PATENTING THE PHARMA INDUSTRY: A LEGAL V. MORAL ANALYSIS
This article has been authored by Sidra Javed, a third-year student at Amity Law School, Lucknow.
A patent is a type of intellectual property that provides protection to any new or novel invention and gives the inventor the exclusive right to create, use, sell, or manufacture the patented product. Drug or pharmaceutical patents have garnered particular significance as they help in generating great revenue for their commercial uses.
Innovation affects the pharma industry at its roots where drug manufacturers focus on research and development of a new drug. The pharmaceutical industry has, however, come under attack for its ‘unethical’ practice of patenting drugs and the non-accessibility of life-saving drugs for many of the poor both in developed and under-developed countries. The issue has resurfaced during the COVID-19 pandemic where the development of a vaccine was sought earnestly. Thus, an analysis of both sides, i.e., the pharma industry and the IP critics, and their arguments is crucial.
The questions raised by IP critics are frequently met with economic and legal justifications. The principle on which IP is based is contentious. There are justifications for providing exclusive rights to some original useful processes and products if they result in the common good, but the extent to which such justifications can apply must be considered.
Innovation and Pharma Industry
Innovation plays a key role in the pharma industry which attracts its patenting.[i] It identifies the success of the drug manufacturer and provides large returns on investment. Innovation can be granted credit for the benefits outweighing the risks that are associated with the pharma industry due to better profit margins.
Innovation can also be presented as the first argument in defence of the moral legitimacy of restricted IP rights. In an economic system of free enterprise, a person who spends time and money on a product deserves a chance to have recompense if the result arrived on benefits others who are willing to pay for it. For another person to come along, present and market that product as theirs, earn profits without having to put in the time and money that the inventor did, would be unjust to the inventor.
The consequence of eliminating patent protection in the pharma industry produces another argument. It states that restraining a developer from allowing them to reimburse their investments, even if it is for a certain period of time (the time period for which a patent or any other IP right is granted), will discourage other inventors to produce new products for the benefit of the society as no incentive for the same will be available. The pharmaceutical industry and economists have persuasively argued that when pharma companies make enough profits to invest in research in development, more new drugs are produced and available in the market. According to the industry, it is essential to earn large profits to undermine the large expenses of developing a new drug and compensate for initial failed attempts of turning those drugs into marketable drugs.
This can be emphasized by the contribution of revenue by patents to the pharmaceutical industry which roughly estimates to 70 to 80 per cent of the overall revenues of pharma companies. They are one of the most efficient approaches to shield innovation and produce significant ROIs.
Usually, prior to the drafting of the legislation, any negotiations or discussions that would take place would involve parties such as government officials, lawyers, and corporate representatives, which is why any defence put forward for these policies are legal and economic and not ethical.
It is not that these arguments are entirely wrong, but that they tend to prove too much. The fact that every criticism and attack on the pharma industry’s profitable machinery is subjected to these arguments is condemnable. Each criticism of intellectual property protection, pricing, and access is met with that unless the pharma industry is profitable enough to invest in or engage with R&D in the future that benefits the society, they’ll stop doing so completely.
Do the Pharmaceutical Companies have Moral Responsibilities?
Unquestionably, the complete obligation to fulfil the abovementioned rights does not fall on these companies as they are not the only health care providers. If they do have any special obligations, however, then so do the governments, individuals, NGOs, families and so on. The two basic ethical obligations that pharmaceutical companies do have is to produce and provide access to drugs.
The obligation to produce beneficial drugs lies upon the pharma industry as it is the area of the industry’s expertise. The benefit to the patient, the public at large, and to the common good should play a key role in matters of health care. The obligation to produce new life-saving drugs must be taken seriously and these should be pursued more than the alternatives to existing drugs. This obligation is not an unfair imposition on the companies by society as it merely reflects an essential part of the role of pharmaceutical companies.
The obligation to make drugs available to those who need them is the access obligation. This is the obligation primarily in contention with the existing practice in the pharma industry regarding intellectual property, pricing, government regulations, and donations. The critics of the pharma industry claim that the right to health, right to health care, and the right to access take precedence over patents.
The problem of accessing any drug is a pressing necessity. While governments are under the obligation to allow or provide access, many of them lack the resources to do so. As a result, the burden falls on those who are able to do so. Pharmaceutical companies, particularly those that produce the necessary drugs, are included in this number.
RIGHT TO HEALTH CARE
The fundamental right to health is not expressly guaranteed by the Constitution of India but multiple references have been made on the role of the State in ensuring health care to its citizens.
Since no explicit recognition of this right has been given in our Constitution, it was interpreted as a right under Article 21 by the Supreme Court in Bandhua Mukti Morcha v. UOI & Ors. It was reaffirmed that the right to health is fundamental to the right to life under Article 21 by the Supreme Court in the State of Punjab & Ors. v. Mohinder Singh Chawla where the Court stated that the government was under the Constitutional obligation to provide health services.
The critics often state that the legal and economic arguments justify the right to intellectual property, but this right is not absolute. In the case of the pharma industry, it is applied against other rights, namely, the right to life, the right to adequate health care, and the right to access life-saving drugs. It appears against the obligatory task of the State to help those in need.
It is impertinent here to differentiate between the right to health and the right to health care. Article 25 of the Universal Declaration of Human Rights (UDHR) states:
“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age, or other lack of livelihood in circumstances beyond his control.”
There are a number of rights incorporated within this Article but what is of the essence to us is the right to health and the right to medical or health care. The Member States of the UDHR implement its contents through their respective domestic laws. Pursuant to this, it can be rightly said that the obligation correlative to the right to health falls on the State. The right to health is one of the most essential elements of the right to life. Though the State cannot give anyone health, it has to ensure that prevailing conditions are good enough for people to maintain their health.
Conclusion : The middle Ground
Governments may guarantee a certain amount of profit for companies producing such drugs; governments may grant them insurance for a longer period of time so that they can earn back their significant investments and earn a profit while ensuring that those in need have access to such drugs during that time; governments may be the primary buyers and distributors of those drugs.
One middle ground which could be agreeable to both sides can be the adoption of a Code that would regulate ethical practices in the pharma industry and strive to eliminate and prevent abuse. A Code so developed must be agreed upon by the pharmaceutical industry and not imposed on it. Such a Code shall also not be self-serving to be efficient, and the same should be widely publicized to enable accountability on the part of the pharma industry.
The present COVID-19 pandemic situation has made it painfully clear that the pharmaceutical industry is profit-driven machinery that employs patent monopolies to ensure that no other company can make or sell their drug for a certain number of years. In the COVID-19 vaccine situation, Pfizer and BioNTech have decided on the customers and the pricing of its vaccine. This has enabled them with a legal monopoly without any competition.
The wider populace has lost trust in the pharmaceutical industry. Implementation of such a Code by the industry will be a positive first step toward rebuilding public trust and confidence.
[i] Angelo Kenneth S. Romasanta et al., Innovation in pharmaceutical R&D: mapping the research landscape, SCIENTOMETRICS, 1801-1832 (2020).