Profiteering from Pandemic

Today, Corona virus, also known as the Chinese or Wuhan virus, has engulfed almost the whole of humanity. There is an increasing risk among the people who are infected and those who are not. Health facilities appear to be dwarfed in comparison to the severity of the pandemic. In such a situation, there is an acute shortage of beds, ICUs and ventilators in hospitals. Due to the severity of the crisis, there is huge pressure on oxygen, medical devices, medicines etc. Although the government has made efforts to ensure the availability of beds, medicines, oxygen, those efforts are far too little in the face of the current tragedy. Countries like America, England, Italy,

Brazil etc. have had gone through the similar situations.

There is no dearth of people in India earning profits by taking advantage of people’s compulsion in this type of tragedy. We hear that not only the sellers of medicines, oxygen, oximeters etc., hospitals are also not behind in profiteering. The only way to solve this crisis is to make available adequate equipment and medicines for treatment.

Though small players’ role can’t be denied, so far as the shortage of medicines, their high prices and high profiteering are concerned, global multinational companies are much to be blamed. Due to patents and other intellectual property rights (IPRs), these companies command monopoly rights over production of essential medicines and also medical devices. Due to these laws, the production of these medicines and devices remains concentrated in a few hands, making these companies charge high prices. Recently we saw that the injection named Remdesivir was priced between Rs 3000 and Rs 5400. Though, after government’s intervention, its price has been reduced, the availability of these medicines remains a major issue. Due to the shortage, these injections are being black marketed and sold between 20 thousand and 50 thousand. Similar is the situation for other medicines, and patients are facing a huge shortage and black marketing.

It is not that Indian companies can’t manufacture these medicines, but since global companies have patents over these medicines, they can manufacture only under the patent company’s licence. These licensee manufacturers’ prices are also very high due to the element of exorbitant royalty.

These companies indeed have patents for these medicines, but still the Government of India can not only increase the production of these medicines but can also give relief to the people by drastically reducing their prices. Significantly, this type of patent-related problems were not there before the World Trade Organization (WTO) was constituted. Prior to WTO, the government could issue a license for the production of any medicine and ensure its production. Due to this, India’s pharmaceutical industry was providing cheaper medicines not only in India but also around the world. With the formation of WTO in 1995, the TRIPS (Trade Related Intellectual Property Rights) Agreement came into force. The agreement imposed several conditions over member countries that they would amend all their intellectual property laws, including patents, and make them stronger (that is, in favour of patent holder companies). There was a lot of opposition even before this agreement was inked in GATT, because it was evident that after this agreement, medicines would become costlier and may go out of reach of the people, and public health would therefore be endangered.

Looking at the likely positive effect of such a move on humanity, a group of lawmakers in the United States had also urged President Joe Biden to support the waiver proposal. Nearly 300 members of the European Parliamentarians urged the European Commission to support the waiver proposal. Recently, 100 Nobel laureates and former heads of the states, including the former Prime Minister of the United Kingdom Gordon Brown, requested the US President to support the waiver proposal

In such a situation, India had resolved public health concerns to a great extent by incorporating many safety measures for public health while amending the patent laws, bypassing the pressure of the World Trade Organization and the developed countries. In this endeavour, the efforts of politicians rising above party lines, mass organisations, and other civil society organisations had been commendable. Although the product patent was applied in place of the process patent and the patent period was also increased from 14 years to 20 years; despite the waiver for production of generic medicines, ruling out re-patenting or ever-greening of patents, provision of compulsory licence, pre-grant opposition etc., were some such provisions placed in Indian patent law, which could address public health concerns to a great extent. But despite all this, the governments of other countries, including the US, kept pressuring India to relax its patent laws and make minimum use of the provisions available in their laws, which restricted the profiteering by companies.

There is a provision for grant of compulsory license as per Chapter 16 of the Indian Patent Act (Amended) 1970 and TRIPS provisions. A compulsory license means a license issued by the government, that is, permission according to which a producer is given the right to make, use, and sells a patented product without the patent holder’s permission. This means that in the context of medicines, namely, Remdesivir and other medicines, currently used to treat persons infected with COVID-19, if the government issues a compulsory license, then any pharma manufacturer in India can manufacture the same by giving a reasonable royalty to the patent holder. Manufacturers who produce these medicines will have the right to use and sell that product.

Experts believe that Indian Patent Act (Amended) 1970 gives right to the government to issue compulsory licenses under sections 92 and 100 to produce vaccine and medicines. The government may voluntarily (suo moto) issue a compulsory license using these clauses for non-commercial government use in view of ‘national calamity’ or ‘extreme urgency’. Significantly, these companies are trying to make profits from the worst pandemic faced by humanity; the governments of countries like the US are preparing to exploit the developing and poor countries by hoarding these drugs and vaccines. Recently, the US government had imposed curbs on the supply of raw materials needed for vaccine production in India and prohibited the release of the vaccine stored with them to other countries, including India. Later, they had to lift the ban on the export of raw material for vaccine due to international and domestic pressures. There are also reports of massive hoarding of Remdesivir vaccine by the Gilead Company. In such a situation, it has become extremely necessary to introduce compulsory licenses for the production of these drugs and vaccines in India.

Although the Government of India, along with South Africa, has also approached the WTO to relax the TRIPS provisions, countries like USA, Europe, and Japan are trying to block the proposal. In such a situation, the government should use its sovereign right to grant these compulsory licenses immediately so that the people affected by the pandemic may be protected from exploitation of these companies. Significantly, the Doha Ministerial Conference of the WTO came out with ‘The Doha declaration on the trips and public health’, in which the sovereign rights of governments were recognised that in case of any emergency or extreme urgency, member countries can bypass TRIPs provisions. The declaration allowed member countries to “determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises”. On 30 April 2021, the Honorable Supreme Court has also asked the Central Government why the government is not thinking of implementing compulsory license for medicines related to Corona?

There can’t be a bigger national emergency than the present one. A country needs a range of medical products in its fight against COVID-19; therefore granting of Compulsory Licence policy upon one product or two is not sufficient to ensure an effective response to COVID-19. Under these circumstances, in October 2020, India and South Africa made a formal submission to the WTO, seeking a waiver on certain provisions of the international agreements that regulate intellectual property rights to speed up efforts to prevent, treat and contain the Covid-19 pandemic. The waiver proposal seeks the waiver from certain TRIPS provisions related to the protection and enforcement of intellectual property rights (IPR) to facilitate the availability of affordable medical products for the effective prevention, containment, and treatment of COVID-19.

 

Recently, Minister of Commerce and Industry Piyush Goyal has also sought support for this proposal from WTO while speaking at an event organised by the Director-General Ngozi Okonjo-Iweala. The proposal currently enjoying the support of nearly 100 the WTO Member States, though initially was being blocked by a handful of developed countries; however, United States (US) and European Union (EU) have changed their stance and have favoured waiver from IPR for Corona vaccine. There is no doubt that this move of the waiver on certain provisions of the agreement is expected to help more countries, especially middle- and low-income nations, access vaccines and other essential medicines.

Looking at the likely positive effect of such a move on humanity, a group of lawmakers in the US had also urged President Joe Biden to support the waiver proposal. Nearly 300 members of the European Parliamentarians urged the European Commission to support the waiver proposal. Recently, 100 Nobel laureates and former heads of the states, including the former Prime Minister of the United Kingdom Gordon Brown, requested the US President to support the waiver proposal. Some Parliamentarians have even accused the United Kingdom Government to be playing on tunes of pharma companies. Though now the US has lifted the embargo on raw material for the vaccine, the important takeaway from the episode is that we cannot depend on other countries for the essential materials, may it be anything.

The prevailing pandemic situation in the world has taught us a big lesson that the survival of humanity is much more important than economics. Therefore, it’s time to protect the health of the people worldwide and place the patentee and trade secret protection below peoples’ lives. Though efforts of the government at the trade diplomacy level are commendable, it would be appropriate at this time that the government of India takes the following steps to ensure access and availability of the medicines and vaccines required urgently in our fight against COVID-19.

• Allow more generic companies to produce Remdesivir under the government use license (Section 100) of the Indian Patents Act with a price ceiling.
• Issue as many government use licenses to produce Tocilizumab and Sarilumab and other critical medicines required to save the life of COVID-19 patients suffering from cytokine storm.
• License vaccine production widely to more pharma companies with technological capabilities, instead of a few companies.
• Provide the regulatory clearance to start the local production of the Sputnik V vaccine.