Intellectual property protection in India and implications for health innovation: emerging perspectives

Introduction: The intellectual property (IP) regimes in the majority of the World Trade Organization's member nations have evolved since the passage of Trade-Related Aspects of Intellectual Property Rights (TRIPS). The goal of the TRIPS agreement was to bring all World Trade Organization members' IP protections into line so that all inventions in different industries would have at least a minimal amount of protection. While some have praised India's version of the TRIPS-compatible intellectual property regime as a "model" for developing nations, others remain skeptical about its ability to stimulate medical innovation and improve access to healthcare. This study reviews the literature to offer an overview of the function that intellectual property protection plays in the advancement of medical breakthroughs. In general, the pertinent research in the Indian context has been divided into two streams: some investigate how the new intellectual property law may affect healthcare access, while others examine how IP may affect medical discoveries. Remarkably, there is no convergence of the two threads. Furthermore, because it is anticipated that the IP owner will monopolize these inventions, many studies see IP-driven advancements as an access barrier. We contend that there is justification for considering innovation and access to healthcare as complementary processes. This is especially the case when one interprets "health innovation" more broadly to include the following: 1) novel drug products; 2) innovative pharmaceutical industry processes; 3) novel drug delivery systems, bio-enhancers that increase bioavailability/efficacy and dosage forms; 4) novel medical equipment and device products; 5) novel approaches to the provision of health services; and 6) novel policy approaches to improve access to healthcare.

Since businesses and governments strategically innovate for a variety of reasons, it is not always possible to trace all of the aforementioned developments to the shift in the IP system. Nonetheless, as these could be, at least in part, a reaction to the modifications in the IP regime, we concentrate on two categories of “innovative responses” in this analysis that could impact healthcare access and innovation:

1.      Research and development (R&D), technology licensing and collaboration, patents, and other innovations at the firm level are all affected by IP. Studies that capture these consequences are reviewed. Furthermore, changes in innovation inputs and outputs are considered.

2.      Institutional and policy changes in the healthcare industry to improve patient access. All policy experiments in this area are considered "innovative" for the sake of this article, even though they might not be considered "novel" on a worldwide scale.

Pharmaceutical industry in India

Due to the high cost of most medications, the Indian pharmaceutical industry was dependent on imports until 1972. The establishment of a robust pharmaceutical industry in India was made possible by political and policy events during the early 1970s, including the Drug Price Control Order (DPCO), in 1970, and the new patent acts of 1972. DPCO placed several medications under price control, and the Patent Act of 1972 prohibited product patents in the pharmaceutical industry. Prioritizing the pharmaceutical industry in the public sector and enacting laws restricting the power of multinational corporations enhanced the favorable policy climate for the expansion of indigenous businesses and made India a significant global supplier of pharmaceuticals. Before the TRIPS Agreement, the lack of product patents permitted the low-cost local manufacture of patented medications, while process patents incentivized generic manufacturers to lower their drug production costs. Indian pharmaceutical companies' strategic options have changed as a result of the country's compliance with the TRIPS framework, which became fully operational in 2005 and permits product patents.

Health care in India

India's health policy has always been based on the principle of equity. It has recently been expanded to include the topic of universal healthcare or the supply of reasonably priced medical treatment to all of a nation's residents. Despite the emphasis on quality, equity, and accessibility, India has a high rate of morbidity and mortality and needs creative solutions to lower these rates. With the establishment of a network of public hospitals and basic health centers, the Indian government directly entered the healthcare industry after independence. However, the effectiveness of the healthcare system was beset by many flaws. A primary disadvantage has been the low level of spending in the industry. The National Health Policy of 2002 instructed the government to commit to providing universal health care by taking capacity into account in a "realistic" manner. One of the main obstacles to ensuring that everyone has access to health care is the policy document's inadequate capacity (resources and infrastructure).

Changes in the IP regime and IP policy innovations

As previously noted, there are numerous other confounding factors at play, making it difficult to directly link health-related advancements in recent years to the new TRIPS regime. We therefore do not propose any such connection. This section gives a quick rundown of the new intellectual property regime, emphasizing the innovative policy measures the Indian government has implemented as part of it. The section also lists a few IP policy gaps that have come to light and need to be fixed. As mentioned, Indian companies have focused on process innovation and developing the capacity to create bulk pharmaceuticals in a very cost-effective way as a result of the previous IP regime's protection of processes rather than product ideas. Regarding the effect of the new intellectual property regime on the innovation atmosphere in the Indian pharmaceutical business, opinions differ; some claim that the influence has been negligible or negative, while others say that the impact has been favorable. Others contend that more research is needed because there have been some intriguing corporate responses that demonstrate creativity. Certain protections exist to protect domestic consumers and producers, even if the protection of product patents under the TRIPS-compliant IP framework limits the options available to domestic enterprises for reverse engineering and may result in higher drug prices. These have been implemented as standards of patentability (Clause 3[d]) and requirements for mandatory licensing (Section 84)e. Compulsory licensing enables national governments to permit producers and businesses to duplicate goods and patentable methods.

Three years following the patent's issuance, a license may be granted in the following circumstances: "the patented invention is not worked in India," "the patented invention is not available to the public at a reasonable price," or "the reasonable requirements of the public concerning the patented invention have not been satisfied." However, as stated in Clause 3(d), a discovery of a variation of an already-known material or method that does not materially improve efficacy is not patentable. The clause makes an effort to dissuade pointless inventions. The two goals of guaranteeing "access to medicines" and encouraging innovation are attempted to be balanced by these provisions.

Policy innovation to avoid ever-greening

Novartis applied for a patent in 2006 to the Indian Patent Office about their Glivec formulation. Since the Indian Patent Office saw the action as an attempt at "evergreening," the application was denied. The technique used by patented goods creators to prolong the monopoly benefits granted by a patent is known as "evergreening." Although the practice is not legally recognized, it makes use of several tactics to take advantage of both technical and legal flaws in patent law. The monthly cost of Glivec, also known as imatinib mesylate, is $1,800. It is a formulation used to treat chronic myeloid leukemia and blood cancer. On the other hand, India sells the drug's generic version for about US$120 for the same duration of use.

TRIPS required that countries, not providing product patents in respect of pharmaceuticals and chemical inventions, put a mechanism in place for accepting product patent applications with effect from January 1, 1995. Such applications were to be examined for patent grants, after making suitable amendments in the national patent law. This mechanism of accepting product patent applications is called the “mailbox” mechanism. Novartis applied for a patent in the year 1998, and in 2005, was granted exclusive marketing rights and the application was “mail boxed” for consideration. The patent application was rejected under Clause 3(d) of the Indian Patent Act because the formulation was a “modification” of the existing drug and did not enhance efficacy adequately. Post the rejection of the plea in 2006, Novartis challenged the decision in the Supreme Court of India. The court backed the ruling and rejected Novartis’ appeal for a patent in 2013. It has been suggested that since the Indian patent legislation does not define “efficacy”, the differences in interpretation of this term led to the rejection of the appeal. More recently, Gilead’s hepatitis C drug was also denied patents on similar grounds.

Innovations in the Indian pharmaceutical industry

Technology advancements and pharmaceutical companies' strategic reactions—such as adjustments to R&D budgets and organizational innovations are covered in this section. Research indicates that modifications at the organizational level have coincided with shifts in intellectual property laws. The Indian pharmaceutical industry may have suffered as a result of the policy change, according to some writers, while others contend that India can now "exploit" its advantage in reverse engineering and "explore" the field of enhanced R&D in medical innovation.

·         Manufacturing capability and Abbreviated New Drug Application approvals: All the same, the prevailing view is that India gained a competitive edge in producing high-quality generic pharmaceuticals because of the emphasis on process innovation in the pre-TRIPS era. This early prowess in "imitative" skills served as a favorable environment for the development of "innovative" skills when technology and regulations changed. As a result, Indian pharmaceutical companies have received a significant increase in US Food and Drug Administration licenses. India has become a prominent player in the generic medication industry by using this opportunity and implementing improved production techniques. Eight of the 10 "blockbuster drugs" are produced in India. Furthermore, the pre-TRIPS regime's encouragement of process innovation-driven manufacturing capability creation has helped Indian pharmaceutical companies secure a sizable portion of US Abbreviated New Drug Application (ANDA) approvals. The ANDA is an application that seeks approval of a licensed or approved drug for use as a generic in the United States. The Federal Drug Administration (FDA) receives the applications. India has contributed more than 40% in recent years.

·         Trends in patenting activity: Research and development spending has increased during the post-TRIPS era. According to a thorough econometric analysis, there has been a trend toward a stricter IP framework, which has boosted R&D activity in the industry and led to an increase in local companies' patenting both domestically and internationally. While new dosage forms continue to dominate product patents, there has been a shift in pharmaceutical R&D toward novel drug development. In recent years, the Indian Patent Office has seen a sharp growth in the number of patent filings. In the pharmaceutical industry, the leading companies appear to have exhibited notably greater innovative (patenting) activity during the post-TRIPS era. Based on data about PCT applications, it appears that leading Indian pharmaceutical companies increased their innovative activities before the 2005 shift in India's intellectual property laws. These pharmaceutical companies have had a decrease in PCT applications within the following time frame. A global drop in patent applications throughout the crisis era in the late 2000s and beyond has been noted, even though the reasons for this decline are not entirely evident.

·         Entrepreneurial innovation: A wide range of cutting-edge medical technologies and healthcare solutions have been made possible by India's high Internet and mobile phone penetration rates. Since they increasingly offer profitable commercial prospects and also have a social impact by improving access to healthcare, many of these have been introduced through startups. Once they are scalable, many of these inventions have the potential to address a wide range of public health issues, even if they are now outside the purview of TRIPS. Although there is a good deal of entrepreneurship in the healthcare industry, a large number of IP-based biomedical businesses have also been established recently. Regretfully, there isn't a comprehensive database of these kinds of startups. Medical device innovation appears to have a lot of potential. According to estimations currently available, this sector's market size in India is estimated to be around US$2,400 million and is expanding at a rate of 16% per year. In India, imports account for over 75% of the available medical gadgets. In this field, entrepreneurship has focused on low-cost creative solutions; yet, due to a lack of necessary resources (money, infrastructure, and technical know-how), innovations in nondrug-based products continue to get a shockingly low level of investment.

Conclusion

The adoption of an IP system that is compliant with TRIPS has sparked much debate in India, as it has in many other developing countries. The pharmaceutical and food industries have generally received more attention in the argument because they have an impact on two of the most important human needs: access to food and healthcare. Given its prowess in the pharmaceutical sector, India's situation differs from that of many other nations. It is difficult to say with certainty whether or not the new intellectual property law has encouraged creative and innovative activities in the Indian healthcare sector because the data on health-related developments are patchy and fragmented. Pharmaceutical companies in India have demonstrated a greater inclination to patent and innovate, even though their R&D priorities may have slightly moved in favor of Western markets. Even if there is a trend toward more product inventions, the majority of them are new dosage forms and medication delivery systems rather than novel chemical entities. Though it's unclear how much the new IP rule has affected the industry, medical devices are a very active field. To contend with the growing rivalry based on technology, Indian companies appear to need to make strategic moves into other countries to obtain technology and consolidate in the domestic market. Furthermore, Indian businesses have been quite busy in this area.  India will need to be aware of whatever dysfunctions the new patent regime may have caused as it gets more accustomed to it. Small businesses appear to have suffered due to uncertainty about the validity of issued patents (Section 13[4]), even as multinational enterprises have expressed dissatisfaction with the standards of patentability (Article 3[d]) and forced licensing (Article 84). This seems to warrant a critical examination. A variety of company types appear to have similar complaints about onerous patenting processes. Let's face it, the nation is still learning, and the government should be willing to adjust its policies from time to time to strike a balance between encouraging innovation and keeping healthcare costs down.