Ever-greening of Patents:-
“Evergreening,” is referred to the practice whereby pharmaceutical firms extend the patent life of a drug by obtaining additional 20-year patents for minor reformulations or other iterations of the drug, without necessarily increasing the therapeutic efficacy. However it has become a practice in the pharmaceutical industry where on one hand innumerable patients struggling to afford the high priced patented drugs, while on the other hand innovators struggling to give immortal value to their creation.”
Patent Act:-
A patent as described in the Indian Patent Act, 1970 as “a grant or a right to exclude others from making, using or selling ones invention and includes right to license others to make, use or sell it”.
The Core of the issue:-
Many a time, drug companies to retain the huge profit and especially after 20 years of patent, try to add trivial molecules or take recourse to various methods which neither can be termed as an invention nor should lead to secondary patent. However, pharma companies have been able to do that, which can be termed as evergreening of patents.
Once a drug loses its patent, it becomes generic and the cost falls down as low as 80%, which is not in the interest of the pharma companies, hence they employ various means and methods to have the hold over patents.
Which acts against the general interest of the public as the drugs become beyond the reach of affordability for many.
India and Secondary Patents:-
Case Study:-The rejection of a secondary patent for Novartis’ Glivec, a crucial leukaemia cure, was famously upheld by the Supreme Court of India in 2013, while the same was granted in the U.S. Consequently, the cost of a monthly dose of the medicine in the U.S. was ₹1.6 lakh, while the cost of the generic was ₹11,100 in India.
Likewise, Spiriva, a medicine for asthma, enjoys patent protection until 2021 in the U.S., largely due to secondary patents. All of these secondary patents were rejected in India. As a result, while the monthly cost of the medicine in the U.S. is over ₹19,100, it costs a mere ₹250 in India.
The Indian Patent Office, has been rejecting secondary patents and thus making healthcare, expecially medicines affordable to many.
Secondary patents for several blockbuster medicines have been rejected by the IPO dramatically expanding access to medicines for important health problems such as cancer, AIDS, asthma and cardiovascular diseases.
None of this would have been possible without some remarkable innovations in Indian patent law.
To be deemed patentable, applications for secondary patents have to clear significant hurdles.
As per Section 2(1)(ja) of the Patents Act, the product in question must feature a technical advance over what came before that’s not obvious to a skilled person. Because secondary patents for pharmaceuticals are often sought for trivial variants, they typically fail to qualify as an invention.
Further, when a medicine is merely a variant of a known substance, Section 3(d) necessitates a demonstration of improvement in its therapeutic efficacy. The provision also bars patents for new uses and new properties of known substances. This additional requirement is unique to Indian law, and along with Section 2(1)(ja), ensures that bad patents stay out of the system.
It is found that secondary patents were rejected largely due to the stringent thresholds imposed by Sections 2(1)(ja) and 3(d).
Section 3(d) is not our only defence against secondary patents. It is complemented by other exceptions to patentability: Section 3(e) ensures that patents for combinations of known substances are allowed only if there is synergistic effect, while Section 3(i) ensures that no exclusivity can be claimed over methods of treatment.
Together, Sections 3(d), 3(e) and 3(i) have been instrumental in rejecting secondary patents.
These provisions also extend to biologics, the new big players in the therapeutics marketplace. More lucrative than small molecule medicines, biologics are no stranger to the lure of secondary patenting for extending patent terms. For instance, a quarter of the secondary patents for Humira, a biologic, are directed towards new uses and methods of treatment. Thanks to the provisions in the patent law, Humira enjoys no patent protection in India, since AbbVie restricted their Indian filings to only cover their secondary patents.
Blockbuster medicines are crucial to the success of public health. But they have been gamed, and rendered inaccessible to the people and governments who need them. In order for these medicines to be accessible, there can be no surer way than to enact strong standards that put bad patents where they belong.
Receive Daily Updates
Recent Posts
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.