PATENT WARS IN THE PHARMACEUTICAL INDUSTRY: A LEGAL PERSPECTIVE

Sharika Praveenkumar, Student, Kristu Jayanti College of Law

INTRODUCTION

The pharmaceutical industry is the most vital component of global health. They face intense legal battles over drug patents, known as “patent wars.” India, who is a  major player in the generic drug market, experiences complicated and challenging complexities within its patent law framework. India’s booming pharmaceutical industry has become a global leader because of  its novel R&D initiatives and affordable production capabilities. However, as both domestic and international pharmaceutical corporations negotiate the intricate legal system around pharmaceutical patents, the nation has also been at the epicenter of patent conflict. This article aims to provide a comprehensive understanding of how patent laws impact the pharmaceutical industry and global healthcare by examining the legal complexities and broader consequences of patent disputes.

PATENT AND PHARMACEUTICAL PATENT

A patent gives the holder the full rights to make, use, sell, or distribute an invention for a set time, usually 20 years from the day it is filed. It is a legal right granted to the inventor. Patents for pharmaceuticals have become particularly significant since they protect the discoveries that result in the creation of novel medications and treatments. WIPO mentions, “A Patent as an exclusive right that is  granted by a government for invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution or offers a new solution to a problem”. 

“Pharmaceutical Patents are the Patents associated with medicines, medicinal processes molecules and vaccines.” “The pharmaceutical patent is issued for product patent, product by process, process patent and formulation patent.” Pharmaceutical product means a patented product of the pharmaceutical sector needed to remedy public health problems, or a product manufactured through a patented process.” Patent protection encourages pharmaceutical research and development (R&D) by allowing companies to recoup their substantial investments. But the monopolistic nature of patents often results in exorbitant drug costs, rendering many people unable to afford necessary medications. The core of pharmaceutical patent warfare is this conflict between invention and availability.

LEGAL CONCERNS IN PHARMACEUTICAL PATENTS

The inherent conflict between safeguarding public health and preserving innovation can result to patent conflicts in the pharmaceutical sector. Legal disagreements over the granting, extending, and enforcing of patents are at the core of these arguments. The extensive legal framework governing pharmaceutical patents and its wider ramifications for availability and invention are highlighted by the following major issues:

• Evergreening 

The pharmaceutical industry uses a method known as “evergreening” to prolong the life of their patents past the initial period, which is usually 20 years. This is carried out by making minor changes to already-approved medications, which are subsequently patented as novel ideas. These adjustments could involve adjustments to the composition, dose, or delivery system. Section3(d) of the Indian Patent Act 1970 prevents the practice of Evergreening. This Section  seeks to enhance access to cheap medications, especially in India where healthcare facilities are constrained. Pharmaceutical companies typically employ the following evergreening strategies: 1. Repetitive expansions and the development of “next generation drugs,” which lead to unnecessary modifications to a product and subsequently patenting it as a new application.

2. Over-the-counter (OTC) switch prescription.

3. Exclusive alliances with leading generic medication companies before their patents expire, which greatly raises the brand’s value and allows them to receive royalties on the product in the meantime.

4. In order to maintain healthy competition, innovative companies use defensive pricing strategies, which lower product prices to match those of generic competitors. 

The case Novartis AG v. Union of India is a landmark decision by the Supreme Court of India which set a precedent by denying a patent extension for a modified version of the cancer drug “Glivec”, which emphasized the need for substantial innovation. This ruling also upheld Section3(d) of the Indian Patent Act 1970. 

• Compulsory Licensing

Some nations have enacted mandatory licensing requirements to reduce the effects of high medicine costs. A legal procedure known as compulsory licensing enables a government to authorize a third party to manufacture a patented product without the patent holder’s approval. Compulsory licensing has been used in nations like India to maintain the affordability of vital medications. Sections 82–94 of the Indian Patent Act of 1970, in particular, contain provisions for compulsory licensing and permit the government to award licenses to third parties in certain situations. These clauses are consistent with international treaties like the TRIPS Agreement. 

One important legal turning point in the Indian approach for compulsory licensing in the pharmaceutical industry is the case of Natco Pharma Ltd. vs. Bayer Corporation In this instance, Natco was given  compulsory license to produce and market a less expensive form of sorafenib tosylate, an anti-cancer medication made by Bayer. Since this medication was first not made in India, its cost was extremely unreasonable and out of reach for the public at large. The general public could now afford the generic form of the medication after the license was obtained.

THE ECONOMICS OF PATENT WARS

The pharmaceutical industry’s patent conflicts’ economic aspects show how innovation, affordability, and public health are intricately intertwined. Even Though patents are necessary for safeguarding intellectual property and encouraging research, they can have serious negative impacts on society and the economy. The price of medications, the introduction and effects of generics, and the overall burden on healthcare systems are where these effects are most noticeable. We can gain a better understanding of the significant impact that patents have on industry practices and the global healthcare landscapes by looking at these factors.

• Impact on drug pricing and medical facilities

Pharmaceutical companies are granted exclusive rights via patents, which enable them to establish exorbitant prices for their goods without facing competition. Exorbitant markups from this monopoly could hinder many patients from affording life-saving drugs.

Particularly impacted are illnesses like cancer, HIV, and rare genetic abnormalities, for which people in low- and middle-income nations sometimes cannot afford medication. The prioritizing of business over public health raises ethical considerations and results in a notable gap in healthcare access.

•  Impact of Generic Competition

Generic producers get ready to launch less expensive substitutes into the market when patents expire. However, in order to decrease competition and keep prices high, large companies frequently use strategies like “pay-for-delay” settlements. The accessibility and expenditures for public health can be greatly impacted by these tactics. When generics are introduced, prices usually drop significantly. For example, the emergence of generic versions of medications such as Nexavar has significantly reduced expenditures.

• Financial Burden on Government

Governments and healthcare systems are financially burdened by extended patent disputes because they have to spend a lot of money to acquire highly patented medications. Public health programs in low- and middle-income nations frequently find it difficult to pay for necessary prescription drugs, which exacerbates healthcare disparities. Prolonged litigation raises healthcare expenses even in high-income countries, putting pressure on insurance companies to raise prices or limit coverage. The significance of striking a balance between patent rights and policies that support medicine affordability and fair access is highlighted by these financial hardships.

LEGAL AND POLICY CONSIDERATIONS

The continuous patent disputes in the pharmaceutical sector underscore the necessity of pragmatic legal and policy measures to resolve the conflict between safeguarding public health and preserving innovation. A complex strategy is needed to strike a balance between the rights of patent holders and the urgent need for inexpensive access to necessary medications. Governments and international organizations can strive toward a system that fosters accessibility and creativity by advocating for equitable solutions.

• Stricter Patentability Standards:

Lawmakers should make sure that only true advances are eligible for patents. One possible model would be to follow India’s Section 3(d) policy, which prohibits patents for minor modifications unless they substantially improve efficacy. Pharmaceutical firms’ practice of “evergreening,” which involves making modest changes to already-approved medications primarily to prolong their patent life, was addressed by Section 3(d). Section 3(d) aids in striking a balance between the necessity of providing incentives for research and the necessity of ensuring that necessary medications are accessible and reasonably priced.

• Strengthening Compulsory Licensing

The grounds for granting compulsory license should be clarified and broadened by governments, especially in times of medical emergency. The mandatory licensing procedure should be streamlined by the government to increase its effectiveness and accessibility.In order to solve important public health issues, a government may use compulsory licensing to authorize the production of a patented medication without the patent holder’s consent. In situations when patented medications are unaffordable or unavailable, this technique is especially helpful since it makes it possible to produce reasonably priced generic copies of medications to satisfy public health demands. 

• Harmonize Global Standards:

While maintaining the required flexibility for public health considerations, nations should endeavor to bring their patent laws into compliance with international norms. This collaboration can lessen regional differences in access to medications.

• Promoting Open Innovation Models: 

Reliance on monopolistic  patents may be lessened via publicly sponsored R&D projects and open-source drug development platforms. Open innovation approaches could lower the cost of creating life-saving medications and encourage cooperative research. Stakeholders can promote growth without exclusively depending on exclusive patent rights by combining resources, exchanging data, and embracing transparency. These methods have previously shown promise in the development of therapies for diseases like malaria and tuberculosis, where non-profit groups and public-private collaborations have been crucial.

CONCLUSION

The complex relationship between innovation, legal frameworks, and public health imperatives is highlighted by the pharmaceutical industry’s patent conflicts. Although patents are crucial for promoting innovation, people’s lives shouldn’t be sacrificed in order to enforce them. To guarantee that the advantages of pharmaceutical innovations reach those who need them the most, a fair legal strategy based on ethical concerns is essential. Governments, international organizations, and industry players must work together so that they can  address these problems and build a more just and efficient system.