The Indian government has recently lifted price restrictions on new and innovative drugs produced by foreign pharmaceutical companies. This decision, sanctioned under the Indian Patent Act, 1970, specifies that these restrictions are lifted for the first five years from the date of the manufacturer’s first commercial marketing undertaking in the country.
Benefits to Indian Patients
This move will grant access to Indian patients to drugs that were formerly only available abroad. These comprise orphan drugs, which are employed for the treatment of rare medical conditions.
Orphan Drugs
Defined as medicinal products formulated for diagnosis, prevention, or treatment of severe or life-threatening diseases or disorders that are rare, orphan drugs often generate limited interest within the pharmaceutical industry due to their targeted application towards a small patient pool.
The Role of Patents
Patents serve to provide the patent owner legal means to prevent others from making, using, or selling their new invention for a limited period, subject to certain exceptions. However, a patent does not guarantee the product is safe for consumers nor can it be supplied. Such patented pharmaceuticals are still subjected to extensive testing and approval before market launch.
Section 3(d) of Indian Patent Act, 1970
This section of the Indian Patent Act prevents the “ever-greening” of patents, which translates to no support for inventions that are minor modifications, effectively preventing undue monopoly during the extended period of patent protection.
Compulsory Licensing (CL)
Compulsory Licensing allows governments to license third parties to produce and market a patented product or process without the consent of patent owners. After three years from the date of sealing of a patent, an application for compulsory license can be made if the public’s reasonable requirements have not been satisfied, the patented invention is not available at a reasonably affordable price, or the patented invention is not worked in India.
Drug Price Control Orders (DPCO) and The National List of Essential Medicines (NLEM)
Under Section 3 of the Essential Commodities Act, 1955, the Union government issued an Order to provide essential and life-saving medicines at a reasonable price to the public. This included creating a National List of Essential Medicines, known as Schedule-I of DPCO, which is reviewed periodically by the government.
| NLEM | Year of Revision |
|---|---|
| First | 1996 |
| Second | 2003 |
| Latest | 2011 |
Previous Controversies
Previously, the United States raised concerns about Indian price controls on coronary stents and knee replacement implants, prices of which were drastically reduced. The US announced a review of India’s Generalized System of Preferences (GSP) benefits after receiving complaints from the US dairy industry and the US medical device industry about Indian trade barriers affecting US exports in these sectors.