Come year 2005, a catastrophe is set to hit the developing nations including India, experts warn, as the Trade Related Intellectual Property Rights agreement tightens its noose on the pharmaceutical sector and the governments retire to the role of an onlooker at the skyrocketing prices of essential drugs.
The transitional period of ten years given to the developing nations to conform to the TRIPs agreement ends on December 31, 2004, opening up the pharmaceutical sector to 'product patent' regime which gives exclusive rights to the inventor to use and sell his product, patented since 1995 for a period of 20 years.
Contrary to this, India had been following a system of 'process patent', which gave right to the domestic pharmaceutical companies to manufacture a product patented elsewhere by employing slighter changes in the process of manufacture which do not amount to infringement. This permitted the local companies to research and develop cheaper 'generic' variants of the original drug suiting the country's economic and internal needs.
"A series of mass suicides like those of farmers in the recent times will be triggered by the price rise," warns Vandana Shiva, a social activist working on intellectual property rights.
According to B C Kela, convenor of National Working Groups on Patent Laws, majority of Indians will not be able to afford these life-saving drugs. "Almost 80 per cent of the Indian population will be deprived of the latest life-saving drugs as the multinational companies, majority of them from the United States and Europe, invade the markets of the developing world with self-dictated prices and monopoly in marketing," he says.
Echoing his view, Gajanand Wakankar, executive director, Indian Drug Manufacturers Association says, "Today a rentidin antacid tablet costs 30 times more in US compared to
India. So one can have a rough idea on how the prices are going to soar."
Experts and officials are not aware of any study or estimate made by the government assessing the impact of product patent regime in health sector. "It is not yet clear what will be the quantum of medicines that will come under the regime," says the Drug Controller General of India, Ashwini Kumar.
However, experts roughly estimate the total number of drugs patented since 1995, as around 15-20 per cent of the market.
" But these medicines should be the latest and the most effective life saving ones offering an assured market potential. Otherwise why should the MNCs take pains to get them patented?" asks Wakankar.
According to a report published by the Organisation of Pharmaceutical Producers of India in 1994, the product patent proposal was brought into multilateral trade negotiations following the demand by the drug manufacturers of the US. They pointed out that research and development in pharmaceutical sector is highly risky and expensive.
As per their calculations made in '93 it took 12 years on an average for an experimental drug to reach a medicinal chest from a laboratory. Of about 10,000 substances examined only 20 enter animal studies, of which ten may reach clinical trial and one may get US Food and Drug Administration approval for marketing. The cost of developing a new drug was estimated to be around $300 million then.
To assure reasonable return of its investment the companies demanded a strong product patent system.
Another serious condition emerging due to the non-availability of life-saving medicines at affordable prices, as foreseen by experts will be the flooding of spurious or substandard drugs in the market.
"When prices run high and if there is a shortage to fill demand, possibility of such underhand practises cannot be ruled out," says Mira Shiva, coordinator, All India Drug Action Network, adding there could be another danger of self medication and usage of expired drugs by the poor illiterate majority of the nation.
Apart from the price rise, there is a threat of the decline of the domestic pharmaceutical sector itself, experts warn.
No research and development works could be carried out with regard to the patented drugs for a period of 20 years and this will certainly kill the growth of the domestic companies, both big and small," says Kela.
"In a monopolistic environment free of any competition to the MNCs, smaller companies could be wiped out, while the surviving ones could turn into traders of the MNCs," finds Mira Shiva.
Regarding the role of the government in mitigating the possible consequences and safeguarding public health, experts allege that what it has done yet is too inadequate.
"The government has brought about two amendments to the Indian Patents Act of 1970 and a third one which lapsed prior to last General Elections is about to be introduced shortly. But the main objective of the amendments was to conform the Act to the TRIPs agreement signed during the Uruguay Round of multilateral trade talks which ended in 1993," says Mira Shiva.
According to TRIPs there is so less a nation can do to control drugs prices, says Wakankar.
The government will have limited powers in issuing compulsory licensing permitted only in national emergencies and not for commercial use. In such situations the merits of each case will be heard by the patent holder, says the OPPI report.
But the TRIPs agrees for a compulsory licensing only in case of a 'national emergency' which is a very vaguely described term, opine experts.
"We are not yet certain how exactly it will work out," adds Kumar.
"In an emergency if the government asks the MNC to control prices, it can also withdraw the particular drug from the market depriving the medicine. In any case it will be a 'lose - lose situation' for the government" adds Wakankar.
Something which the government could have done was to ask for a review of the TRIPs agreement, presenting its case, says Mira Shiva.
According to the World Trade Organisation estimates made in 1995, after the implementation of the GATT agreement there will an annual rise of $510 billion in the world economy of which the European Union claims a share of $164 billion, US a share of $122 billion and the developing countries in total will recieve $100 billion. No calculation has been yet made on what will be India's share, says the OPPI report.