Patent System In Pharmaceuticals: Challenges To Affordable Healthcare

Right to healthcare has been recognized as a fundamental human right that is necessary for the exercise of other human rights, ensuring that every human being is entitled to the enjoyment of the highest attainable standards of health conducive to living a life of dignity. Right to affordable healthcare covers adequate availability of quality healthcare which is accessible to the individual as well as communities at all times with the payment of a nominal fee.

• The issue of access to affordable medicines is also one of the fundamental components necessary for the full realization of the right to health. Medical care in the event of a sickness and the prevention, and treatment and control of diseases, depends mainly on timely and appropriate access to quality medicines. Patents form one of the main hindrances in access to affordable medical services.

Patent

• A patent is an Intellectual Property (IP) right that enables the patent holder to exclude competing suppliers during the term of the patent. A patent can be sold, licensed or transferred. When the term of patent expires, the patent holder publicly discloses their invention, facilitating the free use of patented information. Patent laws are enacted to encourage investors to make investments in research and discover, develop, and deliver a new drug to the market. The period of patent protection is 20 years.

IP Rights in Pharmaceuticals

• The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of WTO came into force on 1^st January 1995. It enables the WTO Member countries to amend their domestic laws and practices to protect patent rights on pharmaceuticals.
• Any disputes between WTO Members about a Member’s compliance with its obligations under TRIPS agreement are considered by a panel of experts who are appointed to hear each complaint. The Agreement provides for the imposition of trade sanctions by a Member on behalf of the patent holder in cases where another Member has failed to comply with the agreement.

Compulsory Licensing

• Compulsory licenses can be issued by Member countries to adjust their patent laws in order to achieve public health objectives. National laws can be passed to authorize the judiciary, the executive, or any other body to issue a compulsory licence to manufacture or import a patented drug without the permission of the patent holder in cases of emergency to achieve the policy of providing universal access to medicines, diagnostics, vaccines etc.
• Before 2017, compulsory licensing could be provided for supplying affordable medicines to predominantly the domestic market. In 2017, an amendment was made which allowed for a special form of compulsory license, known as 'trade related' compulsory licence, which was to be used for the export of affordable medicines to countries in need.

How the Existing Patent System Prevents Access To Affordable Healthcare?

Though the patents system exists to protect new innovations in medicine formulations, drug delivery mechanisms, vaccines, medical equipment etc. but the following limitations in the existing system prevent access to affordable healthcare-

• Repackaging Existing Inventions: Drug companies often attempt to patent features of drugs without any true innovation. Pharmaceutical companies extend the patent rights by obtaining minor reformulations without necessarily increasing the therapeutic efficacy.
• Developing countries are characterized by low investments in the healthcare, and repackaging of patents continue to hinder the access to affordable healthcare system to millions of people in these countries.
• Raising the Costs of Medicine: Patents of medicines and vaccines by the developed countries increases the costs of medicines. The existing patent system has resulted in an innovation system which is characterized by a dramatic increase in healthcare costs with decreasing levels of innovation. The costs of developing a new medicine from discovery through clinical trials appear to double every decade. Pharmaceutical companies have spent more funds on marketing rather than research and development.
• Patents as Business Strategy: Pharmaceutical companies have transformed the patent system in to a business strategy to avoid competition and earn profits for many years. It violates the rights of the people across the world to get access to affordable healthcare and medicines. Evergreening of patents results in excluding the competition from the market.
• Product Hopping: Pharmaceutical companies often employ a practice known as “product hopping.” It is a process by which a brand uses its current dominant market position to switch the doctors, pharmacists, and consumers to a newer version of the same drug whose patent will be expiring at a later date. In simple words, brand forces a “hop” from one product to another.
• Patent Thickets: Pharmaceutical manufacturers develop “patent thickets” to protect their products. It refers to a situation where multiple parties have overlapping patent rights on one product. Multiplicity of owners increases transaction costs and creates coordination challenges for the manufacturer.
• Sometimes an incumbent manufacturer amasses a large number of patents relating to a single product, with the intent of intimidating competitors from entering the market.
• No Patent Waiver to Technology: Often it is the case that pharmaceutical companies grant patent waivers for the medicines and vaccines, but the related patents in the technology are not granted. Raw materials and technologies are very expensive to buy, which hinder the development of new medicine formulations.
• Development of new drugs is expensive and patents are essential for providing rewards for investments to the pharmaceutical companies. But the cycle of innovation, reward, competition has been converted into a system of innovation, reward, and infinite profits.