This article is written by Ms. Srikrishna Samhita Yadati a Second Year B.A.LL. B student of ILS Law College, Pune

Abstract

The pharmaceutical industry’s pivotal role in global healthcare, accentuated by the COVID-19 pandemic, emphasizes the significance of intellectual property rights (IPR) and patent protection. The evolution of India’s pharmaceutical sector, from import dependency to a global drug supplier, reflects the impact of strategic policies and international agreements. Challenges, notably in drug pricing and accessibility, underscore the delicate balance required between exclusive rights and public welfare. The expanding domain of drug delivery systems adds complexity, necessitating a comprehensive legal framework. Bridging gaps between patent laws and drug regulations is crucial for effective protection and implementation. A holistic review is essential to sustain innovation, accessibility, and public health.

Keywords: IPR, patent protection, pharmaceutical sector, drug pricing, drug delivery system.

Introduction

Pharmaceutical formulation is a process involving multiple steps of adding and mixing chemical compounds to bring out the medicine. With the advent of COVID-19, the pharmaceutical industry has become stronger in formulating new drugs and medicines and gained a lot of prominence due to its intricate operations in producing novel vaccines. Developing a new drug and successfully bringing it to the market is a risky and lengthy procedure and also costs a large amount for the company. The pivotal aspects revolving around pharmaceutical companies are intellectual property policies, R&D incentives, accessibility to medicines and drug pricing. In a world of pharmaceuticals, the role of IPR has become increasingly crucial for this sector in protecting invention, promoting research and supervising fair competition in the health sector. These pharma companies are big players in the economy and big bulls in profit-making and therefore the need for regulating their drug inventions, survival and strategies becomes vital. Among IPR, the patent system is majorly known to be the legal framework protecting the inventions of these companies. To encourage innovations, patent plays a huge role in giving a temporary monopoly to the owners of a particular drug or product which in turn enables them to acquire profit out of it. 

An important function of these pharma companies is to evolve a standardized drug delivery system that is efficient and effective. Drug delivery systems are a form of technology that discharges a particular drug or medicine into a person’s body. They may range from the method of delivery (swallowing a pill) to packaging drugs (prevention of drug degradation). In the current medical practices, the drug delivery system has become advanced to include a lot of nitty-gritty in administering medicines. It is obvious that a legitimate means of protecting the drug delivery systems is required and for that vigorous set of intellectual property policies is needed because drug delivery strikes a balance between both public healthcare and IP protection. This is essentially a win-win situation for the pharmaceutical companies and medical practitioners on one hand and the public on the other as it yields profit for the companies and welfare for the people.

IPR Laws and the Indian Pharmaceutical Sector

The main objective of IPRs is to benefit the owner of a product to enjoy a monopoly for a defined period. The principles governing IPR are well established globally; the World Trade Organization along with the World Intellectual Property Organization (WIPO) have set out clear guidelines as to how these intellectual properties are to be respected and enforced. IP laws, especially patent law, have paved the way to hold utmost prominence in the pharmaceutical industry. This industry involves research and development which are vital to every company’s operation in the market. Huge amounts of money are invested in R&D so that new drugs and medicines can be produced while the well-being of society is ensured. However, investing in R&D for any company can be a pain considering the cost involved and the amount of time consumed for preparing a drug to be sold in the market. This is the reason why IP laws, specifically patents, are significant in this industry. These rights foster a sense of security in providing these companies with exclusive rights and sort of compensating for their investment in R&D. There are two aspects of IPR that centre around the pharmaceutical companies: first, is the linkage between patent rights, exclusion of competitors and pricing and accessibility to the new medicines. The second issue pertains to the effect of IPR on R&D expenditure in providing incentives to innovate and bring in new medicines. 

The pharmaceutical industry has a lot of complexities within itself and they are differently regulated according to different countries’ market conditions. The Indian pharmaceutical sector has evolved to be one of the most successful industries globally. Initially, until 1972, India was import-dependent deeming most of the life-saving drugs were unaffordable. Later, novel policies such as the New Patents Act of 1972 and Drug Price Control Order (DPCO), 1970 laid robust underpinning for the pharma industry in India. The emphasis of the public sector on the pharmaceutical industry and the implementation of policies restricting the dominance of multinational corporations contributed to a policy environment favourable to the expansion of domestic firms. This, in turn, positioned India as a significant supplier of pharmaceutical drugs on the global stage. Along with this, the patent laws in India have undergone mammoth changes after India signed the TRIPS Agreement in 1995 and amended its patent law to comply with the agreement. Many amendments followed thereafter. For instance, the Patents (Amendment) Act, of 2005 only provided patentability to pharmaceutical substances that have new chemical entities. These revisions made to the patent legislation have shaped the Indian pharmaceutical sector. However, with huge multinational companies investing in India and establishing their subsidiaries, a string of problems of evergreening and skyrocketing pricing have emerged. Patent infringement is still a major concern for these pharmaceutical companies. Granting patent protection for minor enhancements, where only incremental improvements are revealed, could enable multinational corporations (MNCs) to enforce or sustain elevated drug prices compared to generic alternatives, potentially impeding access to medications. This poses a significant challenge, especially for impoverished, underserved, and third-world populations, as the elevated costs may hinder their ability to obtain essential drugs.

Pharmaceutical Formulations and Drug Delivery System in India

Pharmaceutical formulation is a composition of chemical entities and variants and treatment protocols that are to be implemented during clinical application. There are currently numerous medicinal formulations available in the market for the public utility. These formulations take up a considerable amount of time and money to develop and test their effectiveness. It has clinical relevance because they are largely contingent upon one’s quality of life, disease consequences, etc. Moreover, the efficacy of a pharmaceutical treatment relies on various factors, encompassing the chemical characteristics of a medication, its formulation, and the method of administration. In addition to that, since a huge investment is made in these formulations, protecting it is even more significant. Patents can be considered to be an inevitable part of the pharmaceutical industry in safeguarding the formulations resulting from long-drawn clinical processes.

In the field of medicine, there is a multitude of patents that the innovators can avail to gain monetary benefits or protect their inventions:

• Product patents – gives an exclusive right to the inventor upon the tangible product created by him or her. This type of patent is regarded as the highest level of legal protection.
• Process patents – protect the method or manufacturing process used in developing medicine and not the product itself. One major advantage that this patent regime has is that the government can control the monopoly that big MNCs have in the market and safeguard the interest of the poor.
• Formulation patents – safeguards the pharmaceutical formulation of a pharmaceutical ingredient mixed with other ingredients which is finally administered to the patient. It protects the dosage form of the drug.

The third type of patent regime has a peculiar relation with the system of drug delivery which is the administration of a drug through a technology or any method. In today’s time, an effective drug delivery system has become the need of the hour which in turn has implications on the human body. A newer concept, known as the Novel Drug Delivery System has come into place which refers to administering a pharmaceutical formulation in new ways that can yield therapeutic benefits. India has emerged as a global leader in the pharmaceutical sector and drug delivery system has been enthusiastically pursued in Indian laboratories. Indian pharmaceutical companies are not only licensing their novel drug delivery system (NDDS) technology to global pharmaceutical companies but are also collaborating with them to develop new NDDS technologies through licensing agreements. Typically, formulation patents are a way of protecting drug delivery systems. However, in India, there is the Indian Patent Act, 1970 which gives legitimate protection to the drug delivery systems, though not explicitly. There are set 3 grounds for patentability. i.e., novelty, inventive step industrial application and certain exceptions of public order (which involves compulsory licensing). A noteworthy exception is relating to the therapeutic methods which means that if a method of treatment is administered using a known drug delivery system, then it is not patentable. Additionally, the Indian Patent Office has set out some guidelines for examining the patent applications for different types of drug delivery. However, there is much scope for protection of these drug delivery systems. The Indian legislation has a long way to go to ensure effective protection and implementation of the drug delivery system in India.

Interaction between Patent Law and Drug regulations

In recent decades, many nations and international organizations have made substantial efforts to standardize a law to govern the pharmaceutical industry through pharmaceutical patents. Before its membership in the World Trade Organization, India did not have a product patent regime and therefore it was the leading country in manufacturing generic medicines. Nonetheless, post-TRIPS, India started to recognize product patents for pharmaceuticals and subsequently amended its patent law. What seems to be missing is a cohesive linkage between the patent and marketing approval process for drugs. While the Indian Patent Act, of 1970 gives a clear outline of the subject matter and exceptions to patentability of pharmaceutical inventions, it doesn’t create an association with the drug regulations. This often poses a challenge to the inventors to enforce their patent rights. The problem of drug pricing is something that falls in the domain of both patent and drug regulations. In the case of the patent system, compulsory licensing comes into the picture where the drugs or any new medication can be utilized for a sum of money which the owner may charge. A significant challenge here can be the charging of high prices which may discourage other researchers from undertaking further research and essentially defeat the purpose of patent which is to motivate inventions. In the case of drug regulations, an obvious point would be the concern for public health and charging minimally in necessary or emergency health situations. However, there is still a lacuna of intersection between these two major domains in India and this calls for a review process for the laws in India.

Conclusion

The pharmaceutical industry, with its intricate processes of formulation and drug delivery systems, plays a pivotal role in global healthcare. The advent of COVID-19 has underscored the industry’s significance, prompting increased innovation and the development of novel vaccines. However, the journey from drug development to market accessibility involves a complex interplay of factors, with intellectual property rights (IPR) and patent protection standing out as crucial pillars. The Indian pharmaceutical sector, in particular, has evolved significantly, transitioning from import dependency to becoming a major global supplier of pharmaceutical drugs. This transformation can be attributed to strategic public sector focus, policy initiatives, and changes in patent laws, influenced by international agreements like TRIPS. While patents are essential for incentivizing innovation and protecting investments, challenges arise, particularly in the context of drug pricing and accessibility. The delicate balance between exclusive rights for pharmaceutical companies and ensuring public welfare has led to debates about evergreening and the potential negative impact on drug prices, especially in underserved populations. The importance of patent protection extends beyond traditional pharmaceutical formulations to encompass the emerging field of drug delivery systems. These systems not only enhance the effectiveness of medications but also require robust IP policies to balance public healthcare needs and innovation protection. However, the current legal framework in India, while recognizing the importance of protecting drug delivery systems, presents challenges. The Indian Patent Act, with its grounds for patentability and exceptions, and the lack of a cohesive link between patent laws and drug regulations, create complexities. Bridging this gap is crucial to ensure effective protection and implementation of drug delivery systems, reflecting the dynamic nature of the pharmaceutical industry.

In the ever-evolving landscape of pharmaceuticals, there is a need for a holistic review of laws, addressing the intersection of patent protection and drug regulations. Striking the right balance will not only foster innovation but also ensure fair pricing and accessibility, particularly in the context of public health emergencies. As the industry continues to grow and adapt, a comprehensive and integrated approach to intellectual property and regulatory frameworks will be essential for sustaining the delicate equilibrium between innovation, accessibility, and public health.

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