Balancing Innovation and Access: The Role of Intellectual Property Rights in the Pharmaceutical Industry.

Oct. 06, 2024 • Aditi Shetty, 2nd year, National Law University, Nagpur.

Balancing Innovation and Access: The Role of Intellectual Property Rights in the Pharmaceutical Industry.

AUTHOR- Aditi Shetty

ABSTRACT: This article aims to uncover the ever existing struggle between IPR and need for access to healthcare. The heart of IPR and medicine is patents. They exist to serve as an incentive to companies to invest in R&D. Using various articles, cases and statistics we will look at various problems faced and how India has tried to work through them using various policies.

INTRODUCTION; In the pharmaceutical industry, innovation is crucial for developing new life-saving medicines. However, innovation often comes at a cost—one that is heavily influenced by intellectual property rights (IPR). Patents, data exclusivity, and other forms of IPR protect the financial interests of pharmaceutical companies, incentivizing them to invest in research and development (R&D). But this protection also leads to high drug prices, making essential medicines inaccessible to millions, particularly in low- and middle-income countries (LMICs). As such, the pharmaceutical industry faces an ongoing challenge: How do we balance the need for innovation with the necessity of ensuring equitable access to life-saving drugs?

At the end of the day innovation and access are two sides of the same coin, neither can exist without the other.

INNOVATION

At the heart of pharmaceutical innovation lies the patent system. Patents provide companies with exclusive rights to market new drugs for a period of 20 years, offering a crucial incentive for investment in research and development (R&D). This exclusivity is essential, as developing a new drug is a costly and time-consuming process, often taking over a decade and billions of dollars. Without the protection of patents, companies would be less inclined to invest in R&D, knowing that competitors could easily replicate and sell their innovations at lower prices.

ACCESS

While patents drive innovation, they also lead to high drug prices, particularly for new medications. This can make life-saving treatments unaffordable for many, especially in low- and middle-income countries. The high cost of patented drugs often limits access, creating a significant public health challenge. However, once patents expire, generic versions of these drugs can be produced, dramatically lowering costs and increasing accessibility

“Low- and middle-income countries, which account for more than 80% of the world’s population, are responsible for just 10% of global sales of many drugs due to the difficulty in affording or accessing necessary products. Poverty affects purchasing power, and the inability of poor people to pay reduces effective demand, which in turn affects the degree of interest of for-profit companies.”[1]

This shows the staggering effect that the price of innovation has had on access to healthcare.

PROBLEMS OF TODAY

HIGH COST OF R&D

Developing new drugs is a costly and time-consuming process, often taking over a decade and costing billions of dollars. This high cost necessitates strong intellectual property protections to ensure companies can recoup their investments.

2. REGULATORY AND POLICY CHALLENGES

Navigating the regulatory landscape for drug approval can be complex and varies significantly between countries, adding to the time and cost of bringing new drugs to market.

Differences in intellectual property laws and enforcement across countries can create challenges for pharmaceutical companies operating globally.

3. RESEARCH PRIORITIES

There is often less investment in research for diseases that primarily affect low-income populations, known as neglected diseases. This raises ethical questions about the allocation of resources and the responsibility of pharmaceutical companies to address global health needs.

While incentives exist for developing treatments for rare diseases (orphan drugs), the high prices of these drugs can limit access, raising ethical concerns about affordability and accessibility

4. HIGH DRUG PRICE

Innovative drugs often come with high price tags, making them unaffordable for many patients, especially in low- and middle-income countries. This limits access to life-saving treatments. Even in high-income countries, insurance coverage may not always extend to the latest treatments, leaving patients to bear high out-of-pocket costs

5. GLOBAL DISPARITY

There is a stark contrast in the availability of new medicines between high-income and low-income countries. This exacerbates global health inequities, as those in poorer regions may not have access to the latest treatments. This difference doesn’t limit itself to international borders but also within countries. A city like Mumbai or Delhi may give you direct access to various medicines but at the same point rural areas have trouble accessing the most basic of medicines

6. DELAYED GENERICS

Patents grant pharmaceutical companies exclusive rights to produce and sell new drugs, which can lead to monopolistic practices and high prices. Patents delay the entry of generic drugs into the market, which are typically more affordable and increase access for patients.

INDIAN CONTEXT

India’s approach to pharmaceutical patents has evolved significantly over the years, particularly after becoming a signatory to the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) in 1995[2]. Historically, the Patents Act of 1970 excluded pharmaceutical products from patent eligibility, focusing instead on process patents to promote the production of generic drugs and ensure affordable access to medicines. However, amendments in 1999, 2002, and 2005 aligned India’s patent laws with international standards,[3] allowing product patents for pharmaceuticals but with strict criteria.

- Section 3(d) to prevent “evergreening” or minor modifications that extend patent life without significant therapeutic benefits. This provision ensures that only genuine innovations receive patent protection

- India’s patent law includes provisions for compulsory licensing, enabling the production of generic versions of patented drugs in public health emergencies.

These measures have not only been the step in the right direction but also has been a major move in making India a global supplier of generic medicines.

THE NOVARTIS V. UNION OF INDIA

Background

The case of Novartis A.G. v. Union of India[4] is a landmark decision by the Supreme Court of India, decided on April 1, 2013. The case revolved around the patent application filed by Novartis for the drug Glivec (imatinib mesylate), used in the treatment of chronic myeloid leukaemia and gastrointestinal stromal tumours.

Key Issues

The primary issue was whether the beta-crystalline form of imatinib mesylate, marketed as Glivec, qualified for a patent under Indian law. Novartis argued that this form of the drug was a new invention and thus patentable. However, the Indian Patent Office rejected the application, citing Section 3(d) of the Indian Patents Act[5], which aims to prevent “evergreening” of patents1.

Section 3(d) of the Indian Patents Act

Section 3(d) is a unique provision in Indian patent law that restricts the patenting of new forms of known substances unless they result in significantly enhanced efficacy. This provision was designed to prevent pharmaceutical companies from obtaining patents on minor modifications of existing drugs to extend their patent life

Court’s Decision

The Supreme Court upheld the rejection of Novartis’ patent application. The court ruled that the beta-crystalline form of imatinib mesylate did not demonstrate enhanced therapeutic efficacy over the known substance, imatinib, as required by Section 3(d)1 3. The court emphasised that the purpose of Section 3(d) was to prevent evergreening and ensure that only genuine innovations receive patent protection

IMPACT

India’s stringent patent laws, especially the provisions under Section 3(d) of the Patents Act, have been instrumental in preventing the “evergreening” of patents. This has allowed Indian pharmaceutical companies to produce generic versions of essential drugs, significantly lowering the cost of medications not only in India but also in many low- and middle-income countries

India’s generic drug industry supplies a substantial portion of the world’s affordable medicines, particularly for diseases like HIV/AIDS, tuberculosis, and malaria.

The availability of affordable generic drugs from India has been crucial in global health initiatives. Organisations such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, and Médecins Sans Frontières (Doctors Without Borders) rely heavily on Indian generics to provide treatment in resource-limited settings.

India’s robust generic pharmaceutical industry has also had significant economic implications. It has positioned India as a major player in the global pharmaceutical market, contributing to economic growth and creating numerous jobs. The industry’s success has demonstrated the viability of a model that prioritises both innovation and access.

CONCLUSION

Balancing innovation and access in the pharmaceutical industry is a complex yet essential endeavour. Intellectual Property Rights (IPR) play a pivotal role in this balance by incentivizing pharmaceutical companies to invest in research and development through patent protection. However, this protection often results in high drug prices, limiting access to essential medicines, especially in low- and middle-income countries.

The constant push and pull that has been faced, the problems that still stand in our way from reaching equitable access to healthcare. Till policy makers don't strike the correct balance between profit and people this problem will not be solved.

The success of India’s generic drug industry underscores the viability of a system that supports both the development of new drugs and the health needs of populations worldwide. This balanced approach is crucial for ensuring that life-saving treatments are both developed and accessible to those in need.

REFERENCES

https://journalofethics.ama-assn.org/article/intellectual-property-and-access-medicine-poor/2006-12

https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-021-10374-y

https://unctad.org/ippcaselaw/novartis-ag-v-union-india-others-supreme-court-india-1-april-2013

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3217699/

https://www.who.int/health-topics/intellectual-property

https://venusremedies.com/blog/ipr-pharmaceuticals

https://www.wipo.int/edocs/pubdocs/en/wipo_pub_1012-chapter5.pdf

[1] Intellectual property and trade, World Health Organization, www.who.int, 2nd October, 2024.

[2] Patents And The Indian Pharmaceutical Industry, Nitish Desai Associates, https://www.mondaq.com/india/patent/865888/patents-and-the-indian-pharmaceutical-industry.

[3] The Global Significance of India’s Pharmaceutical Patent Laws, Dr. Rajeshkumar Acharya, https://www.aipla.org/list/innovate-articles/the-global-significance-of-india-s-pharmaceutical-patent-laws.

[4] Novartis A.G. V. Union of India,AIR 2013 SUPREME COURT 1311.