The Patent System & Public Health Emergency

The patent system (payment of royalty to patent owner) is supposedly designed to promote innovation and, at the same time, offer a mechanism ensuring that the fruits of that innovation are accessible to society. In the contexts of public health, the challenge for policy makers is to find an optimal balance between the rights of patent owners, who provide technological innovations to improve health conditions, and the needs of the general public.

In general, the development of new drugs requires heavy investment and long-term research, coupled with expensive clinical trials and regulatory approval procedures. The exclusive right conferred by a patent is one of the incentives for developers of new drugs to make the necessary investments into that research. Clearing issues, such as ownership and licensing policies for innovation derived from public research, would contribute to the promotion of a more effective deployment of public funds and public R&D programs. At the same time, the patent system also contributes to society by making available patent information, which is freely available to other researchers to further improve existing technologies. With a view to facilitating commercialization and ensuring access to patented technologies, the patent system is primarily based on conferring an exclusive right, in conjunction with a voluntary licensing mechanism. However, taking into account the public interest and policy objectives beyond the patent system, there are a number of flexible mechanisms built in the patent system, such as the possibility of issuing compulsory licenses, research exceptions and parallel imports.

On the other hand, some consider that the current patent system does not adequately address public health crises. It is argued that the commercial incentives provided by the patent system are not sufficient to ensure the development of new products in certain areas, for example, in respect of neglected diseases, and that patent rights, which are enforced on the basis of commercial and market-based considerations, prevent access to, or increase prices of, essential medicines. Some criticize that the safeguard mechanisms built in the patent system, such as compulsory licenses or research exceptions, are not sufficiently broad to cover existing needs. Further, the number and, at times, the broad scope of patents granted in the field of early fundamental research have raised concerns about patent thickets and royalty stacking. In particular, reach-through claims in respect of research tools are considered a potential obstacle to further research and development.

In this context, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which regulates global trade in IPRs engages two core legal instruments in its functional relevance to public health and facilitates access to essential and affordable medicines, namely compulsory license (CL) and government use. Between the Article 27.1 standard guiding patents including pharmaceuticals and the substantive exception and limitation clauses across the agreement, TRIPs arguably maintains a global patent regime or imbalances, as it were, which has always courted controversy in the different sets of circumstances or applications across both the developed and developing countries. TRIPs flexibilities construct and as patent law’s exceptions and limitations provide the organic framework to bypass patent exclusive rights in making patented products and processes available without the risk of infringement. Although, TRIPs as ‘a minimum standard’ agreement has witnessed considerable ambivalence both in its rigidities and flexibilities generally and with respect to its relationship with public health, for example, with the 80s and 90s global outcry over the HIV/AIDS pandemic that necessitated the clarification of the ‘Doha Declaration on TRIPs and Public Health’ in 2001, the aforementioned instruments have remained the standard legal and policy measures adopted by most patent systems for accessing pharmaceutical patents without the voluntary permission of patentees.

This helps to meet diverse public interests, particularly public health emergencies, among others, which is particularly useful for many developing countries like India. The range of grounds includes emergency or extreme urgency, anti-competitive practices, public non-commercial use and dependent patents to be determined by national laws. With the ‘countries’ right to determine what constitutes national emergency or circumstance of extreme emergency’, application of compulsory licences and government scheme is consistent with TRIPs, taking into account necessary competition and trade considerations such as parallel import. COVID 19 pandemic definitely meets all criteria of a public health emergency and it would be important for the Indian civil society and opposition to hold the government to account for applying the public health emergency criteria for relevant vaccines and medicines by not paying for the royalty for patent (Intellectual Property Rights-IPR) on these COVID related items. This will directly help to reduce the price of vaccines and medicines for the people.