Recently, Rare disease patients have approached the Karnataka High Court urging the government to invoke compulsory licensing provisions under the Indian Patents Act, 1970.

About Compulsory Licencing (CL)

• A Compulsory License (CL) is a government authorization allowing a third party to produce a patented product or process without the consent of the patent owner, typically in cases of public health emergencies, non-availability, or high costs.

International Legal Basis

• WTO’s TRIPS Agreement (Article 31): Permits member states to issue CLs under certain conditions without the consent of the patent holder.
• Doha Declaration on TRIPS and Public Health (2001): Reaffirms the rights of WTO members to protect public health and promote access to medicines for all.
  • Importantly, CL can be issued even when the patent is still valid.

Compulsory Licensing in India

• Legal Provision: Section 84 of the Indian Patents Act, 1970.
• Eligibility: Can be invoked after 3 years from the date of grant of the patent.
• Grounds for CL:
  • Public Interest: The reasonable requirements of the public are not being met.
  • Affordability: The patented invention is not available at a reasonably affordable price.
  • Availability: The patented invention is not being “worked” in the territory of India (i.e., not manufactured or made available in sufficient quantity).
• Process: A third party (not necessarily the government) can apply to the Controller General of Patents for a CL.
• Controller’s Discretion: While the Act provides guiding conditions, the Controller has final authority to grant or reject a CL, based on:
  • Nature of the invention.
  • Capacity of the applicant to use it effectively.
  • Potential benefit to the public.
• Ownership Retention: The patent holder retains ownership of the patent.
  • The licensee receives only limited rights to manufacture/use the invention.
  • The patent holder is entitled to reasonable compensation/royalties.
• Example: India’s compulsory licensing provision under the Patents Act has been used only once in two decades.
  • Natco Pharma received the first and only license in 2012 to manufacture Nexavar, a cancer drug patented by Bayer.

Reasons For Demand of Compulsory Licensing From Rare Disease Patients

• Drug Prices: Imported medicines such as Risdiplam (for Spinal Muscular Atrophy) and Trikafta (for Cystic Fibrosis) can cost up to ₹70 lakh for a three-month course.
  • Even cheaper generics from abroad remain unaffordable for most Indian families.
• Limitation of Government Fund: Under the Rare Diseases Policy 2021, financial support of up to Rs. 50 lakhs per patient is provided for the treatment at the notified Centres of Excellence (CoEs) for Rare Diseases. 
  • However, the limited corpus is exhausted swiftly, leaving patients stranded without access to life-saving therapies.
• Import Dependence: Families rely on social media to contact Indians abroad to bring medicines. 
  • This ad-hoc method is risky, unreliable, and not scalable for all patients.
• Delayed Market Entry: Some pharma companies, like Vertex Pharmaceuticals, obtain patents in India but do not register or sell the drug, thereby restricting access to life-saving medicines while retaining monopoly rights.

Issues Related to Compulsory Licensing

• Trade and Diplomatic Pressure:  Countries issuing CL may face backlash from developed nations and pharmaceutical lobbies (e.g., USTR placed India on the Priority Watch List after the Nexavar CL).
• Discouragement of Innovation: Patent holders argue that CL undermines R&D incentives and weakens the global IP regime.
  • Over-reliance on CL can deter voluntary licensing and foreign investment, with fears of its use for commercial gain.
• Complex Legal Procedures: Applying for and granting CL involves a lengthy, bureaucratic process, delaying timely access to critical drugs.
  • Despite being legally permitted, India has issued only one CL (Natco-Bayer case, 2012) due to political caution and institutional inertia.
• Limited Manufacturing Capacity: Not all local firms have the technical or infrastructural ability to produce patented drugs effectively after a CL is granted.
• Royalty and Compensation Disputes: Determining “reasonable remuneration” often leads to legal disputes, affecting the timely rollout of affordable alternatives.

Way Forward: Ensuring Access to Life-Saving Drugs for Rare Disease Patients

• Price Regulation & Generic Substitution
  • Enforce price caps on patented drugs under the National Pharmaceutical Pricing Authority (NPPA).
  • Encourage import and licensing of low-cost generics from trusted sources until local production scales up.
• Proactive Use of Compulsory Licensing (CL)
  • Government and courts should actively invoke Section 84 and Section 92 of the Patents Act in cases of extreme unaffordability and public health need, especially for Group 3 rare diseases.
• Increasing Financial Support for Patients
  • Expand financial assistance under the National Policy for Rare Diseases by:
    • Increasing the cap above ₹50 lakh, especially for Group 3 diseases.
    • Pooling CSR funds, crowdfunding platforms, and state contributions.
• Boosting Indigenous R&D and Drug Development
  • Scale up funding for the National Consortium for Research and Development of Therapeutics for Rare Diseases (NCRDTRD).
  • Incentivize academic institutions and start-ups to develop orphan drugs with fast-track trials and regulatory support.
• International Collaboration
  • Leverage South-South cooperation to share affordable therapeutic innovations among developing countries.
  • Negotiate patent pool agreements and join global initiatives like the Medicines Patent Pool (MPP).
• Judicial Sensitivity and Policy Alignment
• • Courts should interpret IP law with a rights-based approach, ensuring access to health is prioritized over profits.
  • Streamline legal processes through fast-track approval mechanisms for CL in rare disease cases. Align IP, health, and pharmaceutical policy under a coherent national framework.

Conclusion

A robust and compassionate approach, combining legal tools like compulsory licensing with policy reforms, manufacturing capability, and financial support, is essential to uphold the right to health for rare disease patients in India. 

• Government, judiciary, industry, and civil society must work in tandem to ensure equity, affordability, and access.

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