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“SOCIO LEGAL ANALYSIS OF IMPACT OF WTO ON
PHARMASUTICAL INDUSTRIES IN INDIA”
Introduction
The Indian pharmaceutical industry is a will-turned, advanced technological based industry that has witnessed consecutive growth over the past three decennary. The current industry plays reckon on several privately owned Indian companies that have hold a substantial share in the domestic pharmaceutical market due to elements such as favorable government policies and incomprehensive competition from overseas. However, the liberalization of the Indian economy is transforming Indian industries as they begin to rise up from domestic markets and gear up for international competition. The Indian pharmaceutical industry is a main instance of an industry that is being forced to revisit its long-term programs and business models as India opens its markets to global trade. Elements such as protection of intellectual property are increasing in importance due to the recognizance of the requirement to ensure protection of valuable investments in research and development (R&D). India has a peerless position among the countries in the developing countries for it has strong generic pharmaceutical industries, which has been able to provide medicines at lowest price in the world. And much of the credit researchers give to Patent Act.
The first amendment of the Patent Act, 1970 instituted the requirements under the “transitional arrangements through Section 5(2)’ which permitted product patent applications to be filed, which Chapter IVA provided for the grant of Exclusive Marketing Rights 1
. On 1 st of January, 2000, a second Amendment had to be introduced for conducting the Patent Act in compliance with all the substantive provisions the Trade- Related Aspects of Intellectual Property Rights (TRIPS) Agreement, barring those related to the introduction of product patents. The key issues included in the Second Amendment were, re-defining patentable subject compulsory licensing system 2 . A third amendment has to be introduced by 1 st January, 2005 to introduce product patent regime in areas, including pharmaceuticals that were previously covered by process patents. Although the third Amendment had a narrow remit, the Government used the opportunity to undertake yet another review of the Patents Act. Among the major issues included in the Third Amendment were provisions relating to opposition to the grant of Patents 3 . 1. This amendment was notified on 26th^ **of March 1999 in the Gazette of India as the Patents (Amendment) Act, 1999
- This amendment was notified on 25th of June 2002 in the Gazette of India as the Patents (Amendment) Act, 2002
- The third amendment was notified in the Gazette of India on 5th**^ of April 2005 as the Patents (Amendment) Act, 2005.
Justification for undertaking research problem: The main purpose to select this research topic is that, to give the focus on the controversial character of the flaming topic of Socio-Legal Analysis on Impact of World Trade Organization (WTO) on Pharmaceutical Industries in India.” And to explore, in detail the effect of World Trade Organization (WTO) and its treaties on Pharmaceutical Industries in India. This research is propelled to conduct the purpose and unbiased academic research based on the actual facts and data of this crucial issue of public interest. Relevancy to the legal field and specifically to the specification of researcher: The researcher has keen interest to carry out her research on the topic entitled, Socio-Legal Analysis of Impact of World Trade Organization (WTO) on Pharmaceutical Industries in India. The researcher has specialization in Business Law. The research topic is related to Intellectual Property Right in which specially covers under Patent Act and World Trade Organization (WTO) and its conventions. This research is nothing but the study of World Trade Organization (WTO) and its impact on Patent Rights Particularly subject to pharmaceutical Industries in India. So that to achieve deep knowledge and to provide proper solutions on this topic.
Scope of the study: The researcher focused on the scope of the enforcement of Patent rights specifically related to pharmaceutical industries in India with the impact of World Trade Organization (WTO) on Act and drugs and medicines. Were the effect of the second amendment i.e. process patent and extension of the term of patent protection to 20 years and amending the compulsory licensing system give new route to pharmaceutical industries in India. Problem emerged from WTO membership: Against this context of India’s rapid development of the pharmaceutical industry, when India had to accept the membership of World Trade Organization (WTO); there were partly deemed appropriate by law and partly exaggerated fears in the contumacious quarters of captains of pharmaceutical industries, economists, policy makers, elected law makers from different political parties and the general public.
- Indian pharmaceutical industries due to their capital deficiency will be unable to survive in the environment of open business emulation.
- Due to the acceptance of ‘patent rights’ and the monopoly of MNCs in Global pharmaceutical market, Indian consumers will have to pay exorbitant prices to foreign companies. Indian Drug Manufacturers Association (IDMA) protested that prices of all medicines will rise
After finalizing the topic and setting the researcher has to review the various literatures. For the purpose of study researcher should know basic concept relating to this topic. So that researcher has to review the available source in which he can clear his basic concept about topic. The researcher had reviewed the books and journals of eminent authors such as International Journal of Multidisciplinary Studies (Volume I) by Dr. Prof. Nasir B. Shaikh (HOD MMCC Pune), Indian journal of Science and technology by Rupesh Rastogi, Department of Business Administration, Azad Technical Campus, Lucknow, Trases in India’s Trades in Pharmaceutical sectors: Some Insights by Dr. Murali Kallummala, Associate Professor, center for World Trade Organization (WTO) studies, IIFT, Effect of Product Patents on the Indian Pharmaceutical Industry by Biswajit Dhar, Professor and Head, Centre for WTO Studies and KM Gopakumar, Research Officer, Centad, Eurasian Journal of Business and Economics 2011, 4 (7), by Ravi KIRAN Professor Thapar University, Patiala and Sunita MISHRA, Professor, MM University, Mullana. Objectives of the Research: i) To analyze the effect on Drug price after the amendment of 2005. ii) To examine the developments in Indian Pharma Policies, Indian laws governing the practices of the industry and the trade, various controls, quality and pricing policies, patent acts, rules and
regulations, changes in Indian legislation and controls during the membership of the WTO. iii) To examine the impact of direct and indirect controls of WTO and WHO on Indian Pharma Business. iv) To make exhaustive analysis of the positive and negative impact of Trade-Related Aspects of Intellectual Property Rights (TRIPS), on India’s pharmaceutical business. v) To make objective assessment of the pros and cons, advantages and disadvantages, benefits and losses and the opportunities and threats causes by the new region of the WTO. Hypothesis: The primary idea is called a Hypothesis. The term hypothesis has several meaning. It may be taken to mean a possibility a supposition or an assumption. In general it is taken as a proposal to accept something as true; it may prove to be correct or incorrect or incorrect. If a man suffers from diarrhea we guess that he has drunk impure water or eaten with dirty or contaminated hand. This is the example of our day to day hypothesis.
A research design is a research planning of the proposed research project to conduct the empirical test of the hypothesis or to test the veracity of it. The researcher has planned to use survey design. The survey of the pharmacy shop, wholesaler and representative (Medical Representative) pharmaceutical industry in empirical or non-doctrinal manner in Yavatmal city. The questionnaires method is to be used for data collection. The questionnaires are drafted in English and Marathi languages.
Research methodology:
Meaning of Research: Every branch of knowledge articles research method for its investigation. Method of research is many varying from approach to adopt towards the study of phenomenon. It has been rightly said that, Research is the systematic activity to achieve the truth and it includes the procedure of collecting data, analyzing the data and finding the conclusion or truth. There are two types by which research collect data.
Meaning of Research Methodology: Method is the way of doing something methodology. It is the science or study of a particular subject. Research Methodology is much wider. The method a researcher follows in pursuing a research a research is called research methodology. Research Methodology is systemized investigation to gain no knowledge about the phenomena or problems. Thus the concept of research methodology is much wide. The law is made according to the needs of the society it means that the fruits of law enjoyed by the people but at some time it is not accepted by society or they don’t know about law and their rights. Then such law is fruitless. There are two types of research methodology, they are – (a) Doctrinal or non-empirical research methodology. (b) Non-doctrinal or Empirical research methodology. Doctrinal or Non-Empirical Research Methodology: Doctrinal or Non-Empirical Research Methodology means a research that has been carried out on a legal proposition by applying the reasoning power. The Doctrinal legal research attempts to verify the hypothesis by a firsthand study of authoritative sources. Non-Doctrinal or Empirical Research Methodology:
In this way researcher has prepared synopsis for the topic that is “Socio-Legal Analysis of Impact of WTO on Pharmaceutical Industries in India”. In modern age competition are increasing day by day. Thus it is clear that there come so many efforts which moving towards development such that WTO convention’s impact can be seen in the form of amendment in the Patent Act specifically related to pharmaceutical industries which directly-indirectly positively-negatively affects to the society. To know the actual situation in the society, the research is needed.
Chapter I
Historical Background
Patent are intellectual property generally possessed by the inventor. They usually protect the right of the patent-holder, where a patent gives you ability to take legal action trying to stop others from coping, manufacturing, importing or selling your invention without your permission. But before further elaboration on it, to understand the concept of intellectual property is essential. Intellectual property is property possessed by virtue of the mind, inventions; literary and artistic work; and images, symbols and manes used in commerce. It is not tangible but can be converted in tangible form, and its importance has been on the rise in the recent years. Unprotected for a long duration in comparison to physical property, the value of intellectual property has increased manifold over the recent age with the growth of the research and development (R&D) sector in addition to the growth of the research and development (R&D) sector in addition of growing awareness among people about the protection of this property. The main reason to safeguard intellectual property is to promote creativity and encourage research by protecting the commercial interests of the inventor. Intellectual Property is divided in to two types: a) Copyright: Copyright typically safeguards creative intellectual property, which normally covers literary (poems, books, textbooks and plays), films, music, artistic works. The sole right
The question of patenting of pharmaceutical products is reputedly hiked up, as they are necessaries. These products are central to protecting the basic rights of the general public. If absolute rights to this effect are provide to these companies, they may exploit them at the expense of the wellbeing of the entire society. But, on the other hand, denying these rights takes away the incentive and recognition of the inventor, which in turn reduces the much needed research and development in this field. The objective of this paper is to ascertain the position taken by India in this regard, to evaluate the alternate to it, and to solve the conundrum of balancing protection public interest by careful consideration of all facts related to the issue. Journey of the Patent Law in India The firs law regarding patenting of products in India came in the form of Protection of Inventions Act, 1856 which was largely based on British Patent Law of 1852. This law granted exclusive privilege to inventors for a period of 14 years. Several new amendments to this Act and similar acts came in the following years, to be finally consolidated into a single inventions and Designs Act, 1888. In 1911, a newer version of the 1888 Act, the Indian Patent and Designs Act was enacted. It permitted patenting both processes and products of 14 years. But after India attained independence, it underwent several economic and political transitions. The Act of 1911 no longer resonated with the conditions of the Indian society. In 1949 the government appointed the Patents Enquiry Committee to review the working of the patent law in India, which submitted its report
in 1950. The report was largely based on the report could not be enacted due to the dissolution of the Lok sabha. In 1957, Justice R. Ayyangar was appointed to review the patents law afresh. He submitted his report in 1959, which formed the basis of the Patents Bill, 1965. The findings of the report indicated that foreigners held up to 95% patents in the field of pharmaceuticals. It thus, incorporated changes with regards to food, drugs and medicines. Both the Houses of the Parliament passed the Bill in 1970 and it came into force on 20 April 1972. India adopted a different patent law in 1972 to facilitate acquisition of indigenous industrial capability. Under this law, the life of a patent was limited to between five to seven years. This new law was mainly geared towards the pharmaceutical sector and it significantly weakened the intellectual property Regime. Other than shortening the life of the Patents, the Act was very particular in keeping the food and pharmaceutical industry entirely away from the patent system. It also granted only process patents and not product patents, that is, the act only monopolized. In case of product patents, the inventor of the product has the absolute to the product, whereas in case of patenting of the process, the product may be produced by another but not through the same process. The concept of social justice was underlined the Act in intending to keep the necessaries of society away from the patent monopoly.
The developing countries accepted the terms of the TRIPS regarding the pharmaceutical industry even though countries such as India and Brazil had fast growing generic pharmaceutical industry of their own. This is because in return, these countries were given greater access to developed markets for traditional manufactured goods plus a commitment of the developed countries to stop imposing unilateral trade sanctions for allegedly inadequate portion of foreign intellectual property rights. Thanks largely to the fortitude and analytical skills of the Indian delegation, the right of governments to grant compulsory licenses on any ground including public interest, abuse or anticompetitive conduct, or for noncommercial government use, among others issued stringer and clearer from the TRIPS Agreement that had previously been the case under any other convention. Also, the Doha Declaration of 2001 addressed the concerns of the developing countries regarding the provision of compulsory licensing and the pharmaceutical industry when it was not and should not prevent Members from taking measures to protect public health. The concept of compulsory licensing is mentioned in Article 31 of the agreement. According to Article 31 of the agreement, compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. The Article also lists certain conditions to be met before granting of a compulsory license. The essential conditions among others are as follows:
The person or company applying for a license must try to negotiate a voluntary license with the patent holder on reasonable commercial terms. Only if that fails can a compulsory license may be issued. Even when a compulsory license has been issued, the patent owner must receive payment; according to the TRIPS Agreement, “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.” It cannot be given exclusively to licensees, that is, the patent-holder or another person or company can produce the license should be subject to legal review in the country. Other than the conditions listed by the TRIPS agreement, different nations may issue the license on grounds cited by the authorities in the nation. In India, for example, the patents law provides the certain situations when a compulsory license may be issued. Sections 84 to 92 of the Patents Act, 1970 (amended in 2005), lists them as follows: Reasonable requirements of the public with respect to the patented invention have not been satisfied Patented invention is not available to the public at a reasonably affordable price Patented invention is not worked in the territory of India.
