The Indian pharmaceutical industry is significantly influenced by price controls and the patent regime. The National Pharmaceutical Pricing Authority (NPPA) in accordance with the Drug Price Control Order (DPCO) controls prices of many pharmaceutical drugs. The Indian Patents Act, 1970, on the other hand, provides for process patents. Come 2005 and India will have to allow product patents, as it is a signatory to WTO guidelines dealing with the protection of intellectual property.
As a step in this direction, the Indian government recently passed The Patents (Second Amendment) Amendment Bill, 1999. This bill though provided for acceptance of product patents, the same would be processed only after 1st January 2005, since India has a ten-year transition period for the introduction of product patents. Until then, Exclusive Marketing Rights (EMR) would be granted to such products. In this context, let us examine the various regulatory provisions relating to EMR.
EMR gives the holder exclusive rights to sell or distribute the drug or medicine for a period of five years or till the grant of patent or the date of rejection of application for the grant of patent, whichever is earlier. EMR thus provides a legal safeguard from generics to the company introducing a product in the market.
EMR can be granted to an applicant if he has already filed an application for the product patent after 1st January 1995 in any of the convention countries (i.e. a country with which India has a reciprocal agreement for dealing in patent applications). EMR can also be granted if the applicant has made an application in India for a process patent of the drug after 1st January 1995. Moreover, even if the applicant has obtained a marketing approval for the drug and the drug controller has not rejected his patent application, EMR application can be granted.
However, if two years after the grant of EMR, anyone challenges and proves that the product for which EMR has been obtained has failed to fulfill its social duties or is not being reasonably priced, the drug controller may order the transfer of EMR license to the challenger. The drug controller can also revoke the EMR in public interest.
There is an apprehension in the industry that with the introduction of EMR, many readily available drugs will come under the purview of EMR and consequently their prices will increase. However, this is not correct. EMR is granted only for those drugs for which patent application has been filed after 1st January 1995. Moreover, it takes atleast 8 – 10 years for the drug to reach the market after it is patented. Hence, at the earliest, EMR applications will only be filed during the period 2003 – 2004. Therefore, not many drugs are likely to be introduced through the EMR route.
Yet, EMR is a step forward in India’s obligation of complying with the WTO regulation of providing product patents by 1st January 2005. It has demonstrated India’s commitment in fulfilling its duty towards WTO regulations. However, the amended Act has still fallen short of providing product patent and hence another amendment to The Patents Act will have to be made for the introduction of the product patent regime.