Centre Sees No Compulsion to Issue Compulsory Licenses for Covid Drugs

May 2021 has been an interesting month so far for compulsory licenses. First the Supreme Court inquired about the Government’s position on issuing CLs for COVID-19 related drugs and vaccines, then Natco filed an application requesting a compulsory license for Baricitinib. This is followed by Delhi HC’s interim order, where it too hinted that the Central government could explore the alternative of compulsory licensing. Even on the international front, one of the major opponents of the compulsory license mechanism- the USA, has recognized the right of other Members to issue compulsory license in its notorious Special 301 Report (See page 34). However, amidst all this, the Central government in an affidavit filed before the Supreme Court in the above matter, seemed skeptical in making a call on compulsory license. Notably, the government in the affidavit maintained that :-

“44….The main constraint is in availability of raw materials and essential inputs. Therefore, any additional permissions and licenses may not result in increased production immediately. It is difficult to predict the trend of the pandemic and therefore difficult to forecast the demand for Remdesivir with a reasonable degree of certainty. However, such permissions will build capacities to effectively handle any future crises.

45. It is presumptuous to assume that the patent holder will not agree to more voluntary licenses for such manufacturers who have a new drug manufacturing permission from the DCGI. However, if such a manufacturer applies for a compulsory license under section 92, the same may be suitably considered by the DoC.”

In explaining how it plans to ensure that accessibility to medicines improve, the government stated that-

47. …… When there is a surge in cases and in demand of patented medicines/drugs/vaccines from all over the world the solution needs to be found out essentially at an executive level engaging at diplomatic levels. Any exercise of statutory powers either under the patents act 1970 read with TRIPS agreement and Doha declaration or in any other way can only prove to be counter-productive at this stage, the central government is very actively engaging itself with global organisations at a diplomatic level to find out a solution in the best possible interest of India. It is earnestly urged that any discussion or a mention of exercise of statutory powers either for essential drugs or vaccines having patent issues would have serious, severe and unintended adverse consequences in the countries efforts being made on global platform using all its resources, good-will and good-offices though diplomatic and other channels. 

Regardless of whether one agrees with the government’s position, the larger question of why the divergence between international appearances and domestic reality is one that continues to loom. Readers may recall that India is one of the original Members that has argued IPRs as an encumbrance in accessing essential medicines and proposed for waiving key provisions of the TRIPS agreement. One of the main reasons for the proposal is the  pressure built by developed Members against using TRIPS flexibilities like compulsory license. Seemingly, the positions of the parties now appear to have been switched. Where the US is supporting the right to issue compulsory licenses and India is instead relying on voluntary cooperation of the IP holders (see para. 45 above). Perhaps this is an outcome of the verbal assurance by India to USIBC against using compulsory license for pharmaceutical products? However, with the US itself supporting use of this flexibility it seems perplexing what is holding the nation back from resorting to compulsory licenses. 

As a side note, in relation to the previous post which mentioned that Natco had filed a Compulsory Licence application – Eli Lilly has now signed voluntary licences with Sun, Cipla, and Lupin, perhaps giving the government a way out of granting the CL application. 

While the temptation of letting voluntary negotiations is understandable and there are fair share of arguments for (see here and here) and against (see here and here)  viability of compulsory license to ramp up production of COVID-19 treatment, the larger question is why is the government not being consistent on its position and taking a clear call on what it thinks is the best way forward for quick access to Covid drugs and vaccines?