Leena Menghaney, Regional Head, MSF Access Campaign, South Asia, in this article, explores milestones in policies that have had an impact on the production, supply and availability of affordable medicines from 1947 to the present day
Following independence, the drug supply situation in India was primarily dominated by what were then known as transnational corporations (TNCs) which imported a limited range of medicines. Drug prices were high and ungoverned, and profiteering was rampant. Local production by domestic companies like Chemical, Industrial and Pharmaceutical Laboratories (known as Cipla today) were blocked by the patent law which India had inherited as part of its colonial legacy.
However, innovative policy and legal reforms over two decades (1955 – 1975) resulted in India becoming a pioneer among developing countries in promoting indigenous manufacturing and technological capability in pharma products. This benefited millions of patients in developing countries by providing a source of affordable generic medicines.
As a first crucial step, the Indian government in 1957 appointed a parliamentary committee under the chairmanship of Justice Raja Gopal Ayyangar, which led to path breaking amendments to the Intellectual Property (IP) system, disallowing product patents (monopolies) on food and pharma products as well as limiting process patents to seven years. The amended Patent Act 1970, based on the recommendation of the Ayyangar Committee, stated that its objective was to foster the development of an indigenous Indian pharma industry and to guarantee that the Indian public had access to low-cost drugs.
To accelerate the production of medicines domestically, the government set up the public sector units to manufacture new drugs with the aim to build and strengthen domestic capacity in pharma products. The production units were much needed for the production of drugs like penicillin.
Indian manufacturers were still struggling to develop and manufacture active pharmaceutical ingredients (APIs) – the raw material – that determines the cost and efficiency of production. The 1974 Hathi Committee Report on Drugs and Pharmaceuticals gave a fillip to API production in the country by recommending that the import of bulk drugs by domestic manufacturers be discouraged; and mandating TNCs selling formulations in India to start manufacturing the API in India within three years.
Emergence of public R&D labs
Simultaneously, public research and development (R&D) laboratories were also set up in India. Of particular importance are the National Chemical Laboratory, Pune; the Central Drug Research Institute, Lucknow; and Regional Research Laboratory (later renamed as Indian Institute of Chemical Technology), Hyderabad. Between mid-1970s and late 1980s, the scientists and organic chemists from these institutes developed efficient, cost-effective processes to boost API manufacturing. This enabled generic manufacturers to develop low-cost generic formulations of new medicines. By early 1990s the impact of technology transfer was evident- not only generic drugs were being produced from scratch but were far more affordable. In 1993, the price of an anti-ulcer drug – ranitidine – in India was 16.58 times lower than the price at which Glaxo sold it in the UK.
Signing TRIPS agreement
Early 1990s also witnessed India’s initial but strong opposition to the inclusion of IP within the ambit of trade negotiations in the World Trade Organisation (WTO). The weakening of India’s negotiations was one major contributing factor that led to the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement. Finally as a member of WTO and having signed the TRIPS agreement in 1994, India was mandated to change its pharma patent system by 2005.
Ironically, in the decade between signing the TRIPS agreement and the deadline to implement it, generic production from India was recognised for its critical role in the supply of affordable medicines in the developing world, especially for newer drugs such as antiretrovirals (ARVs) needed in the treatment of HIV. For example, the cost of first generation HIV treatment dropped from over $10,000 per patient per year in 2000 to $350 by 2001- thanks to generic competition from companies like Cipla. In addition, Indian manufacturers developed generic fixed-dose combinations that dramatically simplified AIDS treatment in resource-limited settings, including India. By 2005, India established itself as the global power house of generic drug production and supply.
Amending the patent law
Unfortunately, in 2005, India had to amend its patent law to become compliant with its obligations under WTO. In the midst of civil society protests and international media attention, the Indian Parliament approved and passed amendments to Patents Act on March 23, 2005. The Indian Patents Act of 1970 was thus amended to grant pharma product patents – something the country had not done since 1970.
The 2005 patent law not only put some serious constraints on generic competition but also had some potentially important features such as strict patentability criteria to prevent ever-greening; the right for anyone to object to a patent before it is granted; and compulsory licensing. The following decade is interspersed with several examples which affected access to affordable medicines, both negatively as well as positively. For instance in 2006, Roche proudly announced it was “becoming the first pharma company in India to receive a product patent under the new patent regime.” The patent granted was on peginterferon alfa-2a (Pegasys), a hepatitis C drug, priced at the time at over Rs 18,000 per injection.
At the same time, in the decade since product patenting system was introduced in the country, India’s patent offices and Intellectual Property Appellate Board have strictly examined and rejected several secondary (ever-greening) patent claims over salts, polymorphs, dosages, fixed dose combinations and child formulations of known HIV, Hepatitis, TB and cancer medicines.
Among them was the Swiss pharma company Novartis, which lost a seven-year battle to claim a patent on a new form of an existing cancer medicine. The Supreme Court ruled that claims on a new form of a known substance did not meet the patentability requirement under the Indian patent law. The impact: price busting generic competition. The cost of the generic version of imatinib in India is $790 per patient per year compared to the patented version which is marketed by Novartis at $106,322 per patient per year in the US.
Unfortunately, almost a decade after the first product patent was granted, India is drying up as a source of affordable versions of newer and future medicines. Patenting new medicines in India could mean that Indian manufacturers will no longer be able to automatically produce cheaper versions of newer medicines. Such newer drugs are crucial, for example, to treat TB, cancer and other critical diseases. But, only one compulsory license by the Patent Controller has been granted to increase competition. The move brought the price of the patented liver and kidney cancer drug down from over Rs 280,000 per month to Rs 8,800 per month; a price reduction of 97 per cent.
Granting a patent in India will have a chilling effect for a number of years on generic manufacturing and supply. A patented cancer drug lapatinib costs Rs 445 a tablet. Newly developed drugs against DR-TB, Bedaquiline and Delamanid are under patent and thus highly priced or unavailable.
Need for a new IP policy
Amidst rising drug prices and increasing US pressure to enforce the intellectual property of its pharma companies, India is now reviewing and drafting a new national IP policy, which will determine the future of generic competition and supply of medicines from India.
Prime Minister Modi now faces a challenge: future access to essential medicines for millions of people will depend on the new Indian government’s policies and the kind of patent system it endorses.