Until 1970 strict Indian patenting laws, covering pharmaceuticals, food and agricultural products, meant that most medicines had to be imported at some of the highest prices in the world. India had almost no domestic drug manufacturing capability.
Then the “product patenting” regime was scrapped and replaced with “process patenting”. In the pharmaceutical industry this meant that Indian companies could make cheaper versions of drugs, as long as they used a different, unpatented manufacturing process. India emerged as one of the world’s biggest medicine producers and today supplies drugs at between a tenth and a hundredth of the prices found in patent-protected markets.
But the Patents Amendment Act, recently passed by the Indian parliament, will end this 35 year old patent regime and mark the return to product patenting.
The move came as a result of the Uruguay Round of discussions (1986-94), which gave birth to the World Trade Organisation (WTO) with its unequal trade and intellectual property rights regime. As a developing country India had a ten year grace period, which ended at the beginning of 2005. After this it had to align its patents act with the Trade Related Intellectual Property Rights (TRIPS) part of the WTO agreement.
The first set of changes came in 1999, the second round took place in 2002, when the then ruling right wing BJP-led government joined with the opposition Congress Party to produce a set of amendments to patent law which went considerably beyond TRIPS. After winning power in 2004, the new Congress-led government placed amendments before parliament that continued along the same trajectory. Worse, it added a software patents clause, which TRIPS does not even require.
The impact of TRIPS is now becoming visible worldwide. The AIDS epidemic has belatedly brought home the cost of putting the drug multinationals’ profits before human lives. The importance of the earlier patent regime has also become clear with an estimated 60 percent of AIDS drugs, particularly those used in Africa, coming from Indian sources.
A year’s supply of the anti-retrovirals required by AIDS patients costs $10,000-$15,000 from the pharmaceutical giants. Indian companies supply the same drugs for only $130-$250 dollars. They also supply easy to use three-in-one drug combinations not available elsewhere.
For India to continue with its process patent regime it would have had to walk out of the WTO or face trade sanctions, which was never a realistic option.
The only alternative was, while making use of whatever flexibilities exist within TRIPS, to continue the fight that started at the 2001 WTO talks in Doha, Qatar. There an argument was put that TRIPS was destroying the economies of developing countries and should be taken out of the WTO.
This was the argument that India, Brazil and others had advanced from 1986-9 before the then Congress government succumbed to US pressure and broke ranks.
Currently the left parties in India, with 62 members in the 542-member parliament, hold the balance. The right wing BJP-led opposition was out to embarrass the Congress-led government and so opposed the patents bill—even though it was virtually their draft that Congress adopted.
Accepting that TRIPS cannot be fought only domestically, left parties and other groups had proposed amendments to expand on flexibilities that exist in TRIPS. The balance of power in the parliament provided the left with an opportunity to make a real intervention and some important changes in the final act.
These include limiting what can be patented, protecting the export of drugs such as anti-retrovirals, some strengthening of the compulsory licensing provisions and removal of software patents. There are still major gaps that need to be plugged — the compulsory licensing procedures need to be strengthened further, reasonable royalty caps need to be put in place and implications for agriculture need to be examined. But the gains made by the left are by no means insignificant.
With the new TRIPS-compliant patents act in India, what happens to the export and the price of anti-retrovirals? Originally it looked like the export of anti-AIDS drugs to other countries was set to become far more difficult. This has been addressed now in the final act.
However, while the prices of existing drugs are unlikely to be affected, there is no question that with the process patents window now closing in India, future patented drugs could and would become well beyond the reach of consumers in developing countries.
That is why we need a worldwide campaign on TRIPS and the WTO. The most we could expect out of an Indian patents act is the best of a bad TRIPS bargain. It is the bargain itself that needs to be challenged.
Prabir Purkayastha is an activist from the Delhi Science Forum. For more go to www.delhiscienceforum.org