Updated on 26 October 2012
India amended its Patents Act in 2005. "(Provision of ) Compulsory license was in place even before that, but it was never used," points out Mr K V Balasubramanian, managing director, Indian Immunologicals, Hyderabad. "For any society where people are unable to meet their daily requirements, compulsory licensing will bring in cheer as the healthcare costs are beyond their reach. India granted its first ever compulsory license to Natco Pharma only this year. Thailand and many developing nations have already granted compulsory licensing to overcome the monopoly in the market. If I am not wrong, even developed nation such as Canada has used compulsory licensing earlier."
Dr Ajay Kumar Sharma, associate director - Pharma & Biotech, Healthcare Practice, Frost & Sullivan, South Asia & Middle East, calls compulsory licensing "a double edged sword". "It helps the patented products to become more affordable and accessible in order to save lives, thus helping the society at large. But if one has to analyze, in the long run it deprives the innovator companies from making money, which they would have invested in discovering this successful drug and many unsuccessful trials. Also this money helps them to generate a surplus amount for funding future research, which can be of immense use to mankind to fight newer disease challenges."
Dr Sharma says by "awarding compulsory licenses (on impulse), we are destroying this natural market equilibrium". "Hence, the best way in such case would be that the government chips in by providing these essential medicines at subsidized rates to people rather than destroying the market equilibrium under the guise of compulsory licensing," he adds.
Ms Sunita K Sreedharan, partner, SKS Law Associates, New Delhi, points out that in areas such as healthcare "patented inventions appear to evoke high emotional content". "In case of epidemics, the Patents Act provides for government intervention. In a routine system, the Drug Price Control Order can be used to control prices without resorting to the grant of compulsory licensing. Similarly, companies holding the patent can be encouraged to make the patented drugs available to the afflicted patients belonging to the poorer sections of the society through corporate social responsibility programs to be implemented with a certain time period failing which the compulsory licensing can be granted," she says.
Echoing similar sentiments, Mr K V Balasubramanian of Indian Immunologicals, says the governing agency should issue compulsory licensing after proper examination and considering many aspects such as need, urgency and affordability. "Otherwise, decisions based on only technical aspects will open up the matter for a debate. A core committee comprising the Ministry of Health and scientists from different backgrounds should take the decision based upon situations and need instead of the patent office judging the case purely on technical matters. Then only it will serve the purpose of granting compulsory license to improve access of essential medicines," he says.