High Cost of Patented Medicines, Evergreening And Section 3(d) Patents Act 1970 - A Perspective

Being world's second largest population, having supposedly third of worlds poor, India has always struggled to strike a balance between demand of affordable medicine and obligations under changing international patent regime.There is no denying that one of the side effects of Patent System is the high cost of patented drugs, often rendering medical care inaccessible to the poor. Patents are vital, as we understand, but to what extent patent helps in promoting innovation and research is debatable. In our country where basic necessities like food , clothing and housing becomes unaffordable to many, the concern for health seems to take a back seat and masses often seek medical help only when ailment becomes work disabling.

Escalating medicine price made the Indian Government introduce "Drug Price Control Order" (DPCO) back in 1970s, aiming to gain control over price. Also, by Patent Act 1970 India banned patent for 'product' but recognized novel 'process' for manufacturing drug. The impact was seen , these reforms facilitated growth of Indian Generic Pharmaceutical Industry. Generic drug makers manufactured copies of the drugs by developing their own processes for the end product and providing medicines at a drastically reduced price.

But with mounting international pressure to make Indian Patent Law TRIPS compliant, India had to introduce "product patent" by 2005, thereby providing Patents both on pharmaceutical products as well the processes involved in manufacturing. Hence, pharmaceuticals now thrive in an optimum environment of monopoly over the production and marketing of medicines, allowing them to fix prices at high rates to gain maximum profit.With the introduction of product patent there also arose the possibility of patenting minor and insignificant improvements specially in pharmaceutical industry. A strategy known as 'evergreening' often practiced by pharmaceuticals , whereby patent protection of an original product is sought to be extended further by obtaining patent for minor improvements. thereby keeping competition at bay for longer period. Resulting in longer periods of monopoly and incidental higher cost of medicines.

By amended section 3 (d) of Patents Act 1970, which reads as under:

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"Section 3.-- What are not inventions.—

The following are not inventions within the meaning of this Act,--

(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation.--

For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they duffer significantly in properties with regard to efficacy."

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the law prohibits patenting minor incremental innovations, unless it results into enhanced efficacy.

Implementation of section 3(d) became more clear post Apex Court's decision in 2013 against further grant of patent in the case of advancement cited in cancer drug Glivec .It was observed that no 'enhanced efficacy' was shown by the drug component in treating the ailment. Hon'ble Court noted that Section 3(d) of the Indian Patents Act, does not allow patents of new versions of known drug molecules, unless they make the medicine significantly more effective than before, Thus, better functionality of substance if not resulting in better therapeutic effect , cannot pass the test of patentability. Detailed report on judgement can be found in my earlier post  here.

Also, in 2013 section 3(d) was relied upon for the first time in not granting plant patent to Monsanto. Monsanto was denied patent for “a method producing a transgenic plant, with increasing heat tolerance or drought tolerance”, since the claims of patent application fell under section 3 (d) of Patent Act, the structure and function of cold shock protein was already known in cited prior art and was obvious to person skilled in art, whereby mere application of already known cold shock protein one can produce cold stress tolerant plant.

Section 3(d) has been the center of strong reactions. International pharma community argues, it stunts research and developments in pharmaceutical sector, as most of the inventions are incremental in nature, but if we look at the ever increasing pharma output in India, it confirms the fact that amended section 3(d) is in no way deterrent to growth of pharma industry. So it seems where the intent should be providing accessible healthcare to the masses, the real agenda is maximizing profit and keeping competition at bay. Hence, in view of 20 years long patent protection , India's stricter control over patent law specially where public health is concerned stands completely justified. 

For any suggestions/query I can be reached at securingip@gmail.com or please drop in your comments