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A proposal to further extend the already 20-year-long patent term for pharmaceuticals is on the negotiation table of the Regional Comprehensive Economic Partnership (RCEP). As India negotiates the RCEP, a free trade agreement that can change the intellectual property (IP) landscape of its member countries, this week, we need to look closely at the proposal in the broader context of how the term of protection for IP rights has increased steadily over the years. More so for the generic pharmaceutical companies in India that manufacture patented drugs after the expiry of the patent term. Any extension of the patent term will adversely affect access to the cheaper medicines that they manufacture.
A patent is an exclusive right granted for an invention which is new, useful, and non-obvious.
In developed countries, IP protections incentivise individuals for their creativity and public disclosure of technical information, which aid the promotion of new knowledge and increased innovation.
In several developing countries, IP protection was either introduced through colonial-era laws or when they joined the World Trade Organisation (WTO), of which the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is a part.
Patents are now granted for inventions across technologies—from kitchenware to biologics—each having the same term of protection. The protection grants the applicant a right to exclude others for a 20-year period—the length of a patent. After this period, it enters the public domain and can then be accessed and used by anyone.
Term of exclusivity
The term of a patent is a maximum time period during which it is valid and can be enforced. The longer the patent term, the greater the exclusivity for the invention and the greater the time taken for the technology covered by the patent to enter the public domain, thereby creating a technological lock-in.
A patent could have a shorter term than the specified 20-year period for a variety of reasons: A challenge to a patent may result in its early invalidation, and non-payment of renewal fees could result in its lapse.
Historically, the Crown in the UK granted patent-like privileges for a 14-year period, as it usually took seven years each to train two apprentices in a new technology that came from continental Europe through migrants. Thus, the UK capped the term of a patent at 14 years.
Despite the influence of Common Law, many erstwhile colonies legislated shorter terms of protection after independence. For instance, India had a five- to seven-year patent term for pharmaceuticals before becoming a member of the WTO.
The present 20-year patent term was mandated by the TRIPS agreement. Though there was some logic in English Law as to how it arrived at the 14-year patent term, the present patent term that countries agreed to during the TRIPS negotiations did not have any sound logic other than protecting the interests of particular industries.
Technology-agnostic term
The common term of protection that applies to all technologies regardless of the pace of technological development came from a provision of the TRIPS agreement. However, in some sectors like information technology and electronics, where technology is ever-changing, granting 20-year protection does not make sense.
In industries where prices gradually decrease within the first few years of the introduction of the new technology, such an extensive period of protection without an economic basis is unwarranted. Moreover, having a technology-agnostic patent term creates an unnecessary deadweight loss where a shorter protection is required for an invention.
Thus, considering the evolving nature of technology, it is imperative to have a technology-specific patent term—differential period of protection across different industries, so as to foster knowledge and innovation in the market.
Copyright, the other form of IP right that protects artistic and literary works, went through a similar phase in the US, where the term was extended just to prolong market exclusivity. Lobbying by the entertainment industry to keep Mickey Mouse, an artistic work, from falling into the public domain resulted in the extension of copyright term for corporate authorship to its present term of 95 years from first publication or 120 years from creation. In contrast, the term of a copyright in India for similar works is 60 years from publication.
Patent-term extension
Developed countries, on behalf of their pharmaceutical companies, seek a term extension arguing that it is necessary to recoup the research and development (R&D) costs. The proponents also argue that patent-term extension could make up for the loss of effective patent term—time lost in getting regulatory approval or owing to delays at the patent office.
However, these arguments are untenable. Consistently, major pharmaceutical companies report profits that are many times more than the costs involved in R&D. Any further extension in the term of the patent will result in corporate welfare at the cost of social welfare.
Given India’s strength as a world-class supplier of affordable generic medicines, granting a longer term for patents will result in delays in the entry of generic versions and could adversely affect access to medicines.
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In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)