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New Patent Regime:
Implications for Domestic Industry,
Research & Development and Consumers
Contents
Preface
A Prefatory Note
Introduction
Part I—Patent System and its Basic Elements
Part II—History of the Patent System
Part III—Indian Patent System: Safeguards National Interest
Part IV—Growth of Pharmaceutical Industry in India
Part V—New Patent Regime under TRIPs Agreement
Part VI—Transitional Arrangements and Patents (Amendment) Bill, 1995
Part VII—Impact of the Proposed Patent Regime on Pharmaceutical Sector
Page
Hi
iv
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4
7
10
13
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Part VIII—Patent System for Seeds
Part IX—Strategies for Third World including India
Annexure—Price Comparison
Quotations—Impact of strong Patent System
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Where the mind is without fear
and the head is held high;
where the knowledge is free;
Where the world has not been broken up
into fragments by narrow domestic walls;
Where the words come out from the depth of truth;
“
as its arms
ason
esert sand
ird
id action
ke.
math Tagore
Suggested C<
Published bj
B K Keayla
Community Health Cell
Library and Documentation Unit
BANGALORE
Convenor
National Working Group on Patent Laws
A-388, Sarita Vihar, New Delhi-110 044.
Tel: 694-7403 & 681-3311 Fax [91-11] 694-7403
'^r
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>
PREFACE
TheFinal Act embodying the results of the Uruguay Round of Multilateral Trade
Negotiations provides legal underpinnings for the international order premised on the
preservation and perpeturationof the profits and power of the transnational co-operation.
The Act foists on unequal treaty on the third world. The intrusion into and the
occupation of the sovereign economic spaces of the third world countries have been
formally sanctioned by the agreement contained in the Act. Nowhere is this process more
blatant than under the international regime visualised in the so-called TRIPs agreement.
Forus in India, its impact will be devastating. Conformity with the TRIPs agreement will
require virtual repeal of the Indian Patents Act, 1970. Various provisions which were
carefully built into this law to secure a better balance between the private profit and the
public welfare and to promote self-reliant technological development will have to be given
up. What is more, the change will have to be brought about rather rapidly contrary to the
claims made regarding the“facility” of the transition period.
Mr. B.K Keayla has lucidly brought out these implications in his essay on the
'Impact of the New Patent Regime' He has been in the forefront of the struggle carried on
by the National Working Group on Patent Laws against the impending changes. Now that
the Government of India have formally endoresed the Final Act, it becomes even more
urgent to analyse and expose the far reaching, adverse implications of such an
endorsement. Mr. Keayla has done precisely that with the wealth of facts and
arguments marshalled expertly in his essay.
New Delhi,
S.P. SHUKLA
Former Finance Secretary, Govt, ofIndia,
and Co-Chairman, National Working
Group onPatent Laws.
A
PREFATORY
NOTE
Mr. B.K. Keayla is a fighting figure in the campaign for the protec
tion of India's industrial potential and the prevention of foreign infil
tration which
renders
Indian
self-reliance
vulnerable and
Indian
consumers victimisable by multi-national corporations too powerful to
be controlled even by Government once they occupy our economic space in
strategic spots.
Mr. Keayla, with patriotic intelligence and imaginative
appreciation of the purposeful provisions for the Indian Patents Act,
has been waging an Information Struggle, as it were, so as to bring home
to the Parliamentarians and other leading elements in our public life
the perils that India will face if the new Patent Regime, now sought to
be forced on the country, is brought into operation.
The Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS) is fraught
with deleterious consequences to the health of the Indian economy. That
is why, in national interest, informed Indian opinion in and out of
Parliament has been challenging the proposed Patent Regime.
The wages
of surrender is death to the economy and, therefore, this new threat,
almost imperialist in its
intimidatory impact,
must be countered
effectively by the entire enlightened intelligentsia
as well as the
leading elements in the professions.
Other countries which have suffered
the neo-colonial experiments have provided us with anticipations of what
will happen if here in India we give in.
In this backdrop, the critical importance of the understanding,
inside out, of the prevalent Patent System of India and the toxic conse
quences of changes in the Patent System ter suit the appetite of foreign
invaders must be driven home to every Indian if economic swaraj, in its
progressive dynamics, is not to be jettisoned.
The implications of the
present Import Policies, together with the new Patent procedures, sought
to be sold to us under the GATT Scheme, require fuller appreciation by
the educated sections of Indians.
Who else than Mr. Keayla, with a long
record of working in the field of the Information Campaign, can perform
so well this militant yet essential task charged with national portents?
I have seen Keayla in action;
I have participated in his Seminars and
Symposia; I have heard him explain lucidly the need for safeguards in
the Indian Patent System;
I have found him reel off facts and figures
supportive of his substantive contentions;
I have been convinced of his
arguments against the new Patent Regime and its ominous portents for
domestic industry, R & D and Consumers.
In short, Keayla has a case
which he presents to the people on behalf of the Indian Republic in its
economic sovereignty and social justice dimensions.
He has prepared a long paper which dispels doubts, marshals facts,
carries convictions and exposes the machinations of MNCs with clout on
the Moghuls in Delhi.
I commend his paper to every reader within and
without the country;
I plead with every Parliamentarian and every
political echelon to rime and resist the new menace of economic
subversion.
Finally, I adopt and advocate the Keayla thesis and appeal
to the Central Cabinet and the Ministries in the States not to be myopic
but to be solidly behind the economic stability of the nation and the
social necessity of such policies as will benefit the lowliest and the
last who, to-day, have to pay the price of hunger and ill-health, high
price and resignnation to the destitution.
Gandhi and Nehru are not
dead.
V.R. KRISHNA IYER
Former Judge, Supreme Court of India.
January 1,
1996
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
(c)
3
Patent System; Rights and obligations
Over a period,
rights and obligations for the patent-holders
have been clearly defined in the national patent laws by various
countries. Generally, the rights conferred on the patentee are
the exclusive rights by himself, his agents or licencees to make,
use, exercise, sell or distribute article or substance of the
patent invention in the country that grants the exclusive rights.
Where a patent is for a method or process of manufacturing an
article or substance, exclusive right by himself, his agents or
licencees are available to use the method or process in the
country of such patent grant. As regards the obligations, the
patentee is required to manufacture the patented article or
substance to meet the full demand and also that he does not
exploit the right given to him by charging unfair monopolistic
prices for his products. In certain countries like India, such
obligations have been listed in the Patents Act itself as
"reasonable requirement of public interest" and they are legally
enforceable.
(d)
Compulsory Licence
Compulsory licensing is an important element of the patent system.
It helps in a way to ensure working of the patent in the country
which grants the patent. In the absence of this, particularly the
foreign patent holders would resort to imports rather than produce
the product in that country. In this way the role of the domestic
industry can be ensured through sub-licensing.
A compuslory licensing system is an authorization by the designated
authority for the purpose to a person other than the patentee to
do, without authorization by the patentee, acts which would
otherwise by excluded by the patent. The grounds upon which the
compulsory licence may be granted are specified in the patent
laws. The designated authority first decides, on the basis of an
application made by the person who seeks the compulsory licence,
whether the specified grounds have been established. The law also
requires that an application for a compuslory licence cannot be
made before the expiration of a specified period from the filing
date or the date of grant of the patent. The period most commonly
adopted for this purpose is four years from the filing date of
application or three years from the date of grant of patent,
whichever is longer. This period is also specified in the Paris
Convention, where the application for a compulsory licence can be
made due to non-working or insufficient working of the patented
invention. Non-availability of patented product at fair price is
also used as ground for sub-licensing. In the Indian patents Act
apart from compulsory licensing system, there is provision for
"licensing of right", which gives automatic right for exploitation
of patents by others.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
5
Venetian glassware. The earliest law concerning patents for
inventions appears to have been that passed in Venice in 1474. In
1594, Gallileo was granted under this law a patent for a device
for raising water and irrigating the land. Provision for compulsory
working of patented invention was incorporated in the French Law
in 1741. Other countries in'Europe also provided similar provisions
in their laws.
In America, patents were granted as early as 1641 although the
system proper started in 1790. This Act was amended in 1793 and
became closer in its terms to the U.K. Act. In USA also in the
recent past, there has been considerable debate about the choice
between competition and innovation in the pharmaceutical field
which has continued since investigation of the patent system by
Kefauver Committee in 1959. This committee found that
"Pharmaceutical patents led to high profits" and proposed that
patents be limited to three years only; beyond that time, the
patent holder should be required to grant licences to other firms
at a maximum royalty rate of 8 per cent. This recommendation,
though not implemented, had substantial indirect effect on the
stronger authority accorded to the Food and Drug Authority (FDA)
whose more comprehensive regulatory approval of new drugs replaced
in part the role of weaker patent monopoly. Further, again in USA
the hearing led by Rep. Henry Waxman of the House Energy and
Commerce Committee during 1988 on the prices of pharmaceutical
industry found that "since July 1985 drug prices had risen 4.5
times more than consumer price index" and that "between 1982 and
1986 revenue gains of 24 leading companies were three times
higher than the R&D increases". According to Rep. Waxman "an
attractive alternative to the problem would be to adopt the
Canadian compulsory licensing system which had proved its efficacy
in terms of hundreds of millions of savings to the drug consumers".
Thus even in USA, the pragmatic approach at highly responsible
levels other than pharmaceutical industry had been for the
application of the compulsory licensing system in some form or
the other to contain the prices of pharmaceuticals and to reduce
the cost of health care.
The German Patent Law of 1877 was enacted with only process
patents for chemical products (including pharmaceutical products)
to encourage development of innovative and cost effective processes
for the same. In fact, Germany provided an interesting example
about the evolution of process patent system. In 1876 when German
industry was in its infancy and the patent law was yet to be
evolved, Bismarck appointed a committee to study the likely
impact of the patent system on the industry. Among the members of
the committee were the founders of Siemens and Hoechst. Their
observations made an interesting reading:
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
6
"Today industry is developing rapidly
monopolization of
inventions and abuse of patent rights will inevitably expose large
segments of industry to serious injury. The Government must protect
industry against these dangers....These patents will not be taken
out in order to protect industrial plants established or to be
established in Germany; they will be taken out to monopolise production
abroad. These articles will be imported into this country. Such a
danger must be met."
The history of the patent system would be incomplete without the
mention of the Paris Convention administered by the World
Intellectual Property Organisation (WIPO). The Paris Convention
for the protection of industrial property was established in 1883
and has been revised six times. The amending Conventions are:
-
Brussels Convention,
Washington Convention,
Hague Convention,
London Convention,
Libson Convention,
Stockholm Convention,
1900
1911
1925
1934
1958
1967
All amending conventions have provided for stiffer provisions
granting more protection to patentees. The developing countries
are concerned, about social obligations for the patentee whereas
the Paris Convention does not provide for such obligations. It
even provides for maximization of individual rights to create
import monopolies (Art.5). Paris Convention does provide for
system of compulsory licence which can be applied on the ground
of failure to work or insufficient working after three years of
patent grant [Art.5(2)]. However, there is also provision that
compulsory licence "shall be refused if patentee justifies inaction
by legitimate reasons". The Paris Convention also provides for
members to ensure effective protection against "Unfair competition".
The only reason given is far contrary to honest practices.
There are over 100 countries who are now members of the Paris
Convention. Presently, WIPO is engaged in evolving a so called
harmonious patent system which is known as "Treaty Supplementing
Paris Convention". Some critics have observed that the provisions
of this Treaty are more onerous than even the patent system
provided in the TRIPs Agreement. As it is all the substantive
provisions of the Paris Convention (Articles 1 through 12 and
Article 19) shall have to be complied with by all members as
provided in Article 2 of TRIPS Text.
Insofar as the developing countries are concerned, the first
Patents Act relating to the grant of patent rights was passed in
India in 1856. The straits settlements (Singapore, Wellesely
Penang and Malacca) were made colonies independent of India in
April 1867. In November 1871 it received the patent law which
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
7
substantially followed the Indian laws. The basic features of
laws in the developing countries like India, Malaysia, Thailand,
Argentina, Brazil, Mexico, China, Egypt and Canada did follow the
principle of encouraging the role of the domestic industry in the
field of drugs and pharmaceuticals. In order to achieve this,
they had either excluded drugs and pharmaceuticals from the
patent system or had provided for only the process patent or the
method of manufacturing these substances. They had also provided
for compulsory licensing/licensing of right system to ensure that
monopolistic regime are not established by the patent holders
under the patent system and the domestic industry is able to play
its role in providing pharmaceutical products. Now these countries,
under pressure, either changed or are changing their patent laws
to provide for product patents in pharmaceutical products. In any
case, all the member countries of WTO have to change the patent
system as provided in the TRIPs Agreement. A simmering debate has
already been started by the public interest groups in most
countries, about the impact of the TRIPs patent regime on the
health care system.
PART III
INDIAN PATENTS SYSTEM: SAFEGUARDS NATIONAL INTEREST
India's first Patents Act of 1858 was replaced by a more
comprehensive patents and Designs Act in 1911. This Act was
designed to serve foreign interests. Following independence, one
of the first decisions taken by the national Government was to
change the colonial Patents Act. The new Patents Act was eventually
enacted in 1970 after in depth study by two high-power Committees,
headed by Justice Bakshi Tek Chand and Justice N. Rajagopal
Iyengar, and extensive discussions in both Houses of Parliament.
In amending its Patents Act, India took a considered decision to
stay outside the Paris Convention. The Iyengar Committee advised
the Government against India's joining the Convention on the
ground that she would lose her freedom to exclude certain areas
of development from patentability by foreign arid domestic interests
and revoke patents when they are not worked in the country. In the
recent past, several eminent jurists of the country and former
Chief Justices of the Supreme Court of India, viz. Justice M.
Hidayatullah, Justice Y.V. Chandrachud and
Justice J.C. shah
also advised against India joining the Paris Convention. According
to Justice Chandrachud "the creed of the Convention is the
protection of private rights, not the securing of public interest".
The jurists had doubted the constitutionality of the Paris
Convention and its provisions being forced on India ./The Indian
Patents Act, 1970 was hailed by many developing countries and
UNCTAD as one of the most progressive statute suitable as a model
for the developing countries. It safeguards the interest of both
the inventor and the consumer in a balanced manner. The interests
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
8
of the public have been given priority over the private interests
of the patent-holders. This Act is product of deep consideration
and long deliberation to synchronize with the Directive Principles
of State Policy contained in the Constitution which provides in
Article 39 that:
'
39. The State shall, in particular, direct its policy towards securing
"(a)
(b) that the ownership and control of the material
resources of the community are so distributed as best to subserve
the common good; and
(c) that the operation of the economic system does not result in the
concentration of wealth and means of production to the common
detriment".
The Indian Patents Act 197 0 is a landmark in the history of
industrial development and forms the basis for transfer of
technology. The Act devotes equal attention towards the industry,
the scientists, the consumers and the nation as a whole. It has
preserved the continuing interest of the inventor in his creation,
his social interest in encouraging research, the consumer interest
in enjoying the fruits of inventions at reasonable cost and
creation of conditions for the acceleration and promotion of
economic development of the country.
The important features of the Indian Patents Act 1970 can be
judged from the obligations which have been laid down for the
patent-holder for working the patent to satisfy the reasonable
requirement of the public and such conditions have been laid down
in Section 90 as follows:
"90. When reasonable requirement of the public deemed not satisfied:
(a) If, by reason of the default of the patentee to manufacture in
India to an adequate extent and supply on reasonable terms the
patented article or a part of the patented article which is necessary
for its efficient working or if, by reason of the refusal of the
patentee to grant a licence or licences on reasonable terms (i) an existing trade or industry or the development thereof or the
establishment of any new trade or industry in India or the trade or
industry or any person or classes of persons trading or manufacturing
in India is prejudiced; or
(ii) the demand for the patented article is not being met to an
adequate extent or on reasonable terms from manufacture in India- or
(Hi) a market for the export of the patented article manufactured
in India is not being supplied or developed; or
(iv) the establishment or development of commercial activities in
India is prejudiced; or
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
9
(b) if, by reason of conditions imposed by the patentee upon the
grant of licences under the patent or upon the purchase, hire or use
of the patented article or process, the manufacture, use or sale of
materials not protected by the patent, or the establishment or
development of any trade or industry in India, is prejudiced; or
(c) if, the patented invention is not being worked in India on a
commercial scale to an adequate extent or is not being so worked to
the fullest extent that is reasonably practicable; or
(d) if, the demand for the patented article in India is being met to
a substantial extent by importation from abroad by (i) the patentee or persons under him; or
(ii) persons directly or indirectly purchasing from him; or
(Hi) other persons against whom the patentee is not taking or not
taken proceedings for infringement; or
(e) if, the working of the patented invention in India on a commercial
scale is being prevented or hindered by the importation from abroad
of the patented article by the patentee or the other persons referred
to in the preceding clause".
Another important feature of the Indian Patents Act, 1970 relates
to the exclusion from patentability of technologies relating to
atomic energy and inventions relating to agriculture and
horticulture products or methods. As regards the chemical based
products, the Act provides that "only methods or processes of
manufacture claimed for substances intended for use or capable of
being used as food or as medicine by chemical processes including
alloys, optical glass, semi-conductor and inter-metallic compounds,
would be patentable and that as such no patent shall be granted in
respect of claims for the substances themselves". It is because
of this provision that it has been possible for the scientists
and entrepreneurs in India to develop alternative process
technologies which have helped the pharmaceutical industry to
produce new drugs in the country in a relatively shorter period.
The salient features of the Patents Act 1970 thus deals with :
Exclusion of certain fields from patentability;
No product patents in some other important areas;
Shorter period of patent protection;
Importation not treated as working of patent;
Compulsory licensing and licence of right to ensure working;
Ceiling on royalties on sub-licensing of patents.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
10
PART IV
GROWTH OF PHARMACEUTICAL INDUSTRY IN INDIA
(a)
Process Research
Table: 1 indicates the basic drugs manufactured by the domestic
sector companies in India based on indigenously developed process
technologies. Table 2 indicates the time lag between the
introduction of a new drug in the world market and its introduction
in India after the domestic enterprises have developed technologies
to manufacture the products.
Table : 1
Basic Drugs Manufactured by Domestic Sector Companies
Based on Indigenously Developed Process Technologies :
Effect of the Process Patent System
1. Acetazolamide
2. Allopurinol
3. Amitryptiline
4. Amidaqine
5. Amoxycillin
6. Ampicillin
7. Analgin
8. Aspirin
9. Atenolol
10. Betamethasone
11. Caffeine
12. Ca. Sennosides
13. Carbamezapine
14. Cephaclor
15. Cephazoline
16. Cephalexin
17, Chloramphenicol
18. Chlordiazepoxide
19. Chlorpropamide
20. Chloroquine
21. Cimetidine
22. Ciprofloxacin
23. Cisplatin
24. Clonidine
-Clofibrate
25.
26. Cioxacillin
27. Cyproheptadine
28. Danazol
29. Dapsone
30. Dexamethasone
31. Dextropropoxyphene
32. Diazepam
33. Diloxanide Furoate
34. Diphenylhydantoin
35. Diphenhydramine
36. Doxycycline
37. Emetine
38. Ephedrine
39. Erythromycin
40. Ethambutol
41. Ethinyl Estradiol
42. Florafur
43. Folic Acid
44. Frusemide
45. Furazolidine
46 Gentamycin
47. Glipimide
48. Glibenclamide
49. Guaphenesin
50. Griseofulvin
51. Heparin
52. Hydrochlorothiazide
53. Hydoxyprogesterone
54. Hydroxyzine
55. Ibuprofen
56. Indomethacin
57. Isopropylantipyrine
58. Kanamycin
59. Ketorolac
60. Lorazepam
61. Mebendazole
62. Metoprolol
63. Metoclopramide
64. Metocarbamol
65. Methyldopa
66. Metranidazole
67. Nalidixic Acid
68. Naproxen
69. Niacinamide
70. Nicotinamide
71. Nifedipine
72. Nitrazepam
73. Nitrofurantoin
74. Norethisterone
75. Norfloxacin
76. Ofloxacin
77. Paracetamol
78. Pethidine
79. Pentazocine
80. Phenarimine
81. Piperazine
82. Piracetam
83. Progesterone
84. Propanolol
85. PVT-lodine
86. Povidine Iodine
87. Pyrental Palmoate
88. Pyrazinamide
89. Quinidine
90. Quinine
91. Ranitidine
92. Roxitidine
93. Salbutamol
94. Silver Sulphadiazine
95. Sulphacetamide
96. Sulphamethoxazole
97. Sulphamoxole
98. Terbutaline
99. Theophylline
100. Thiacetazone
101. Timolol Maleate
102. Tinidazole
103. Trimethoprim
104. Triazolin
105. Vinblastine
106. Vincristine
107. Vitamin B12/
other Vitamins
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
11
Table 2:
Time Lag Between Introduction of a New Drug in the
World Market and its Introduction in India
Drug
Salbutamol
Mebendazole
Rifampicin
Naproxen
Bromhexin
Ranitidine
Captopril
Norfloxacin
INTRODUCED (Year) In
World Market
by the inventor
Indian Market by
domestic cos.
1973
1974
1974
1978
1976
1981
1981
1984
1977
1978
1980
1982
1982
1985
1985
1988
Time lag:lntrdn
in India (Yrs.)
4
4
6
4
6
4
4
4
In view of indigenously developed process
technologies, the
pharmaceutical industry has been able to produce basic drugs
covering various therapeutic groups and achieve near selfsufficiency in the production of bulk drugs in the country. The
industry has also developed capabilities of producing enough
surplus of basic drugs and formulations for exports worldwide.
(b)
Production
(i)
Pharmaceutical Industry
After the Patents Act, 1970 was enacted, the production of
pharmaceutical products has grown more than sixteen-fold: from
Rs. 500 crores in 1974 to over Rs. 8,000 crores in 1994-95. In
recent years, there has been a sharp rise in exports also by the
industry: between 1985-86 and 1994-95 exports have grown fourteen
times from Rs.140 crores to over Rs. 2,000 crores. The domestic
industry has thus greatly helped in providing not only drug
security in the country but has also succeeded in getting access
to foreign markets both in the developed and developing countries.
The Indian industry has emerged as world leader in production of
bulk drugs like Ciprofloxacin, Dextrapropoxyphene, Ethambutol,
Ibuprofen, Norfloxacin, Sulphamethoxazol, Trimethoprim, etc.
Ranbaxy, Cipla, Cadila, Alembic, Lupin, Torrent, Sarabhai, etc.
have emerged as major Indian companies meeting requirements of
all kinds of drugs in the country.
(ii)
Pesticides Industry
The pesticides industry in India has made impressive progress and
today more than 60 technical grade pesticides are being successfully
manufactured in the country. Some 135 units are currently engaged
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
12
in the manufacture of these technical grade pesticides and over
500 units are making pesticide formulations. As a result of the
increased production of pesticides in the country import .of
technical grade pesticides has come down considerably. The estimated
production of technical grade pesticides during 1994-95 is over
85,800 MT from an annual installed capacity of 1.25 lakh MT.
In order to use the idle capacity available with pesticide units
the country has been able to enter the competitive field of
export of pesticides. During 1993-94 the industry had exported
pesticides valued at 261.20 crores.
The industry has started producing some new pesticides but are
continuing to import the intermediates in the absence of technology
for producing them. Efforts are being made to acquire the right
technology to manufacture intermediates for pesticides like
Butachlor, Endosulfan, etc.
The capacity and production of some of the important technical
pesticides during the years 1992-93 and 1993-94 are as under:
Table-3
Production of Pesticides
(Quantity 000 tonnes)
Item
1992-1993
Capacity Production
1993-1994
Capacity Production
(Estimated)
Malathion
Methyl Parathion
Dimethoate
D.D.V.P.
Monochrotophos
Phorate
Mancozeb
Isoproturon
Alumunium
Phosphate
7.6
4.5
2.3
2.3
8.5
3.7
4.0
3.1
1.3
2.3
2.1
2.2
1.7
6.2
3.2
3.6
2.1
1.0
7.6
4.5
2.3
2.3
8.5
3.7
4.0
3.1
1.3
2.4 2.2
2.4
2.0
6.5
3.5
4.0
2.5
1.1
(c) Prices
There is competitive environment in the pharmaceutical field
because of the patent system and as such pharmaceutical products
are available in India at the lowest price compared to the other
countries. As against these, prior to the enactment of the Indian
Patents Act, 1970 the prices of drugs in India were "amongst the
NEW PATENTREGIMEj^IMPUCATlONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
13
highest in the world" as commented by an American Senate Committee
headed by Senator Kefauver. The industry in India was then dominated
by the drug multi-national companies who could use the colonial
product patent regime provided by the Patents and Designs Act of
1911, to reap enormous profits from the Indian markets. The
growth of the domestic pharmaceutical industry due to the Patents
Act of 1970 reversed the situation on the price front.
PART V
NEW PATENT REGIME UNDER TRIPS AGREEMENT
I. Main Features
(a)
Preamble
The preamble of the TRIPS Agreement "recognizes the need for
multilateral framework of the principles, rules and discipline in
international trade in counterfeit".
[According to U.S:
interpretation, the goods produced in India even by legally
taking process patents, are counterfeit goods.]
The preamble
also "recognises the intellectual property rights as private
rights". Even though many other countries including India are not
members of the Paris Convention, according to Article 2 of the
TRIPS Agreement "the members shall comply with Articles 1 through
12 and Article 19 of the Paris Convention (1967)."
These provisions clearly amplify the designs of the MNCs who are
behind the global and monopolistic patents system in the TRIPs
Agreement.
(b)
Objectives and Principles
Article 7 of the Agreement provides that "the protection and
enforcement of intellectual property rights should contribute to
the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers
and users of technological knowledge and in a manner conducive to
social and economic welfare, and to a balance of rights and
obligations". Similarly, Article 8 of the Agreement provides that
"Members may, in formulating or amending their laws and regulations,
adopt measures necessary to protect public health and nutrition,
and to promote the public interest in sectors of vital importance
to their socio-economic and technological development, provided
that such measures are consistent with the provisions of this
(TRIPs) Agreement."
The above prima facie appear to be laudable objectives. However,
the proviso in Article 8 takes away the utility of the principles
NEW PATENT REGIME : IMPUCATIONSFOR^DOMESllCJNDUSI^, R&D AND CONSUMERS
14
stated in Articles 7 & 8 as the domestic laws will have to be
changed within the framework of the TRIPs Agreement. Certain
experts argue that provisions in these articles could be used to
subserve national interest in vital areas by introducing the
system of sub-licensing, but some others have expressed serious
doubts about the utility of these provisions for transfer of
technology or for sub-licensing of patent ' rights. The latter
argument, however, seems more logical when viewed against the
designs of powerful interests.
(c)
Scope of Patentability
The scope of patentability in TRIPs Agreement has been greatly
enhanced and according to Article 27 patents shall be available:
-
for any invention whether products or processes in all
fields of technologies;
protection will also be extended to:
*
Micro organisms,
*
non-biological and micro-biological processes, and
*
plant varieties either by patents or by an effective
sui generis system or by any combination thereof.
Thus the scope of patentability has been extended to the entire
industrial and agriculture sectors and to an extent the biological
sector also. No flexibility is available to any country to exclude
certain vital areas of economy from patentability in the domestic
laws.
(d)
Working of Patents : a non-issue
An important aspect of working of the patent in the new patent
regime is being totally changed. Imports are generally not regarded
as working of the patent in the national laws. All along the
patent holders had the obligation to work the patent as an
important element of the system. Even the Paris Convention
recognises working of the Patent in the country which grants the
Patent. In fact non-working is considered to be an abuse of
Patent Rights under the Paris Convention (Art. 5A) . The TRIPs
Agreement, according to Article 27, provides that: "patents shall
be available and patent rights enjoyable without discrimination
as to the place of invention, the field of technology and whether
products are imported or locally produced".
The provision for providing patent protection for imported products
at par with locally produced products is a major deviation. Even
while granting exclusive rights under Art. 28 for products and
processes, exclusive rights have been given for making, using,
offering for sale, selling or importing. The implication of this
provision is that the patent holders will have no obligation as
such towards the national government conferring the patent rights
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
15
under the new patent system. There will be free flow of imports of
patented products. It will not be possible to regulate the prices.
As price control system cannot be extended to imported products,
patented products would be sold at relatively much higher prices.
The dependence upon imports would increase substantially.
(e)
Authorization for use of Patent
Art. 31 deals with "other use without authorization of the right
holder". The provisions under this article are in no way comparable
to the usual provisions of "compulsory licensing", "licences of
right" or "revocation of patents" for non-working. For commercial
use, it would not be possible to issue any authorization as the
scope of authorization under this article is for a limited period
and for a limited purpose.
Unless the authorization or sub-licensing is for-commercial purposes
without any condition or restriction, this article provides absolute
monopoly to the patent holder. Even the authorization for other
uses which are generally for experimental purposes for research
or for educational purposes, the conditions are quite unreasonable.
In such cases also, the "right holder shall be paid adequate
remuneration in the circumstances of each case taking into account
the economic value of the authorization". Compensation at economic
value for non-economic purposes virtually removes the possibility
of transfer or diffusion of technology at low cost in public
interest.
Virtually the scope of authorization under this article is for a
limited purpose and limited duration for non-commercial purposes
only, which will not serve any purpose of meeting the requirements
of general public when the patent holder is exploiting the market
in monopolistic manner.
(f)
Term of the Patent
Article 33 deals with the term of protection which shall not end
before the expiration of a period of twenty years counted from
the filing date. Since patentability extends to products or
processes, the term would be applied for twenty years for product
patent and then twenty years for process patent particularly in
chemical field, including drugs and pesticides . In the case of
drugs and medicines, patents are available in U.S.A, for usage
form, dosage form and combinations. Table-4 (next page) gives an
idea of new combinations for which patents are being taken in
.U.S.A, even when product patent on the basic drug expired long
back.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
16
Table 4
Illustrative List of Combinations
Under Patent in USA
Generic Name
and Patent
Expiry Year
Aspirin
(1973)
Diazepam
(1980)
Patent Expiry
Date
Brand and
Company Names
Dosage/ Formulations
SOMACOMPOUND W.
CODEINE
Wallace Labs.
a) Aspirin 325 mg + Carisoprodol 200 mg +
Codeine Phosphate 16 mg
b) Aspirin 325 mg + Carisoprodol 200 mg
13/8/2002
VALIUM
Hollman La Roche
a) 10 mg tab
b) 2mg tab
c) 5 mg lab
d) 2 mg/ml inj
e) 15 mh Cap
23/2/1999
23/2/1999
23/2/19'99
23/2/1999
23/2/1999
VALRELEASE
13/8/2002
Diltiazem Hcl
(1988)
CARD1ZEM SR
Marion Labs
a) 120 mg Caps
b) 180 mg Caps
c) 60 mg Caps
d) 90 mg Caps
26/10/2005
26/10/2005
26/10/2005
26/10/2005
Hydrochlorothiazide
(1979)
PRINZ1DE- 12 5
Merck Sharpe & Dhome
a) 12.5 mg + Linosporil 20 mg tabs ■
30/12/2001
Methyldopa (1976)
ALDOMET
Merck Sharpe & Dhome
250 mg/ml suspensio
13/09/2000
Norfloxacin (1996)
NOROXIN
Merck Sharpe & Dhome
400 mg tabs
27/01/2004
Oxazepam (1984)
SERAX
Wyeth Labs
a) 10 mg Caps
b) 15 mg Caps
c) 30 mg Caps
04/11/2003
04/11/2003
04/11/2003
a) Eq. 15(1 mg base tab
b) Eq. 15 mg base/ml syrup
c) Eq. 25 mg base/ml inj.
d) Eq. 300 mg base tab.
e) Eq 50 mg base/ 100ml inj.
5/12/1995
29/04/2003
29/04/2003
04/06/2002
29/04/2003
Ranitidine Hcl (1995) ZANTAC 150
ZANTAC 300
Glaxo
Source : FOI Services Inc., USA
The patent protection under the TRIPs patent system thus would be
used for extending monopoly by taking process patents and patents
for usage form, dosage form and combination form. This monopoly
would be extended to the existing products where the product
patents have expired long back.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
17
New Processes would be patented and new dosage form, etc. would
also be patented. This kind of protection would have a far
reaching implication in a country like India and in a period of
10-15 years the patent protection in some form or the other would
cover almost 7 0-80 per cent, if not more, of turnover in the
pharmaceutical field. It would become impossible for the domestic
industry to subsist without new products and it would also affect
their business in the existing products. Their survival would be
under a serious guestion mark.
(g)
Reversal of burden of proof
Article 34 provides for reversal of burden of proof during the
process patent regime. The onus of proving that the new process
is totally different than the patented process would lie with the
defendant and he will have to prove that he is not guilty. This
provision would also be misused by powerful MNCs to curb competition
from others even when their process may be different. Keeping
this in view, the legal system to check infringement has to be
carefully evolved.
PART VI
TRANSITIONAL ARRANGEMENTS AND
(a)
PATENTS (AMENDMENT)BILL, 1995
Transitional Arrangements
Part VI of the TRIPs Agreement deals with the tansitional'
arrangements. Developing countries are entitled to delay the
application of the TRIPs Agreement by five years as against one
year for the developed countries from the date of entry into
force of the agreement establishing the World Trade Organisation
(WTO) which was January 1, 1995. Countries who do not extend
product patent protection to areas of technology not so protectable
on 1.1.95 (like India where technologies relating to atomic
energy and chemical based products are exempt from product patent)
can delay the application of the provisions of the product patents
to such areas of technology for an additional period of five
years. This transitional arrangement has been set out in Article
65 of the TRIPs Agreement.
The above consideration has, however, been drastically curtailed
in paragraphs 8 & 9 of Article 70 of TRIPs Agreement. In the
fields of technologies relating to pharmaceutical and agriculture
chemical products, "means (arrangements) for accepting patent
applications commensurate with the obligations under Article 27
of TRIPs Agreement will have to be established (by January 1st,
1995) when the World Trade Organization comes into force." Further
exclusive market rights will also have to be provided for these
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
18
applicants for a period of five years from 1995 onward itself
after they have taken the marketing approval from the concerned
national drug/pesticide control authorities. Such arrangements
will obviously have to be established by changing the existing
patent laws by Parliament.
The grant of exclusive marketing right is as good as the product
patent for pharmaceuticals and agro chemicals. The exclusive
rights shall get established from 1995 itself for new products
and not that the new applicants will have to wait for a period of
ten years for enforcing the product patent rights.
Even for those developing countries who do not have product
patent system for pharmaceuticals and agro chemicals, almost all
the provisions relating to the new patent regime under the TRIPS
agreement will come into force in a period of five years i.e. by
2000 A.D. As stated earlier, some of the important provision will
come into force even from the year 1995. Thus consequences of
high monopolistic prices and inability of producing new drugs by
the domestic industry in the developing countries, including
India will be experienced immediately on extending of the system
of exclusive marketing right.
The most contentious provision is contained in para 9 of Article
70 that exclusive marketing rights will have to be given, if the
patent applicant has taken patent or marketing approval in any
other member country (which may be a small country like Malta,
Mauritius etc. not having an adequate system on the subject).
This would mean introduction of new drugs in our country without
any proper clinical trials. This kind of provision will have to
be totally rejected.
(b)
Patents (Amendment) Bill, 1995
The Government promulgated an ordinance to amend the Patents Act
1970 on December 31, 1994.
Later in the budget session of
Parliament, Government introduced the Patents (Amendment) Bill,
1995 to replace the Ordinance. The bill was passed by the Lok
Sabha in spite of strong opposition by Members of Parliament
belonging to the Opposition parties. The Government, however,
could not introduce the bill in Rajya Sabha as they were not sure
about the passing of the bill in that House.
Government
has
now succeeded in referring the bill to a Select Committee of
Rajya Sabha for detailed examination.
The analysis of the bill indicates that the amendments proposed
are neither in the national interest nor are they in consonance
with the provisions of the TRIPs Agreement. The objections to the
bill are broadly as follows :
NIEW PATENTREGIMEj^IMPUCATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
19
(i) The amending bill provides for exclusive rights to "sell or
distribute". This may not be tenable under the MRTP Act. The
TRIPS Agreement provides for "exclusive marketing right" and the
bill also should have provided for the same. (This amendment is
not in consonance with the TRIPs Agreement).
(ii) The examination of the patent applications, as provided in
the bill, is supposed to be kept pending till 31st day of December,
2004. It would not be desirable to keep the applications unattended.
They should be examined immediately in accordance with the
provisions in Chapter IV of the Patents Act, 1970. There cannot
be any compromise on this requirement. Postponing the examination
is fraught with all kinds of complications.(This amendment is not
in consonance with the TRIPs Agreement).
(iii) For grant of exclusive marketing right it is important that
the inventor should either take the patent rights or exclusive
marketing right in his own country to secure these rights in our
country. Similarly if the patent application for that subject
matter has been rejected any where including the country of
invention, the same should be specifically mentioned in the
application. (This is to protect our national interest.)
(iv) If the subject matter of the patent application is already
in public domain, the grant of product patent or the process
patent should not be allowed. The bill is just doing the reverse.
There is even no provision in the bill to examine "public domain
angle". (It is not understood as to why we are doing this.)
(v)
Compulsory licensing has been provided for in the bill for
the exclusive right to "sell or distribute". This kind of right
has no meaning as under the stated contingencies another source
for availability of the product has to be created.
As such the
compulsory licensing should be for local production to overcome
the contigencies. (This is not against Art. 70)
In view of the above objections, the amending bill is not in the
national interest and as such should not be passed by Parliament.
PART VII
I
%
IMPACT OF THE PROPOSED PATENT REGIME
ON PHARMACEUTICAL SECTOR
The specific fall-out of the changes that would be made in the
patent laws on the basis of provision in the TRIPs Agreement
would be manifold. The TRIPS Agreement is a disaster for consumers
all over the world and for small and medium scale industries in
the developing world including India. The consumer would be hit
20
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
by high prices and erratic availability of pharmaceuticals,
pesticides, seeds, etc. and domestic industry would face the
question of survival. In the words of Mr.Ralph Nadar, a well
known consumers advocate in U.S.A., the consumer in U.S.A, would
also be hit. He made the following statement at the National
Press Club (U.S.A.) on April 12, 1994:
"Nothing is more likely to pull down our present US consumer and
environmental projections and derail future advance than the proposed
expansion of a global trade agreement called the Uruguay Round of
the General Agreement on Tariffs and Trade (GATT)." This statement
applies to all Agreements under the Final Act including the TRIPs
Agreement.
(a)
Impact on prices
The main impact would be on the prices of medicines which would go
up several times making it extremely difficult for the poor
people to afford them. Two specific examples of drugs marketed by
the same MNCs in four countries are given here to support this
point. In India there is process patent at present for medicines
whereas in three other countries, viz. Pakistan, UK. and U.S.A.,
there is product patent regime for medicines.
It is because of the patent system in these countries that the
price differential is so high, as indicated in Table 5 below:
Table 5
Price Comparison of Medicines
(Prices converted into Indian Rupees)
Drugs/Brand
Company
India
Pakistan
U.K.
U.S.A.
Ranitidine
(Zantac)
3Q0 mg x 10s
Glaxo
18.53
260.40
484.42
1050.70
(14.05)
(26.14)
(56.70)
55.80
96.46
334.95
(11.27)
(19.49)
(67.67)
Times Costlier
Diclofenac Sodium
(Voveran)
50 mg x 10's
Times Costlier
Ciba
Geigy
4.95
When our country will switch over to new TRIPS patent system, the
prices are bound to go up very high. The price comparison between
the four countries for many other medicines is given in the
Annexure attached.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
(b)
21
Impact on Availability
The availability of new drugs from indigenous sources of the
domestic companies would be totally out of question. Dependence
upon imports would go up as it has started happening in some Latin
American countries, Canada and even Italy, who have changed their
patent laws recently. Our country would also face similar phenomena
in the coming future.
The following report from SCRIP of MAy 24,
this point:
1994, substantiates
"ALIFAR DENOUNCES US PATENT MOVES
Plant closures in Chile and increased levels of drug import to Mexico
have followed the introduction of 'monopolistic' patent laws in these
countries. Although both laws were drawn up in line with US requirements,
there is renewed pressure from the US to increase patent protection
periods from 15 to 20 years in Chile and from 20 to 23 years in Mexico ,
according to speakers at the 15th meeting of the confederation of Latin
American Industry associations (Alifar).
The trade benefits and investments which were promised in exchange for
the implementation of a 'US-style' patent laws have never materialized,
the Chilean representatives maintained. The Argentinian government 'should
look at its neighbours, see what is happening to us, and realise that the
promises were false', Muriam Orellana, executive director of the Chilean
national industry association, (Asilfa), declared. (The Argentinian draft
patent law currently being considered by Senate).
Asilfa president Jose Plubins commented that five multinationals - Pfizer,
Parke-Davis, Squib, Bayer and Schering AG had closed manufacturing plants,
and started importing to Chile, as allowed by the patent law.The closures
have resulted in many job losses, he said. While there have not been any
plant closures in Mexico, drug imports by multinationals have been
increasing, according to Rafael Gual, executive director of the Mexican
association, Anafam.
There was much criticism at the meeting of US government pressure on
countries throughout tjie region to implement new patent laws, and calls
for the US to respect the GATT Uruguay Round agreement, which gives
developing countries a 10 year transitional period to do so. LatinAmerican governments should defend national interests by drawing up
patent laws which take into account the needs of national companies and
consumers, and respect GATT recommendations, ALIFAR says.
There were also speakers from the US at
the meeting who denounced the
conduct of US pharmaceutical companies. For example, Professor Stephen
Schondelmeyer, director of the pharmacy faculty at the University of
Minnesota., criticized US drug price levels noting that the oral
contraceptive Ortho Novum costs $20 in the US, $3 in Argentina, $1.60 in
Mexico and $1.20 in France. Peter Arno from the Albert Einstein school
New York said that eight million Americans over the age of 55 have to
choose between buying food and drugs" . Paula Begala an adviser to President
Bill Clinton, criticized the 'alarmist campaign' mounted by US companies
against the health system reform plans.
The meeting was held in Argentina and attended by national industry
associations from Brazil, Colombia, Chile, El Salvador, Guatemala, Mexico,
Paraguay, Peru, the Deminical Republic, Uruguay, Venezuela and Argentina./^
Gi-//O
oh-3-1.6
<
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND jXJNgUMERS
(c)
22
Impact on Medium and Small Scale Sector
The existing industry, particularly in the medium and small scale
sectors, where there are thousands of registered units, will over
a period of a decade or so after the introduction of the new
patent regime, face serious degrowth as they will have no
possibility
of taking up new products. Even for the existing
products/processes, new patents will be taken creating difficulties
for such companies to market their existing products. This will
result in large scale unemployment, making existing infrastructure
redundant and liquidation of competitive environment and closure
of many small units.
(d)
Impact on Research and Development
The impact on domestic research and development activity in the
developing countries would also be tremendous. Due to paucity of
funds, particularly in drugs and pharmaceuticals field, the research
in the public and private sectors in our country has been mainly
concentrated on developing process technologies. This kind of
research effort going on would be severely affected as there
would be no immediate use of process technologies for new drugs
in the new patent regime as it would not be possible to commercially
exploit them. For basic research neither funds nor capabilities
to exploit any such invention worldwide are available with the
domestic companies. They do not have infrastructure to match the
MNCs for registering patents worldwide and promoting and marketing
thir products in various countries.
It would be relevant to mention here that U.S. Pharmaceutical
industry spent $8.2 billion in 1990, $9.1 billion in 1991, $10.96
billion in 1992 and $12.6
billion in 1993 on R&D, and their
worldwide sales during 1990 was $57.4 billion. With enormous
resources only MNCs can afford to spend large sums on R&D . For
MNCs, the entire world is market for them and they spend large
sums on R&D to monopolies the markets world over with their
innovation products. Table 6 gives an idea of sale turnover and
investment in R&D of the top ten MNCs.
It will be observed from Table 6 that Ingelheim spent 19.2%of
their total sales on R&D. Compared to this, Ranbaxy, the largest
Indian company, invested last year over 6% of its sales on R&D. We
are substantially low in profitably and volume of sales for
committing our resources for R&D. Sales of our large enterprises
have to multiply manifold before they could make any worthwhile
investment in R&D. The total pharmaceutical production in India
is around $2500 million whereas almost all the 10 MNCs (Table 6)
individually are having sales more than what India is producing.
Further, our total expenditure on R&D is about $50 million per
annum for drugs and pharmaceuticals. There is virtually thus no
comparison.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
23
Table 6
Leading Companies by Nominal Pharma R&D
spending in pharmaceuticals, Script Review 1993-94
Company
Sales
($ mill.)
R&D
($ mill.)
R&D as %
of sales
1. BMS
2. Glaxo
3. Hoechst
4. SB
5. Bayer
6. Sandoz
7. J&J
8. B.Ingelheim
9. Rhone-Poulenc
10. MMD
4,439.2
4,679.5
4,410.6
3,668.8
4,237.8
3,464.1
2,652.0
1,914.4 .
2,784.6
2,211.0
657.0
654.2
613.3
552.5
487.2
484.1
419.0
367.0
350.9
329.0
14.8
13.9
13.9
15.1
11.5
14.0
15.8
19.2
12.6
14.9
The profitability of the Indian industry for various reasons is
also quite low. In the past, it has been around 4-5% of sale
turnover and now it has slightly improved to 6-7% of sale. As
against this the MNCs are enjoying substantially high profits.
For example, Zantac (Ranitidine) which is a top selling drug in
the world, produced and marketed by Glaxo, has been enjoying
quite a high profit. Glaxo holds worldwide product patent wherever
such patents are available. Their sale turnover of this drug
during 1994 was $ 4,011 million and they earned profit in 1992
around 35% on their pharma sales.
The above statistics are only indicative of the problems which
the domestic companies in developing countries, including India,
have been facing. It would be impossible for them for many more
years to embark upon any programme of basic research in a big way.
In fact, domestic companies will never be able to match with MNCs
potential in R&D, sale turnover and worldwide infrastructure for
patenting and promotion of their products. Further, there are
many other regulatory hurdles of safety and efficacy during a
long and difficult development period from discovery to registration
which will also have to be cleared before pharmaceutical patents
lead to saleable products. Additionally, financial risk is too
high as there are equal possibilities of success or failure. Thus
pharmaceutical patents by themselves would be industrially
meaningless if the owner of the patent is not able to organise all
these basic requirements before launching his product.
In the background of these hurdles, the need is to continue with
the existing role in R&D for developing innovative processes for
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
24
old and new drugs and this can be achieved by having a strong
system of compulsory licensing by paying adequate compensation
to the patent-holder . Further, to achieve significant performance
on the basic R&D front in India, Government will have to come
forward in a big way to support public and private efforts on a
long term basis. Indian scientists are second to none.The need is
for a strong back-up of fiscal concessions to achieve significant
results. In regard to tax concessions for R&D the following broad
suggestions need to be considered by the Government :
(a)
The Income Tax Act provided for deduction under Section
35(2B) which was available to the assessee during 1980-1984. This
deduction was to be approved by the prescribed authorities having
regard to the socio-economic and industrial climate in the country.
The existing provision for allowing the expenditure on scientific
research fully as per Section 35(1) (i) is not sufficient. It
could be raised to weighted average reduction at 133% of expenditure
incurred by the assessee on any scientific research as was available
during 1980-1984.
(b) The recurring expenditure on consumption of raw materials
also needs fiscal concessions. The imported raw materials and
indigenously procured raw materials could be available for research
free of customs duties and excise duties respectively.
(c) The State Governments where the research centre may be set up
should provide land at a nominal cost. The requirement of each
centre for land could be determined by a high level committee
under the Department of Scientific and Industrial Research.
(d) The capital expenditure on land and building could be provided
as interest free loan by the Central Government to be recovered
over a period of 20 years.
(e) Any sum paid for scientific research to universities, colleges
or other institutions could also be allowed for deduction under
the Income Tax Act in full.
The above are a few suggestions in the direction of providing
impetus for basic research.
PART VIII
PATENT SYSTEM FOR SEEDS
Article 27 of the TRIPS Agreement provides that "member countries
shall provide for the protection of plant varieties either- by
patents or by an effective sui generis system or by any combination
thereof". In the same Article, it is also provided that "the
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
25
provision of this sub-paragraph (relating to protection of plant
varieties) shall be reviewed four years after the date of entry
into force of the WTO Agreement ( i.e. January 1995)". Thus it is
expected that review of system of protection of plant varieties
would be undertaken during 1999 and global model would be evolved
as in the case of other patents for implementation by all member
countries. Though for the time being, choice of evolving the
system of protection of plant varieties is left to each country,
the obligatory provision is that the sui generis system (meaning
a system of its own ) must be effective. The criteria for judging
the effectiveness of sui generis system has not been specified in
the TRIPs Agreement. This again confirms that only temporary
respite has been provided to the member countries. Ultimately
only the multilateral system will judge the effectiveness of the
system and provide for the same.
The transitional arrangements provided in Art.65 of the TRIPs
Agreement allow developing countries a period of five years to
establish their own system of plant breeders rights (PBRs) which
means that there is no obligation to evolve the system as such
till 2000 AD. In view of this, there should be no urgency to enact
the PBRs system and the developing countries are better advised
to wait for the review of this system in 1999. Further, it could
also be interpreted from Article 65(4) that "those developing
countries who do not extend product patent protection to areas of
technology not so protectable in their countries could delay the
application of the provision on product patent by an additional
five years." Opinions differ as to whether seeds could be treated
as "products". Even so, the interpretation of■seed as a product
should be liberally interpreted by the developing countries to
their advantage which will mean that effectively ten years would
be available to them for actual application of plant breeder
rights. Ten year period is a long period and developing countries
can watch the development in the world to take the best advantage
of any favourable conditions that might emerge.
Though no specific model has been suggested in the TRIPs Agreement
for PBRs there are models available in UPOV Convention 1978 and
UPOV Convention 1991, apart from the model of the draft Treaty
Supplementing Paris Convention. The UPOV Convention was initially
adopted by the developed countries and its membership was restricted
to only five European countries till 1978. At that time, the
Convention was revised and membership was opened to all countries.
Currently UPOV has twenty member countries including European
countries, Japan and the USA. It has no developing country as its
member. In view of this, the model which has emerged in the UPOV
Convention for plant variety legislation is suitable mainly in
the socio-economic context of industrialized
countries. The
farmers in these countries do not have much role over plant
breeding or seed supply as in the case of the developing countries,
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
26
where farmers themselves are engaged in the seed production and
they were also the main source of supply of seeds to other fellow
farmers. Almost about 65 per cent of the seed requirement is met
through the exchange system which has been prevalent in countries
like India.
In the past, UPOV Convention protected farmers interests by
allowing them to save protected varieties of seeds. This protection
to farmers was retained in the amendment to the UPOV in 1978. The
breeders also enjoyed exemption for free access to protected
varieties, for use in further research and for breeding other
varieties. However, UPOV Convention 1991 has removed the exemptions
which were available under UPOV Convention 1978. Breeders and
researchers will have to pay royalty to the plant breeder right
holder to use the protected variety for breeding new varieties.
UPOV Convention 1991 in Article 15 lays down limitation on farmers'
exemption as available under UPOV Convention 1978. It is laid
down in this Article that "each contracting party may within
reasonable limits and subject to the safeguard of the legitimate
interests of the breeder restrict the breeders right in relation
to any variety in order to permit farmers to use for-propagating
purposes on their own holdings the product of the harvest which
they have obtained by planting, on their holdings, the protected
variety." This would mean that the freedom of farmers would get
restricted to protect the interests of the the breeders. Thus,
the model of 1991 would clearly restrict the farmers right which
they are presently enjoying in the developing countries. Insofar
as the draft Treaty Supplementing the Paris Convention is concerned,
the system provides for "patents" which will take away all the
rights being enjoyed by the farmers at present. As and when this
treaty is enforced, India will not escape its inimical impact.
PART IX
STRATEGIES FOR THIRD WORLD INCLUDING INDIA
(a) It has been observed that the TRIPS Agreement is broadly
based on the basic framework on intellectual property jointly
submitted to GATT in June 1988 by Intellectual Property Committee
of U.S.A., Keidanren of Japan and UNICE of Europe. These
organisations represent the powerful business interests of MNCs
in three continents. The TRIPs Agreement is now nothing short of
a charter of rights for the patent holders and in such a regime
all the developing countries would face severe implications of
degrowth. In view of this, it is important that developing countries
must work out a common strategy for non-implementation of the
TRIPs Agreement on patents in the present form; thus forcing re
negotiation.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
27
(b) GATT Negotiations revealed some of the major limitations in
the negotiating strategy adopted by the developing countries.
Till the midterm review they unitedly tried to block the inclusion
of intellectual property rights on the agenda of the Uruguay
Round. Then suddenly by April 1989 under pressure from U.S.A.,
the developing countries agreed to the inclusion of intellectual
property rights on the GATT agenda and also started agreeing to
the changing of their patent system because they ,were also
threatened action by U.S.A, under Special 301. Thereafter, during
the negotiations no collective efforts were made by the developing
countries to safeguard their interests. One plausible reason was
lack of preparedness to face a situation
as was presented to
them
in the negotiations. Even now it is important that the
forum is established at governmental level by the developing
countries for study of TRIPs in all its perspective so that
during the implementation process national interest could be
safeguarded.
(c) Developing countries should evolve an alternative patent
system. TRIPS Agreement should therefore be taken up in WTO for
reconsideration, based on its impact both on industry and consumers,
with a definite framework suited to their national needs and
priorities.
In the meantime, while the developing countries are amending
their national laws, they should keep in view China's Patent Act
of 1992. China has also been forced to change its patent law
based on the Memorandum of Understanding signed between U.S.A.
and China. Even then China has made most progressive provisions
in regard to the obligations imposed on the patent holder through
compulsory licensing. The relevant chapter of their Patent Laws
is reproduced below:
Chapter VI
COMPULSORY LICENCE FOR EXPLOITATION OF THE PATENT.
Art. 51. Where any entity which is qualified to exploit the invention or
utility model has made requests for authorization from the patentee of an
invention or utility model to exploit its or his patent on reasonable
terms and such efforts have not been successful within a reasonable
period of time, the patent office may, upon the application of that
entity, grant a compulsory licence to exploit the patent for invention or
utility model.
•
Art.52. Where national emergency or any extraordinary state of affairs
occurs or where the public interest so requires, the patent office may
grant a compulsory licence to exploit the patent for invention or utility
model.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
28
Where the invention or utility model for which patent right was
granted is technically more advanced than another invention or utility
model for which patent right has been granted earlier and the exploitation
of the later invention or utility model depends,on the exploitation of
the earlier invention or utility model, the patent office may, upon the
reguest of the later patentee, grant a compulsory licence to exploit the
earlier invention or utility model.
Art.53.
Where, according to the preceding paragraph, a compulsory licence is
granted, the patent office may, upon the request of the earlier patentee,
also grant a compulsory licence to exploit the later invention or utility
model.
Art.54. The entity or individual requesting, in accordance with the
provisions of this Law a compulsory licence for exploitation shall furnish
proof that it or he has not been able to conclude with the patentee a
licence contract for exploitation on reasonable terms.
Art. 55. The decision made by the patent office granting a compulsory
licence for exploitation shall be registered and announced.
Art.56. Any entity or individual that is granted a compulsory licence for
exploitation shall not have an exclusive right to exploit and shall not
have the right to authorize exploitation by any others.
57. Any entity or individual that is granted a compulsory licence
for exploitation shall pay to the patentee a reasonable exploitation fee,
the amount of which shall be fixed by both parties in consultations.
Where the parties fail to reach an agreement, the patent office shall
adjudicate.
Art.
Art.58. Where the patentee is not satisfied with the decision of the
patent office granting a compulsory licence for exploitation or with the
adjudication regarding the exploitation fee payable for exploitation, he
or it may, within three months from the receipt of the notification,
institute legal proceedings in the people's court.
(d) While making provision in the amendments to be carried out
for granting exclusive marketing rights, it would be prudent to
provide that exclusive marketing rights under Art. 70(9) would be
available only if exclusive marketing rights or product patent is
available to the applicant in the country of origin of the
invention. Further that the product has to be produced in the
country that grants the right and also that there would be
provision for compulsory licensing on the lines of Chinese Patent
Laws of 1992 with reasonable royalty. This action will not be
against any of the provisions of the TRIPs Agreement insofar as
the grant of exclusive marketing rights are concerned.
(e) There should be price control on the pharmaceutical products
enjoying exclusive marketing right during transitional period
and product patent protection thereafter.
NEW PATENT REGIME : IMPLICATIONS FOR DOMESTIC INDUSTRY, R&D AND CONSUMERS
29
(f) The exclusive marketing and product patent rights on
pharmaceutical and agro-chemical products should be restricted
to only the basic material in bulk form and not extended to
formulations in dosage form, usage form and combinations as in
the latter case no novelty angle as such is justified. For
formulations as no novelty angle can be justified exclusive right
under the trade marks system should only be granted. In this way,
the double advantage of exclusivity of both under the patent and
trade marks system could be avoided.
The trade mark system, in fact, prohibits the registration of
names of chemical elements or internation non-propreitary names
and as such the patent rights could be restricted to only such
basic materials. The patent holders, apart from using these basic
materials themselves, will have to sell them to the non-associated
formulators to comply with the provisions of Art. 40 of the TRIPs
Agreement relating to the control of ant-competitive practices.
This restriction will help in ensuring competitive environment
in the availibility of the formulations and in containing their
prices.
(g) Article 7 of the TRIPs Agreement provides that protection and
enforcement of IPRs should contribute to the promotion of
technological innovation and to the transfer and dissemination
of technology. Article 16 of Convention on Bio-diversity also
deals with IPR issues, access to transfer of technology and
environment and sustainable development. These issues have been
raised at WTO Committee on Trade & Environment in June 1995. They
should be pursued vigorously by the developing countries and it
should be ensured that transfer of technology does take place
along with the grant of exclusive marketing or product patent
rights. The patent holder could be suitably compensated through
payment of royalty.
(h) US must be forced by WTO to withdraw provisions such as Super
3Q1 and Special 301 which are anti-GATT provisions. Such bilateral
provisions have no place in the multilteral trading system. This
argument should be used emphatically to force renegotiation of
TRIPs Agreement on Patents.
30
November 1995
INTERNATIONAL PRICES VIS-A-VIS INDIAN PRICES
HAJOR DRUGS INTRODUCED IN INDIA DURING THE LAST FIVE TEARS
: DRUG k DOSAGE
PACE
! EXPIRY
BRAND/
INDIA
! BRAND/
PAII STAN
TIMES | BRAND/
PRICE IN
USA
TIMES ! BRAND/
PRICE IB
Ul
TIMES ;
COMPANY
(Re)
1 COMPANY
(Re)
COSTLIER j COMPANY
US $
(Re)
COSTLIER | COHPANT
Ul(pnds)
(Rs)
COSTLIER |
1
] Anti-bacterlals:
t
1
1
1
; Ofloxacin 200»g
4 0
! 1989
t
1
Tariaid/
92.00 | Tarlvld/
Hoechst
; Hoechst
117.23
1.27 | Floxin/
11.66
408.10
4.44 ; Tarlvld/
i Ortho
4.10
217.30
1
1
1
1
1
2.36 ;
1
1
( Hoechst
1
! Cefadroxil 500 ig
4'8
I 1987
Cefadur/
51.75 1 Duricef/
Protec
| BUS
82.68
1.60 ! Duricef/
13.17
460.95
8.91 | Baxan/
! M Johnson
1.13
59.89
1.16;
l
1
i BMS
1
1
Ciprofloxacin 500 ig
4'8
! 1992
Ciprolet/
28.40 ( Ciproxin/
Stangen
! Bayer
234.63
8.26 | Cipro/
12.52
438.20
15.43 ) Ciproxin/
( Miles
5.50
291.50
10.26 ;
1 Bay Pharsai
1
«
1
Norfloxacin 400 ig
10'8
! Loeefloxacin 400 ig
Tanflox/
39.00 J Noroxin/
TDPL
!1998
<
5'8
Lonaday/
99.00 !
N.A.
(
3.22 ! Noroxin/
25.82
903.70
23.17 } Utinor/
; MSD
-
1
1
•
Stangen
1
125.50
; MSD
1
! Maxaquin/
6.52 i
4.80
254.40
) MSD
30.53
1068.55
1
10.79 •
1 Searle
N.A.
-
-
f
I
f
! Pefloxacin 400 tg
4'«
(
Tobramycin 0.31
5 il
<1989
Proflox/
15.60 ; Abaktal/
Pro tec
! Lek
Tobacln/
20.84 | Tobralex/
Aristo,
(3 il)! Alcon
! Anti inflamnatory:
! Diclofenac-50 tabs
10'8
: 1988
Jonac/
G.Renodiee
4.95 ( Voltaren/
3.81 ;
N.A.
-
-
116.31
5.58 1 Tobrex/
! Ciba
Mown/
IPCA
14.00 ! Feldene/
! Pfizer
n.a..
18.13
634.55
30.45 ) Tobralex/
! Alcon
1 Alcon
1
(
1
11.27 ) Voltaren/
-
-
-
1.39
73.67
3.54
1.82
96.46
19.49
2.14
113.42
8.10
1
9.57
334.95
67.67 | Voltarol/
) Ciba
I Ciba
4
1
10'8
:
1
1
55.80
-
1
1
1
(
t
j 1988
<
! Piroxicam-20 caps
59.42
78.12
5.58 ! Feldene/
) Pfizer
25.72
900.20
64.30 | Feldene/
! Pfizer
31
I DRUG k D0S4GE
•PACK
! EXPIRY
BRAND/
INDIA
; BRAND/
PAKISTAN
TIMES | BRAND/
PRICE IN
USA
TIMES ) BRAND/
PRICE IN
UI
TIMES |
COMPANY
(Rs)
; Company
(Rs)
COSTLIER ( COMPANY
US 3
(Re)
COSTLIER ) COMPANY
Ul(pnds)
(Rs)
COSTLIER !
1
! Anti-ulcerants:
1
; Ranitidine-300 tabs
10'8
10'8
i 2000
; Oteprazole 20ig
10'8
Ranitin/
! Glaxo
Fudone/
18.61 ) Pepcidlne/
Wockhardt
! MSD
Lonac/
! Cardiovasculare:
10's
Tenolol/
IPCA
10'8
Dilzen/
Torrent
J1988
30.02
1050.70
I Glaxo
1
260.40
13.99 ( Pepcid/
1
; Prilosec/
-
28.69
1004.15
9.14
484.42
53.96 ) Pepcid/
4
9.50
503.50
27.06 ;
36.30
1270.50
43.81 1 Losse/
12.66
670.98
23.14 1
] Astra
1
»
1
11.00 ! Tenoriin/
86.63
; 1C1
9.02
315.70
( 1C1
36.90 | Rerbeser/
74.40
! Tanabe
4
1
4
4
4
7.88 | Tenornln/
2.02 | Cardlzen/
26.14 :
; msd
1 Merck
4
56.70 ] Zantac/
) Glaxo
; MSD
N.A.
29.00 1
14.05 | Zantac/
260.40
1
11987
i Diltiazen 60 ng
18.53 ( Zantac/
Torrent
Cipla
1
1 Atenolol-50 tabs
1
t
• 1995
1 Fa»otidine-40 tabs
4
4
4
1
4
I
28.70 1 Tenornln/
1.91
101.23
4
I 1CI
6.83
239.05
! HMD
6.48 I Britlazen/
9.20 ;
1
1.50
79.50
2.15;
3.42
181.26
5.18 ;
Thanes
1
; Lisinopril 5 sg
10'8
Cipla
t
! Enalapril Maleate 5ng
10'8
10'8
Prazopress
Sun Pbana
t
I Aiiodarone 200ng
Vasopril/
Protec
t
; Prazosin 2ng
Clpril/
10*8
Cordarone
Torrent
<
35.00 !
N.A.
! Prinivil/
-
1
15.91 ( Renitec/
37.20
! MSD
264.60
13.64
! Pfizer
2.34 | Vasotec/
4
20.04 ) Innovace/
9.11
318.85
N.A.'
0.57 ( Minipress
] Cordarone
-
1
1
2.81
148.93
! MSD
6.65
232.75'
( Pfizer
4
7.56 I Zestril/
! 1CI
( MSD
24.04 I Minipress
77.90 !
7.56
1 Merck
9.68 ! Hypovase/
1
1
0.83
43.99
! Invicts
29.03
1016.05
| Wyeth
13.04 I Cordarone
9.36 1
1.83 |
4
2.93
155.29
1.99 ‘
4
1
1 Sanofi
t
; Ailodipine Besylate 5ng
1■
10'8
Ailoz/
Plethico
15.00 ;
1
N.A.
-
.
1 Norvasc
! Pfizer
11.79
412.65
27.51 ! Istin
! Pfizer
4.23
224.19
14.95 ;
1
32
; DEUG I DOSAGE
paci
' EXPIRY
BRAND/
INDIA
! BRAHD/
PAKISTAN
TIMES ) BRAND/
!’RICE IN
USA
TIMES ) BRAND/
PRICE IN
UI
TIMES
COMPANY
(Re)
I COMPAHY
(Re)
COSTLIER ) COMPANY
US $
(Re)
COSTLIER ) COMPANY
UE(pnds)
(Rs)
COSTLIER
Funaiole/
.57.90 | Hiioral/
3.83 ) Nizoral/
30.94
1082.90
! Nizoral/
5.23
277 19
4.79
IhandeIwal
I Janaeen
12.50
662.50
2.65
2.69
142.57
11.88
1.64
86.92
3.78
2.91
154.23
10.28
2.52
133.56
1.92
0.88
46.64
3.59
2.06
109.18
4.69
3.12
165.36
16.87
I Anti »lral/fungal
; letaconaxole-200 tabs
10'8
• 1996
I lidorodine 1001g caps
10'8
Zldovlr
; Anti-histaaine
10'8
Alestol/
1ndoco
10'8
Terdane/
lotas
1
; Ceterlzlne 101g
: Janssen
II.A.
-
-
) Retrovir/
15.48
541.80
2.17
B Wellcone
10'8
Hlsnof 11/
120.90
12.00 ) Mayasen/
10.08 ) Hlsianal/
) Janesen
23.00 ) Teldane/
■
60.93
2.65 ) Seldane/
1 HMD
15.00 ;
18.50
647.50
53.96
) Janssen
12.26
429.10
18.66 : Triludan/
; MMD
N.A.
-
-
:
n.a.
10'8
Loriast/
] Hlsnanal/
) Janesen
I MMD
-
t Zirtek
-
Croslands
! Lcratldine 10 ig
1 Retrovir
! B Wellcon
1
i 1997
1 Terfenadine 60ag
18.70
) Janssen
Ci pla
1
1 Astenizole lOng
250.00 '
221.96
[ UCB
69.50 '
N.A.
-
-
Cadlla
) Claritln/
24.51
857.85
12.34
Schering
1 Clarityn/
) Schering
1 Ant1-Aoi1o1jtice
( Alprazolan 0.5 eg
10'8
; Trazodone HC1 5(J ig
10'8
■ 1985
1 Ecepirone 5ig
I 1999
Alpraz/
12.99 '
N.A.
-
Torrent
; 1990
10'8
23.30 ) Deprel/
Sun pbarna
) Adaijee
Intae
) Xanax/
7.05
246.75
19.00
; Upjohn
Trazalon/
Buspine/
-
9.80 | Buspar/ ■
1 BHS
17.77
0.76 ! Desyrel/
; lanax/
[ Upjohn
12.31
430.85
18.49
1 Mollpaiin/
I N Johnson
89.69
9.15 ) Buspar/
1 M Johnson
Roussel
5.78
202.30
20.64 |
Buspar/
I BHS
33
; DRUG A DOSAGE
PACK
; EXPIRY
BRAND/
INDIA
;
BRAND/
PAKISTAN
TIMES I BRAND/
PRICK IN
USA
TIMES | BRAND/
PRICE IN
UI
times ;
COMPANY
(Ro)
1 COMPANY
(Rs)
COSTLIER | COMPANY
US $
(Ro)
COSTLIER | COMPANY
Ul(pndo)
(Ro)
COSTLIER (
-
<
1
; Anti-cancer
•
1
1
I Mjtoxantrone 2ag/al
10a!
37.70 i
595.00 ;
Oncotrone/
N.A.
; Novatrone
-
TIPI
i H
640.82.22428.70
Novatrone/
1 Lederle
150.43
7972.79
13.40 ;
65.83
3488.99
3.51
14.18
751.54
14.15
749.95
3.85 ;
14.58
772.74
3.68 ;
4
Lederle
1
; Carboplatin 150ag
Vial
Oncocarbin
995.00 ;
l
f
! Vincristine lag
; 1992
! Vinblastine 10 ag
Vial
Cytocrlstn
Vial
Cytoblastn
210.00 •
Eposed/
; Cisplatin 10 ag
Vial
1
333.85
1.71 ! Velban/
-
34.62
1211.70
_
1
Paraplatin
1
BMS
20.20 | Oncovin/
N.A.
! Vepesid/
-
38.92
1362.20
6.99 ; Velbe/
Lily
136.49
4777.15
22.75 ‘ Vepesid/
! B Myers
Aquaplat/
151.35 ! Plataaine/
Ihandelval
! Carlo Erba
174.70
1.15 '
N.A.
12.53 i
,
Lily
1 Lily
1
; Miscellaneous
-
! Lily
1 Lily
, Mateo
1
5.39 | Oncovin/
1 Lily
195.00 ’
1 Velbe/
Clpla
I Etoposide lOOag inj
323.16
n.a.
;
-
-
60.00 ' Oncovin/
Clpla
Vial
N.A.
I
1
TDPL
B Myers
-
N.A.
-
V
-
- .
1
«
1
1
1
1
! Niaodipine 30ag tabs
10's
Vasotop/
59.09 !
N.A.
1
! Niaotop/
.
! Selegiline HC1 5 ag
10'8
Selerin/
24.00 1 Juaex/
i
! Ondansetron MCI 4 ag
6'8
Oncoden/
8ote:
1752.80
3.08 ! Eldepryl/
21.37
747.95
1 Soaerset
206.17
3i.i6 ; Eldepryl/
3.49 ;
.
4.68
248.04
Britannia
1
-
. ; Zofran/
64.20
2247.00
1 Cerenex
2.
Conversion rate of exchange considered : 1 USD - Rs.35.00, 1 GBP - Rs.53.00 4 1 PAI RS = Rs.1.07
3
Source for prices : USA prices - Red Book 1995
- UI MIMS Septenber 1995
Pakistan
India
56.83 ' Zofran/
Glaxo
Price paid by the patient considered.
24/11/1995
3.89
Bayer
1.
UI prices
29.66 ( Niaotop/
1
10.34 ;
1
N.A.
39.54
Torrent
1
74.00
I Mediapex
Protec
1
50.08
1 Miles
Protec
1
-
QIMP Annueal 1991-92
October 1995
24.30
1287.90
32.57 '
1
34
IMPACT
OF
STRONG
PATENT
SYSTEM
QUOTATIONS
Without adequate explanation, one can only conclude that what is going on in this industry
is greed on a massive scale. This is an industry that insists on increasing its profits at the
expense of the sick, the poor and the elderly.
U.S. Congressman Henry Waxman
The pharmaceutical industry is unique in that it can make exploitation appear a noble
purpose.
Dr. Dale Console, former Medical Director of Squibb
In this industry the mere existence of patent protection is not a guarantee of invention, nor
is its absence much of a barrier.
Kefauver Report
Most new drugs introduced into the U.S. market in this decade have been assessed by the
Food and Drug Administration (FDA) as essentially duplicating already available products.
U.S. Congress. Senate, Special Committee on Aging, 1990
Our elderly, in particular, must frequently choose between going hungry at the end of the
month or refilling an essential but costly prescription.
U. S. Congress. Senate, Special Committee on Aging, 1989
With’many of these products, it is clear while they are on the drawing board that they
promise no utility. They promiise sales. It is not a question of pursuing them because
something may come of it
it is pursued simply because there is profit in it.
Dr Dale A Console before US Congress, Senate,
Committee on the Judiciary, 1960
35
The Indian drug price index, calculated on the basis of prices in eight age-old static
drugs, rose by 41.9 percent between 1961 to 1970. Further more, the brand name
drugs manufactured by foreign controlled companies in India were priced 150-300
percent above the formulation prices of Indian public sector companies.
UNCTAD, 'Case Studies in the transfer of technology
in the pharmaceutical industry in India, 1977
The Patents Act, 1970, was passed on the basis of the findings of the judicial enquiry
conducted by Mr Justice Rajagopala Iyengar, former Justice of the Supreme Court of
India. Justice Iyengar concluded that 90 percent of patents were taken out by foreigners
who evinced no interest in working them in India. The enquiry revealed that foreign
owned patents are never worked in India but are held either to block the industry in the
country and protect export markets.
Report of the Ayyangar Committee, 1959
Overpricing of drugs imported into India has ranged from 24 percent in the case of
Metronidazole to 1100 percent in the case of Indomethacin.
Dr Satwinder Singh in his book, Multinational Corporations and Indian Drug Industry
Companies with an innovative drug often enjoy years without price competition, during
which "they can price anyway they want".
Stephen Schondilmeyer, University of Minnesota
US drug price are the highest in the world because patents prevent competition. The US
stands naturally alone in allowing drug manufacturers to charge high prices.
The literature of Northern Medication Service, Nassan, Bahamas
We have given the pharmaceutical industry a licence to price gouge the American
public and it is time to revoke that licence.
Senator Pryor
36
Many of these (prescription) drugs were not even invented in this country, but are licensed
on a monopolistic basis to American companies which tested the drugs for FDA approval
and marketed them.
U.S. Congress, House, Subcommittee on Health and the Environment, Testimony of
William Hutton, National Council of Senior Citizens, July 15,1985
The amount of basic research done by the U.S. drug firms is so small as to be negligible.
Practically all drug industry research can be considered product development. Basic
research in this country is conducted or financed largely by the United Stated Government
and universities."
U.S. Congress, Senate, Committee on the Judiciary, April 30, 1981
Statement of Public Citizen Health Research Group
the R & D budget is the hiding place for promotion disguised as research and clinical
studies that are designed to produce noise instead of new products. Inflated R & D
budgets are then used to justify inflated prices. If it is preapproval publicity, publicity for
a product prior to the time it gets on the market, or a claim prior to the time it is
approved, then medical education will almost be budgeted somewhere in phase 3 research
.... So all the communications associated with that product can easily be cross-charged
into the R and D budget, so those figures in the kinds of reports that PMA issues to be
expenditures for actual research when they are not - they are promotional - related
expenditures using medical education.
David Jones, former executive director, Ciba Geigy
Before the U.S. Congress, Senate, Committee on Labour and Human Resources,
December 11, 1990
They stress that there are many failures for each successful drug. This is true since it is
the very essence of research. The problem arises out of the fact that they market so many
of their failures."
Dr. Dale Console, former Medical Director, Squibb
37
arf6 K.e{auver hearings in the US has concluded that patenting, branding and
ve sing of the products had resulted in an absence of effective competition and had
been against the public interest."
Scrip No. 1707
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Years ago, the big profits in the U.S. were made in oil. These days they come from
pharmaceuticals.
An Buchwald,Washington Post
My idea of a better ordered world is one in which medical discoveries would be free
of patents and there would be no profiteering from life or death.
Mrs Gandhi, WHO Conference, Geneva, May 1981
An unprecedented corporate power grab is underway within the Uruguay Round
Negotiations of a new version of the GATT, the treaty which governs most of the
world’s trade. By clever manipulation of free trade symbols and dependency between
nations, multinational corporations hope to harmonise downwards : consumer
protection, environmental and worker safety standards and wage levels. Special
burdens are in store for Third Word countries whose sovereignity the multinational
companies are hoping to further erode.
Ralph Nader, USA's foremost Consumer Rights Activist
Nothing can be more absurd or outrageous than that a foreign patentee can come here
and get a patent and use it, not for the purpose of encouraging industries of this
country but to prevent our people doing otherwise what they would do. To allow our
laws to be used to give preference to foreign enterprise is to my mind ridiculous."
Sir Roben Reid, Eminent Jurist and Member, House of Lords, U.K.
38
This is only the first step in the attempt by foreign owned multinational drug firm to
end drug price competition. Their mandate is to get the best return for their
shareholders and they will be able to do that even more with their longer monopolies.
President Jack Kay, Canadian Drug Manufacturers Association
Brazil has never promised the United States that it would base its trade mark and
patent legislation on parameters that the US government considers appropriate.
Celso Amorin, Secretary General, Foreign Relations Ministry, Brazil
American companies regularly infringe British patents knowing that the only redress
for Britons is a lengthy and expensive haul through courts in the United States.
British Technology Group
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AIMS AND OBJECTIVES OF THE
NATIONAL WORKING ON PATENT LAWS
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■ ■ To • discuss issues relevant and related to the Patent Laws and Paris
■ .Convention;
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To Discusss issues of national interest arising out ot'the Uruguay Round
of GATT Negotiations;
To discuss other economic issues raised at various multi-lateral fora haying
a bearing on the national economy;
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■ To arrange for research and publication of papers relating to these issues;
W-B To help create a better understanding of these issues by organising
meetings, seminars and debates;
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To press for open’discussion/debate in Parliament and other fora Sb that
-there'is transparency on major economic issues being taken up in multi
lateral negotiations;
■To represent to the Government and those concerned with the formulation
’of policy on agreed views of the Group;
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Publicise and organise publicity in respect of India's and international
patent and other economic laws,and policies;
To forge a National Alliance of various Organisations/Forum/
Associations, etc. to work towards arid-campaign for patent and other
economic laws and policies best suited for India's interests.
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