However, 3(d) can block future Indian pharma product patents. Given the high research costs in investing in new chemical entities (new drugs), smarter Indian pharma companies are better off developing and seeking patents for new medical entities (demonstrable improvements of existing formulations). Section 3(d) can really complicate this strategy. And it is wrong to say this doesn’t matter for the paying public. Indian pharma companies that can claim patents by incrementally innovating MNC formulations will sell their drugs cheap. But these will be cheap, properly patented drugs — not cheap, patent law busting ones. Anyone who takes public policy seriously should see the difference.

They should also see that the question of affordable access to drugs is a matter of public policy, not patents per se. India spends 1 per cent of its GDP on public health — that’s a scandal bigger than anything an MNC can cook up. And of every rupee spent on public hospitals, only 15 paise are spent on buying drugs that are given free to patients. Surely this calls for furious activist action?

Of course, lifesaving drugs like Tarceva, priced as they are, will pose questions even in a vastly better public health system. There are sensible ways to tackle this.

First, there are provisions in the Indian patent law on local manufacturing. Typically, local manufacturing will bring down prices. These provisions however can’t be applied immediately after a patent is granted.

Second, suppose the price of a patented lifesaving drug is “too high”. Drug price control authorities can impose controls only on essential drugs — those most commonly used and for common ailments. But competition authorities can investigate the pharma company’s pricing structure. The WTO’s intellectual property rules explicitly allow for this. And under domestic law, competition authorities have suo motu powers to investigate pricing in any sector.

... contd.