[Ip-health] Frontline: Batting for MNCs - Dinesh Abrol

[Achal Prabhala]

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Batting for MNCs
DINESH ABROL


      Plagiarism was not the most important charge against the Mashelkar re=
port; it was its bias towards MNCs that was most shocking.




THE report of the Technical Expert Group on Patent Law Issues is currently =
in the eye of a storm. This group was set up by the government on April 5, =
2005, under the direction of Parliament in order to examine whether India s=
hould limit the grant of patents to new chemical entities (NCEs) and define=
 micro-organisms to exclude genes/gene-constructs from patent protection. I=
t was also meant to suggest how this could be done without violating the Ag=
reement on Trade Related Aspects of Intellectual Property Rights (TRIPS) of=
 the World Trade Organisation (WTO). Dr. R.A. Mashelkar, who chaired this g=
roup and submitted the report, is a highly embarrassed man because some of =
its important conclusions have been criticised for being literally copied f=
rom a paper prepared by Shamnad Basheer, Associate of Oxford Intellectual P=
roperty Research Centre.

This criticism was first made in an article published in The Hindu on Febru=
ary 12, 2007, by Chan Park of the Lawyers Collective HIV/AIDS Unit and Acha=
l Prabhala, a researcher on intellectual property rights. They refer to the=
 issue of plagiarism to show how the report, essentially, copied its major =
conclusions from a work that INTERPAT, a Swiss pharmaceutical lobby group o=
f multinationals, had sponsored.

Mashelkar's stated claim was that the "technical inaccuracy" was very unfor=
tunate and was basically in terms of the failure to acknowledge the source =
of eight to 10 lines that were taken verbatim from Basheer's paper. If he i=
s to be believed, this error crept in inadvertently at the hands of a sub-g=
roup that the committee had created for drafting the report. Mashelkar resp=
onded to the criticism from all over the world by withdrawing the report an=
d sought three months' time from the government to resubmit it.

Multinational connection


The charge of plagiarism is not the only serious allegation against the Mas=
helkar Committee. The recommendations of the report are also influenced by =
its multinational connection: Ranjit Shahani, vice-chairman and managing di=
rector of Novartis India Limited, chairs INTERPAT, India, and is also the e=
lected president of the Organisation of Pharmaceutical Producers of India (=
OPPI), which advocated the acceptance of the TRIPS proposals.

The Mashelkar Committee's connection with multinational corporations (MNCs)=
, including Novartis India, is perhaps evident from the fact that Novartis =
could benefit directly from the recommendations of the report. Currently, t=
his company is fighting a case in the Madras High Court over the `patentabi=
lity' of its "new" salt used in the treatment of cancer. The case is of int=
erest to small and medium Indian companies and cancer patients who have opp=
osed Novartis' patent application for Gleevec, an essential medicine for th=
e treatment of leukaemia. If Novartis is granted the patent for it, the pri=
ce of the medicine could increase. The same drug sold by Indian companies i=
s about 10 times cheaper than Novartis' Gleevec in the Indian market.

Misplaced interest


Experts consider the patent application filed by Novartis to be an importan=
t example of one of the many possible ways of `evergreening' of patents. Th=
is court case effectively challenges the legal validity of Indian companies=
' right to produce the drug. Novartis has even challenged the government on=
 the validity of Section 3(d) of the Patents (Amendment) Act, 2005. It clai=
ms that the provisions of this law are TRIPS incompatible. Shockingly, the =
Mashelkar Committee report, in Para 5.11, endorses this view, tangentially.=
 The issue of the legal validity of the provisions of the Patents (Amendmen=
t) Act, 2005, was not part of the Committee's terms of reference.



Going by the spirit of the deliberations in Parliament, the Committee's man=
date was to suggest ways by which India would be able to further strengthen=
 the Patents (Amendment) Act, 2005. The Committee was asked to suggest stra=
tegies to prevent multinational companies from making use of the `evergreen=
ing' possibilities available to them under the current patents law. The Mas=
helkar Committee did the opposite: it tried to pass off the interests of MN=
Cs and select Indian corporations (such as Ranbaxy and Nicholos Piramal) as=
 the national interest.

The Committee concluded:

1. "[I]t would not be TRIPS compliant to limit granting of patents for phar=
maceutical substance to new chemical entities";

2. "excluding micro-organisms per se from patent protection would be violat=
ive of the TRIPS Agreement";

3. "limiting grant of patents to new chemical entities will not be conduciv=
e to competitive growth and incremental innovations are sequential developm=
ents that build on the original patented product - and therefore, such incr=
emental innovations ought to be encouraged by the Indian patent regime";

4. "with an enabling provision for protection of intellectual property in b=
io-technological innovations and inventions provided through the provision =
of patentability of micro-organisms, the Indian biotechnological research w=
ould be enabled to compete globally, attract collaborations, FDI, contract =
R&D etc".

The Committee's conclusions were biased; its analysis was thin and presente=
d without cogent arguments. The conclusions were not even based on the clar=
ifications provided in the Doha Declaration on TRIPS Agreement and Public H=
ealth. This declaration clearly affirms that "the Agreement (TRIPS) can and=
 should be interpreted and implemented in a manner supportive of WTO member=
s' right to protect public health and, in particular, to promote access to =
medicines for all".



The Mashelkar Committee conveniently ignored the recommendations of the 200=
2 study entitled "Integrating Intellectual Property Rights and Development =
Policy" produced by United Kingdom Commission on Intellectual Property Righ=
ts, an authoritative international group. It also ignored the conclusions r=
eached by the World Health Organisation (WHO) Commission on Intellectual Pr=
operty Rights, Innovation and Public Health in its 2006 report.

Both these international bodies have unambiguously clarified that "since th=
ere is no definition of invention in the TRIPS Agreement, developing countr=
ies may determine in their own ways, the definition of an invention, the cr=
iteria for judging patentability, the rights conferred on patent owners and=
 what exceptions to patentability are permitted".

In fact, the U.K. Commission specifically recommends that developing countr=
ies should aim at "limiting the scope of subject matter that can be patente=
d". Mashelkar was himself a member of the U.K. Commission. Furthermore, the=
 Pharmaceutical Research and Development Committee (PRDC), which produced i=
ts report in 2001 and was chaired by Mashelkar, also recommended that "phar=
maceutical patents should be granted only for new chemical entities or new =
medical entities".

The Mashelkar Committee's report was full of quotes from laws of developed =
nations on the patenting of pharmaceutical inventions and micro-organisms. =
It had no analysis of the political economy of these laws and was hardly co=
ncerned about their lessons for the interests of India. It ignored the view=
s of not only public interest groups but also of the Indian Pharmaceutical =
Alliance (IPA) and the Indian Drug Manufacturers Association (IDMA), the tw=
o most important groups of the Indian drug industry.

The Committee's report indicated that it was in the national interest to al=
low incremental innovations since in-house capabilities of the Indian drug =
industry were limited. It reached this conclusion on the basis of the exami=
nation of international patents filed by selected Indian companies. It igno=
red the fact that patents law was territorial in nature and had to be in li=
ne with both the stage of development of the industry and the socio-economi=
c conditions of the nation. Interestingly, Shamnad Basheer himself states: =
"The key failing of the Committee is not engaging with the tough policy iss=
ues. The conclusions may be correct, but there is much to be said for the m=
anner in which they were arrived at."

The issue of the cost of drug research appeared only once, indirectly, in t=
he report; the Committee was sceptical of the capacity of Indian companies =
to raise investments for the development of NCEs. The Committee noted: "Dru=
g discovery research is still finding its feet in India. Though many compan=
ies are investing, it will at least be a decade before a critical mass is i=
n place and results start accruing. Thus, restricting patentability to just=
 NCEs would mean that most of the pharmaceutical product patents would be o=
wned by MNCs." But it did not address the obvious question: would MNCs not =
be successful in owning the largest number of incremental pharmaceutical pr=
oduct patents too?

The Committee did not even consider possible alternatives within the framew=
ork of the TRIPS Agreement on the issue of patentability of incremental inn=
ovations. It would be in the interests of both the public and the Indian in=
dustry to design a patents law that would protect only "new drugs" (NCEs) u=
nder the provision of product patents and use the provision of process pate=
nts to protect the remaining incremental pharmaceutical innovations. In thi=
s way, it would still be possible, in a manner compatible with TRIPS, to us=
e the provisions of "dependent" non-voluntary or compulsory licences for th=
e introduction of even those new drugs that are still under product patents=
. Indian companies would still be required to use the Patents Act as an ins=
trument of balanced competition, involving less litigation. If Section 3(d)=
 of the current Act, which spells out what is not patentable in the drug in=
dustry, is retained in such a law, it will need to include additional safeg=
uards of clinical superiority. This strategy would encourage the Indian dru=
g industry to develop as a complete value chain, allow the national innovat=
ion system to become more oriented to the domestic market and encourage pub=
lic sector research-and-development (R&D) organisations to undertake more w=
ork on neglected diseases.

The Mashelkar Committee did not distinguish between discrimination and diff=
erentiation. It cited Article 27.1 of the TRIPS Agreement to argue that it =
would be TRIPS incompatible to limit patentability to NCEs and that India c=
ould not exclude certain kind of "pharmaceutical inventions" from the scope=
 of patentable inventions. The Patents (Amendment) Act, 2005, excludes pate=
nting of inventions relating to atomic energy (Section 4) and in the area o=
f national security (Section 39) broadly if the invention is relevant for d=
efence purposes.

As for the problem of attracting foreign direct investment in contract R&D =
and the manufacture of bulk drugs, a good contract law that meets the requi=
rements of confidentiality would suffice. Already, India has been able to a=
ttract a lot of investment in contract R&D and also foreign direct investme=
nt; it can do so in the future, too, without strengthening the Patents Act =
in favour of MNCs.

Parliament might consider referring the matter of the Mashelkar Committee r=
eport to the Standing Committee of the Ministry of Commerce, instead of all=
owing Mashelkar to resubmit the report. That would put Parliament in a bett=
er position to work out the mechanisms of strengthening the patents regime =
and to address the issues raised here.

Dinesh Abrol is co-convener of the National Working Group on Patent Law and=
 a scientist with the National Institute of Science, Technology and Develop=
ment Studies of the Council of Scientific and Industrial Research.


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