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The role of Intellectual Property Law and Trade Policies in Innovation and the access to medicines and medical technologies compete against each other in the Corona impacted world.
COVID-19 has shaken the world and medical technological breakthroughs with new vaccines or drugs would be the only way to save mankind. A global health crisis always triggers concerns over patented medicines and treatments that may impede access to affordable healthcare. A global pandemic or a health crisis stimulates the need for better access to medicines, creating a gray area between the protection of ideas, investments, and access to medicines for the larger good of public health.
The Emerging Issue
Intellectual Property Rights awards exclusivity to the inventor or the owner to manufacture and sell their invention.
Almost a decade ago when HIV/AIDS had become a global crisis, concerns of better access to medicines were raised. Developing nations had concerns with regard to the implementation of strong Intellectual Property regimes as it would have a negative effect on the efforts to improve public health, thereby making it difficult for governments to have policies for affordable healthcare.
The major problem in developing nations is that the prime population pays for their own drugs and state provisions are selective and constrained. Though the concept of state health insurance schemes is blooming, its effectiveness, to date, is questionable.
A similar situation exists in the current scenario for COVID-19 where not only are the beds in each hospital limited, but extravagant costs have to be borne by patients.
In Tamil Nadu, India, private hospitals are charging a whopping amount of Rs 30,000 per day, even though government orders state otherwise, capping the charges at Rs 7500 for mildly asymptomatic patients and in case they have been admitted to Intensive Care Unit then the charges are capped at maximum Rs. 15,000 per day. Claims of unfair charges are popping up every day where hospitals are being accused of merely robbing patients.
Not only that, exploitative pricing has become a common predicament in most Asian Countries where hospitals are overcharging in COVID-19 rapid tests. The rapid test packages offered by hospitals have been differing from 500,000 rupiah to 5.7 million rupiah ($32 to $365). Exorbitant pricing remains an issue in the United States as well, where an individual faced a $1.1 million hospital bill.
Access to proper healthcare has already started becoming a concern with hospitals turning the major crisis into a money minting machine, even when there is no absolute drug or vaccine for the disease. The concern is, if every entity starts to look at this crisis as an opportunity, sustaining public policy will be a distant task for the government.
The Exclusivity of a Patent
The key objective of the patent system is to reward exclusively to the innovator for an invention that is novel and has some industrially enhanced efficacy to it. The patented innovation could be a product or a process, as engraved in the TRIPs (Trade-Related Aspects of Intellectual Property Right) Agreement, 1995. The patentee creates a solution to a problem and as an incentive, an exclusive right is given to the owner, to produce and sell it, for 20 long years. The pharmaceutical industry is majorly dependent on the patent system to recover its research and development cost and to generate profits for future innovation.
The Competing Interest: Public Health
Compulsory licensing is an act where the government authorizes a third-party to use, make and sell a patent without the permission of the patentee or the owner, when the medicine is not available at a reasonable and affordable price or when it is not obtainable in a justified quantity. Compulsory Licensing and competition from generic or biosimilar products are general issues that threaten many patent holders. A competing interest is involved here, where on one side, there is a greater good of public interest where the ownership of technological innovation should be with the public, and on the other side, there is private ownership of patents fuelling further innovations.
Biosimilar and generic drugs are sold at a cheaper price and are said to have a trade-distorting effect. However, the provision of consensual licensing instead of any legal compulsion might be a silver lining to this whole circumstance. The possibility stems from the current world scenario where corporate social responsibilities on Multinational Corporations (MNC’s) are an obligation and a single-minded pursuit of business is no more encouraged. This can definitely balance the competing interests of the right holders and the public interest at large.
With the current COVID-19 scenario, the World Health Organization has accepted a proposal for patent pooling in order to collectively share the patent right, test data, and information required to create drugs and vaccines. It showcases an attempt towards navigating patent rights for all countries thereby making new innovations available to everyone.
Patent Pooling is a framework where one or two patent holders enter into an agreement to share their innovation by means of licensing with each other or with a third party in order to provide fruitful technological solutions. Patent pooling can even help in the scenario where technology is not entirely developed and thereby lead to new innovations without any hindrance to access.
However, with the United States trying to quit the World Health Organization, a question emerges – ‘in case they do terminate their relationship, how is the patent pool going to function?’ We all know what happened to the International Trade Organization when the United States chose not to be a part of it and now with the changes in the current arrangement, the question emerges again. The world is approaching multilateralism and is finally able to compromise with nationalism in order to work in solidarity.
Lahama Mazumdar is currently working as a Teaching Assistant in National University of Study and Research in Law, Ranchi and is a doctoral student at National Law University Odisha.