management Bill (PMB) introduced in Rajya Sabha in 2008 and still pending has DE provision for 3 years.
In case of medicine however, while recommending protection against disclosure (regulator cannot disclose data to a third party), IMC refrained from proposing DE. In other words, the regulator can rely on data submitted by innovator to grant of market access to ‘me too’/subsequent applicants.
Clearly, the extant laws on drugs and CP products do not provide for data exclusivity (DE). In regard to patent, ironically even though the law provides for it, de facto this protection too is not available due to absence of patent linkage.
For drugs and CP products, any person/entity wishing to import/make and sell a product has to take approval of Drug Controller General of India (DCGI) and Central Insecticides Board & Registration Committee (CIB&RC) respectively. DCGI grants registration for drugs under the Drugs & Cosmetics Act (1944) whereas CIB&RC does so for CP products under the Insecticides Act (1968).
These regulators grant market approvals based solely on compliance with relevant sections of DCA (1944) and IA (1968) and on being satisfied about claims in regard to ‘efficacy’ and ‘safety’ of the product. They do not take cognizance of the existence of patent— suo motu or even when patent holder brings it to their attention. They do not even look at Patent (Amendment) Act!
How can the government be oblivious of inherent link between patent and market access especially when it is also the ‘gate keeper’ and no new product of innovation can enter Indian market without its permission? This is illogical and un-tenable. If, despite existence of patent, it goes ahead with grant of ‘me too’ registration, it inevitably becomes a party to patent infringement.
In any other area, where government is not in the picture, a copy cat will not dare make or sell a patent protected product (albeit without innovator’s prior consent) as he runs the risk of having to pay heavy compensation and damages for infringement. In case of drugs and CP products, armed with government’s approval, he can.
Not recognizing patent linkage while granting market access tantamount to negating the very act of patent grant. Having amended our laws to provide for product patent, government cannot turn the tables and say it won’t honour patent. Patent linkage is not TRIPs plus; it is only a logical step to honour patent.
However, the suggested linkage should apply only to cases where patent exists and is duly notified. It must not cover instances of mere filing of patents or patent application published, etc, as these may or may not result in patent grant.
The only flip-side could be a scenario where a patent gets revoked at some point of time. But, such instances are rare and that should not deter the lawmakers from taking a decision that provides a well-deserved comfort to innovators.
The government must not allow its actions to be clogged by pre-patent (amendment) mindset. Once wedded to patent, it should take all steps to ensure that holder’s rights are fully protected. The concept of ‘patent linkage’ needs to be viewed in this spirit.
Likewise, it should amend laws viz., DCA (1944) and IA (1968) to provide for protection of registration data to give incentive to innovators to bring new products for benefit of farmers/patients. This will be in compliance with Article 39.3 of TRIPs agreement is certainly not a TRIPs plus as alleged.