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DOHA DECLARATION: COMPULSORY

LICENSING AND ACCESS TO
DRUGS/MEDICINES

SUBMITTED BY:
ANJALI M
Enrollment no: A0814121010

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ABSTRACT

This research investigates and contrasts compulsory licensing requirements in India, shedding
insight on the causes for changes, particularly following trade-related aspects of intellectual
property rights (TRIPS) legislation. Compulsory licensing regulations in India, on the other
hand, have been criticized, notably on the international front. Without patents, inventors cannot
be fairly reimbursed for their research expenditures, nor can they be incentivized to do more
research in order to generate new and improved goods. Despite its clash with competition and
human rights legislation, patent protection is seen as a necessary evil.

Pharmaceutical corporations had a monopolistic right prior to the Doha Declaration. Many
nations were obliged to alter their patent rights for the purpose of compulsory licensing during
the Doha Conference on November 14, 2001. The rising expense of patented medications was a
major impediment to affordable medical availability.

Officials from the Department of Public Health viewed the Doha Declaration on Compulsory
Licensing as a positive step toward prioritizing public health above intellectual property rights.
Because emerging and least developed nations are unable to meet the requirements of their
citizens, it is vital to enhance the system of obligatory licensing. Compulsory licensing of patent
pharmaceuticals will provide financial benefits to patented pharmaceutical companies.

KEY WORDS: TRIPS, Compulsory Licensing, Patents

MATERIALS AND MEATHODS

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INTRODUCTION

One of the most controversial issues before the World Trade Organization (“WTO”) is the WTO
accession to the trade-related aspects of intellectual property rights (“TRIPS Agreement”,
“TRIPS” or “Agreement”). Compulsory and parallel licenses are considered acceptable targets
that do not violate the TRIPS Agreement. Developed countries, especially the United States and
Switzerland, argue that the only flexibility of TRIPS Agreement is the staggered implementation
periods that developing countries enjoy under the agreement.

The exclusive right to innovation is granted for 20 years to the person known as the patent owner
who invented a useful or new product or process. The patentee enjoyed a kind of exclusivity in,
which made him unable to use his invention. The Government rewards patentees in the form of
royalties for their efforts and skills to promote further research and innovation.

Research and development of pharmaceutical is a very expensive, unpredictable, and time-

consuming task. Therefore, the Intellectual Property Patent is an innovative pharmaceutical
company that prevents misuse of the patent and allows competitors to enter the generic market.
Essential for Research and development of drug patents gives the patentee exclusivity. R & D
will be reduced if the patentee is not properly compensated for the R & D costs required to
develop a new product. The patentee will be compensated by the government in the form of
royalties for Innovation for using innovation in the event of a compulsory license without the
permission of the patentee.

The United States has criticized the implementation of compulsory enforcement provisions
because the compulsory implementation policy reduces the usefulness of further research and
development. Individuals who make intellectual contributions to R & D activities must enjoy
exclusive patent rights. The monopoly rights granted to the inventor affect both human rights and
competition law. Therefore, ensuring fair use of monopoly rights requires an effective
mechanism, and the mandatory license is one such protection. Also, granting compulsory permits
to developing countries, on the one hand, can be the cheapest and beneficial to those in need, but
on the other hand, the companies that cause significant losses or create them. It may also put a
burden on you.

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However, looking at a different angle, by paying the royalty to the originator company and
issuing a compulsory license, it is possible to make money that could not be made in the
potential market due to the high price. I can say. This review paper addresses 's related issues and
analyzes aspects in which it may be beneficial to grant an inventor a compulsory license in the
case of a pharmaceutical company.

OBJECTIVES

The following were the objectives of the study:

1. To highlight the Doha Declaration and examine the relationship between the access to
drugs/Medicines and the employment of compulsory licensing.

2. To outline the Compulsory License regime in India in connection with Covid 19 Vaccine

3. To trace out whether the compulsory licenses for patent protected drugs is a necessary

measure, or a threat to innovation.

4. To draw conclusions towards grant of compulsory licenses and access to drugs and medicines

RESEARCH PROBLEM

This paper deals about the concept of Compulsory licensing and access to drugs and medicines
under the regime of Doha Declaration and to examine the licensing of Covid 19 Vaccine. Here
the outcome is to draw conclusion towards grand of compulsory licensing and access to drugs
and medicines.

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HYPOTHESIS

RESEARCH METHODOLOGY

The author has used the Doctoral method of study. It is a theoretical study that is untouched in its
essence. To carry out this study, the author relied on secondary sources of information.
Numerous statical reports, various studies carried out by various organizations, legislations, and
e sources were used as method for the study.

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Chapter 1:

Compulsory Licensing and access to medicines

What is a Compulsory Licensing?

Compulsory licenses are those granted by the government to third parties for the manufacture,
use, and sale of a medicine or a procedure that has been created and patented without the
approval of the patent holder.

Origin of Compulsory License in India

The Indian government realized the need for a patent regime after independence. The
Government of India convened the Tek Chand Committee, often known as the Bakshi Report
1950, around the end of 1948 to examine the pre-existing Indian patent rules in order to improve
the patent system. The first modification to the Indian Patent Act 1970 was made in 1999, and
additional amendments were made in 2002 and 2005. The third amendment to the Indian Patent
Act of 1970 investigated the evolution of mandatory licensing. Following the expiration of the
three-year patent period, an application under section 84 (1) to the patent controller after expiry
of patent period which shall be three years from the date of the sealing of innovation on patent
and on the following grounds -

1. If affordable necessities of general public have not been fulfilled,

2. If innovation on patent is not worked within the territory of India,

3. If the patent invention is not accessible to the general public at an economic price.

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Access to the medicines and compulsory licensing

Pharmaceutical firms that do research produce, manufacture, and distribute drugs that help
people live longer and healthier lives. EFPIAs1 member businesses are dedicated to increasing
access to and affordability of these life-saving medications. All countries, particularly poor
countries, share the objective of expanding access to healthcare in a sustainable fashion,
according to EFPIA members. This, however, necessitates the cooperation of a wide range of
players, particularly in low-income and least-developed nations. Over the last few decades,
businesses have responded to access difficulties by introducing a variety of innovative and long-
lasting strategies, such as donation programmes, technology transfer, and voluntary licensing,
no-assertion declarations, and differential pricing.

The Doha Ministerial Declaration on the TRIPS Agreement and Public Health, issued in 2001,
emphasizes the significance of interpreting and implementing the TRIPS Agreement in a way
that promotes both access to existing medications and the development of new ones.

The Doha Declaration goes on to explain how TRIPS "flexibilities," such as compulsory
licenses, should be interpreted in order to achieve this two-pronged goal, recognizing that a
stable and predictable intellectual property system is important not only for the development of
new medicines, but also for technology transfers and negotiated access mechanisms.

Although compulsory licensing is a recognized component of the IP system, it should be utilized

in a balanced manner and not as a replacement for a long-term, appropriately funded strategy on
access to medicines. Increased dependence on compulsory licensing jeopardizes long-term
approaches to medical access and innovation incentives, particularly intellectual property rights:
The efficacy of IP rights is a critical component of these nations' long-term economic success
and a significant incentive to research new medications.

1
EFPIA stands for European Federation of Pharmaceutical Industries and Association

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Chapter 2:

THE DOHA DECLARATION AND THE PARAGRAPH 6 DECISION:

A CONCISE EXPLANATION

A compulsory license is a legal mechanism through which a government provides itself or a third
party the right to make or import a patented goods without the permission of the patent holder or
right holder (both of whom are referred to as the "right holder" in this context). 2 Their issuing is
subject to specific circumstances. Article 31 of the TRIPS Agreement lays forth an obligatory set
of criteria for WTO members. Other, additional criteria impacting the issue of obligatory licenses
may also be included in a country's domestic legislation.

Among the conditions set out in Article 31 of the TRIPS Agreement, the following are especially
relevant in the context of the Paragraph 6 Decision:

• the grantee must first have made efforts, for a reasonable time, to negotiate authorization from
the right holder on “reasonable commercial terms and conditions” (Art. 31(b)

• Members may dispense with this requirement, however, in the case of a “national emergency,
other circumstances of extreme urgency, or public non-commercial use” (Art. 31(b)

• the use authorized by the compulsory license must be “predominantly for the supply of the
domestic market” (Art. 31(f)),11 and

• adequate remuneration must be paid to the right holder (Art. 31(h)3

As part of the commencement of a new multilateral work programme of trade policy reform and
liberalization at the WTO's Ministerial Conference in Doha, Qatar, all WTO Members agreed on
the applicability of the TRIPS Agreement to public goods. This Declaration provides key aspects
for the interpretation and execution of TRIPS Agreement Article 31.

2
The World Bank (Yolanda Tayler, ed.), Battling AIDS: A Decision-Maker’s
Guide to the Procurement of Medicines and Related Supplies at 119 et seq. (World Bank 2004)
3
Adequate remuneration” is defined with respect to the circumstances of each case, “considering
the economic value of the authorization

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The Doha Declaration then clarifies in paragraph 5 that "these flexibilities include:

• The authority to award compulsory licenses and the ability to decide the conditions on which
such licenses are given.

• The right to determine what constitutes a national emergency or other circumstances of extreme
urgency, with the understanding that public health crises, such as those associated with
HIV/AIDS, tuberculosis, malaria, and other epidemics, can constitute a national emergency or
other circumstances of extreme urgency.

Paragraph 6: A Problem Left Unresolved4

The Doha Declaration left a significant issue unanswered. It acknowledged that "WTO Members
with insufficient or no manufacturing capacities in the pharmaceutical sector may face
difficulties in making effective use of compulsory licensing under the TRIPS Agreement," and
the Ministers charged the TRIPS Council with finding an "emergency solution" to the problem
(Doha Declaration, paragraph 6).

If a developing nation lacks the industrial ability to produce a certain pharmaceutical under a
required license, or if it has inadequate capacity, it must import the drug. However, if it desires to
import a generic medication manufactured under obligatory licensing, the amount of product
accessible for export is limited by the "primarily for domestic market supply" provision in
paragraph (f) of Article 31 of the TRIPS Agreement.

Countries like India and Brazil, which have a domestic generics industry, constitute by
themselves large markets, and hence the “non-predominant part” of production authorized under
a compulsory license could still be substantial5

4
This section and the following draw on Rudolf V. Van Puymbroeck, Exportation of Drugs under
Compulsory Licenses: The WTO Decision on Implementation of Paragraph 6 of the Doha Declaration on
the Trips Agreement and Public Health, available at
http://www1.worldbank.org/hiv_aids/docs/GHAPnote10.03.03.pdf.
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The TRIPS Agreement patent regime became applicable to India as of January 1, 2005. Brazil amended
its law to provide for pharmaceutical product patent protection effective May 15, 1997.

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The paragraph 6 Decision also have no effect on any exports of that non-predominant portion.
That amount, however, may not be adequate to meet all demands if many developing nations
begin importing such pharmaceuticals in substantial amounts, which looks to be almost
unavoidable given the rising need to provide access to important medicines.

The Decision in Paragraph 6

Finding a solution to this problem was not easy. After nearly two years of hard negotiations, a
compromise acceptable to the industrialized and to the developing countries was finally achieved
and adopted as a decision of the WTO’s General Council.6

The Decision is couched in the form of the waiver of two provisions of Article 31 of the TRIPS
Agreement: (a) with respect to the exporting country, a waiver of the predominantly-for-the-
domestic-market limitation; and (b) with respect to the importing country, a waiver of the
adequate remuneration requirement. There is also a specific waiver of the former of these
provisions, together with certain other flexibilities, for certain regional trade arrangements.

Chapter 3: Compulsory licensing an important tool to promote public health

Jurisdictional analysis

1. India

Indian Patent Office had issued first compulsory license in year 2012 to pharmaceutical company
named Bayer Corporation for innovation on cancer drug named Sorafenib Tosylate (Nexavar),
which authorized NATCO a domestic generic medicine producer which also produced a low-cost
version of the drug for two reasons mentioned below:

a) Production of generic version of medicine by NATCO, a domestic generic company over

Bayer Corporation named Nexavar that would be cost effective than the patented medicine

and thus reducing monopoly over the drug in the Indian market.’

b) “It may give an opportunity to other Indian generic drug manufacturer, if the innovator
6
The General Council, which is composed of representatives of all WTO member countries, exercises the functions
of the Ministerial Council when the latter is not in session, as well as other functions assigned to it under the WTO
Agreement

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pharmaceuticals fail to supply patented medicine in large quantities at affordable prices.”

Lee Pharma Limited vs. Lee Pharmaceuticals7

“In June 2015, Lee Pharma filed an application for seeking the grant of a compulsory licence for

manufacturing and selling the drug Saxagliptin used in the treatment of type-II diabetes mellitus.

Saxagliptin is patented by Bristol Myers Squibb and marketed by AstraZeneca in India. The

Controller rejected the application mentioning that applicant failed to satisfy any of the grounds

as specified in the section 84(1) of the Act

Grant of compulsory license under section 84 due to unaffordable prices and non-working
of patented article

Compulsory licensing is granted in following conditions

1) Prevent the patent abuse as a monopoly.

2) Commercial use of the patented inventions by an interested person.

3) To address the access of public health concern in India.

Grounds for Compulsory License Issue

Compulsory License is issued under following circumstances: -

1) Bayer Corporations Ltd failed to meet the general public need with reference to the patent

invention and at the reasonably affordable price

Bayer Corporations Ltd. failed to fulfill the public requirements regarding the drug access

at the reasonably affordable price. Natco Company Ltd. on July 29, 2011, filed an application

for issue of Compulsory License to the Controller of Patent in India for the manufacturing and

sale of the generic version of patented medicine in India by its own brand named at price less

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than Rupee ten thousand per month therapy against Bayer Corporations Ltd. who charged

Rs.2, 80,428/- for one month therapy. The term affordable means general public purchasing

power for the medicine. Division Bench of Bombay High Court held that Pharmaceutical

Company Bayer Corporations Ltd. did not adhere to the reasonably affordable price policy.

2) Patented drug of Bayer Corporations Ltd (Nexavar) was not in the territory of India

Under Article 27 of TRIPS, Bayer Corporations Ltd. argued that there can be no discrimination

for the patented medicines, manufactured or imported. Division Bench of Bombay High Court

held that patent holder must perform some efforts for manufacturing of the drug in India. An

argument was made by Bayer Corporation Ltd. that the Compulsory license granted to Natco

Pharmaceutical Company was against the conditions mentioned under Section 90. Adequate

remuneration will be provided to the patent holder while granting voluntary license which

is mentioned under TRIPS Agreement under Article No 31. Decision made on 9 March 2012

provided that 6 per cent royalty was paid of total sales made paid by Natco Company Ltd.

and reasons for fixing 6 per cent royalty was that the petitioner failed to show the evidence

for the cost incurred on inventions. Normal rate of royalty should be 4 per cent as per United

Nation Development Programme recommendations and by patent controller this royalty was

again adjusted to 6 per cent of the net sale. Further Tribunal has increased the royalty by 1

per cent i.e. up to 7 per cent of net sales made by Natco Company Ltd. The petitioner failed to

show in what manner the royalty was fixed at 7 per cent

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Chapter 4: Compulsory licensing and Covid 19 Vaccine

The use of a patent without the permission of the patent holder is referred to as compulsory
licensing. The TRIPS Agreement, signed concurrently with the founding of the World Trade
Organization (WTO) in 1994, attempted to establish a worldwide intellectual property rights
framework that would standardize legal norms among WTO member nations. Prior to the TRIPS
Agreement, several nations prohibited pharmaceutical goods from being patented in order to
keep medicine prices low.

Prior to the TRIPS Agreement, India, and Brazil, for instance, permitted only process patents and
not product patents. This enabled domestic generic pharmaceutical businesses to reverse-
engineer and manufacture bioequivalent medications at low cost.

The TRIPS Agreement, on the other hand, gives countries some leeway in regulating patents for
public goods such as pharmaceuticals. The Doha Declaration on the TRIPS Agreement and
Public Health, announced in November 2001, underlines a crucial flexibility granted to
governments under TRIPS Article 31 - the authority to give compulsory licenses. According to
Clause 5(c), "public health crises, including those related to HIV/AIDS, TB, malaria, and other
epidemics," might constitute "a national emergency or other conditions of exceptional urgency."

Big Pharma' companies such as Gilead and Merck have offered Indian pharmaceutical businesses
voluntary patent licenses for their patented treatments for ailments ranging from HIV to hepatitis
to diabetes. It is up to the Indian government's negotiating abilities to persuade international
patent holders

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Covaxin is the only vaccine developed under the "Indian" Intellectual Property (‘IP’) rights
regime. Covishield, is the IP of AstraZeneca sub-licensed by SII. AstraZeneca is a British-
Swedish company that itself has an exclusive license of the IP from Oxford University8

BIBLIOGRAPHY

1. A wider access to patented drugs under the TRIPS agreement by Haochen Sun
Boston University International Law Journal, Volume 21:101
2. Jain T (2009) Compulsory licenses under TRIPS and its obligation for member countries.
In Reddy J (Ed) Compulsory licensing Developing Economies (pp 26-63) Hyderabad
ICFAI press

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The case of compulsory licensing by V. Venkateshwara Rao Published: 01 May 2021, 7:00 PM

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