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Batting for MNCs

Print edition : Mar 23, 2007 T+T-
R.A. Mashelkar withdrew his report amid accusations that important conclusions in it were plagiarised.-P.V. SIVAKUMAR

R.A. Mashelkar withdrew his report amid accusations that important conclusions in it were plagiarised.-P.V. SIVAKUMAR

Plagiarism was not the most important charge against the Mashelkar report; it was its bias towards MNCs that was most shocking.

THE report of the Technical Expert Group on Patent Law Issues is currently in the eye of a storm. This group was set up by the government on April 5, 2005, under the direction of Parliament in order to examine whether India should limit the grant of patents to new chemical entities (NCEs) and define micro-organisms to exclude genes/gene-constructs from patent protection. It was also meant to suggest how this could be done without violating the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organisation (WTO). Dr. R.A. Mashelkar, who chaired this group and submitted the report, is a highly embarrassed man because some of its important conclusions have been criticised for being literally copied from a paper prepared by Shamnad Basheer, Associate of Oxford Intellectual Property Research Centre.

This criticism was first made in an article published in The Hindu on February 12, 2007, by Chan Park of the Lawyers Collective HIV/AIDS Unit and Achal Prabhala, a researcher on intellectual property rights. They refer to the issue of plagiarism to show how the report, essentially, copied its major conclusions from a work that INTERPAT, a Swiss pharmaceutical lobby group of multinationals, had sponsored.

Mashelkar's stated claim was that the "technical inaccuracy" was very unfortunate and was basically in terms of the failure to acknowledge the source of eight to 10 lines that were taken verbatim from Basheer's paper. If he is to be believed, this error crept in inadvertently at the hands of a sub-group that the committee had created for drafting the report. Mashelkar responded to the criticism from all over the world by withdrawing the report and sought three months' time from the government to resubmit it.

The charge of plagiarism is not the only serious allegation against the Mashelkar Committee. The recommendations of the report are also influenced by its multinational connection: Ranjit Shahani, vice-chairman and managing director of Novartis India Limited, chairs INTERPAT, India, and is also the elected president of the Organisation of Pharmaceutical Producers of India (OPPI), which advocated the acceptance of the TRIPS proposals.

The Mashelkar Committee's connection with multinational corporations (MNCs), including Novartis India, is perhaps evident from the fact that Novartis could benefit directly from the recommendations of the report. Currently, this company is fighting a case in the Madras High Court over the `patentability' of its "new" salt used in the treatment of cancer. The case is of interest to small and medium Indian companies and cancer patients who have opposed Novartis' patent application for Gleevec, an essential medicine for the treatment of leukaemia. If Novartis is granted the patent for it, the price of the medicine could increase. The same drug sold by Indian companies is about 10 times cheaper than Novartis' Gleevec in the Indian market.

Experts consider the patent application filed by Novartis to be an important example of one of the many possible ways of `evergreening' of patents. This court case effectively challenges the legal validity of Indian companies' right to produce the drug. Novartis has even challenged the government on the validity of Section 3(d) of the Patents (Amendment) Act, 2005. It claims that the provisions of this law are TRIPS incompatible. Shockingly, the Mashelkar Committee report, in Para 5.11, endorses this view, tangentially. The issue of the legal validity of the provisions of the Patents (Amendment) Act, 2005, was not part of the Committee's terms of reference.

Going by the spirit of the deliberations in Parliament, the Committee's mandate was to suggest ways by which India would be able to further strengthen the Patents (Amendment) Act, 2005. The Committee was asked to suggest strategies to prevent multinational companies from making use of the `evergreening' possibilities available to them under the current patents law. The Mashelkar Committee did the opposite: it tried to pass off the interests of MNCs and select Indian corporations (such as Ranbaxy and Nicholos Piramal) as the national interest.

The Committee concluded:

1. "[I]t would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to new chemical entities";

2. "excluding micro-organisms per se from patent protection would be violative of the TRIPS Agreement";

3. "limiting grant of patents to new chemical entities will not be conducive to competitive growth and incremental innovations are sequential developments that build on the original patented product - and therefore, such incremental innovations ought to be encouraged by the Indian patent regime";

4. "with an enabling provision for protection of intellectual property in bio-technological innovations and inventions provided through the provision of patentability of micro-organisms, the Indian biotechnological research would be enabled to compete globally, attract collaborations, FDI, contract R&D etc".

The Committee's conclusions were biased; its analysis was thin and presented without cogent arguments. The conclusions were not even based on the clarifications provided in the Doha Declaration on TRIPS Agreement and Public Health. This declaration clearly affirms that "the Agreement (TRIPS) can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all".

The Mashelkar Committee conveniently ignored the recommendations of the 2002 study entitled "Integrating Intellectual Property Rights and Development Policy" produced by United Kingdom Commission on Intellectual Property Rights, an authoritative international group. It also ignored the conclusions reached by the World Health Organisation (WHO) Commission on Intellectual Property Rights, Innovation and Public Health in its 2006 report.

Both these international bodies have unambiguously clarified that "since there is no definition of invention in the TRIPS Agreement, developing countries may determine in their own ways, the definition of an invention, the criteria for judging patentability, the rights conferred on patent owners and what exceptions to patentability are permitted".

In fact, the U.K. Commission specifically recommends that developing countries should aim at "limiting the scope of subject matter that can be patented". Mashelkar was himself a member of the U.K. Commission. Furthermore, the Pharmaceutical Research and Development Committee (PRDC), which produced its report in 2001 and was chaired by Mashelkar, also recommended that "pharmaceutical patents should be granted only for new chemical entities or new medical entities".

The Mashelkar Committee's report was full of quotes from laws of developed nations on the patenting of pharmaceutical inventions and micro-organisms. It had no analysis of the political economy of these laws and was hardly concerned about their lessons for the interests of India. It ignored the views of not only public interest groups but also of the Indian Pharmaceutical Alliance (IPA) and the Indian Drug Manufacturers Association (IDMA), the two most important groups of the Indian drug industry.

The Committee's report indicated that it was in the national interest to allow incremental innovations since in-house capabilities of the Indian drug industry were limited. It reached this conclusion on the basis of the examination of international patents filed by selected Indian companies. It ignored the fact that patents law was territorial in nature and had to be in line with both the stage of development of the industry and the socio-economic conditions of the nation. Interestingly, Shamnad Basheer himself states: "The key failing of the Committee is not engaging with the tough policy issues. The conclusions may be correct, but there is much to be said for the manner in which they were arrived at."

The issue of the cost of drug research appeared only once, indirectly, in the report; the Committee was sceptical of the capacity of Indian companies to raise investments for the development of NCEs. The Committee noted: "Drug discovery research is still finding its feet in India. Though many companies are investing, it will at least be a decade before a critical mass is in place and results start accruing. Thus, restricting patentability to just NCEs would mean that most of the pharmaceutical product patents would be owned by MNCs." But it did not address the obvious question: would MNCs not be successful in owning the largest number of incremental pharmaceutical product patents too?

The Committee did not even consider possible alternatives within the framework of the TRIPS Agreement on the issue of patentability of incremental innovations. It would be in the interests of both the public and the Indian industry to design a patents law that would protect only "new drugs" (NCEs) under the provision of product patents and use the provision of process patents to protect the remaining incremental pharmaceutical innovations. In this way, it would still be possible, in a manner compatible with TRIPS, to use the provisions of "dependent" non-voluntary or compulsory licences for the introduction of even those new drugs that are still under product patents. Indian companies would still be required to use the Patents Act as an instrument of balanced competition, involving less litigation. If Section 3(d) of the current Act, which spells out what is not patentable in the drug industry, is retained in such a law, it will need to include additional safeguards of clinical superiority. This strategy would encourage the Indian drug industry to develop as a complete value chain, allow the national innovation system to become more oriented to the domestic market and encourage public sector research-and-development (R&D) organisations to undertake more work on neglected diseases.

The Mashelkar Committee did not distinguish between discrimination and differentiation. It cited Article 27.1 of the TRIPS Agreement to argue that it would be TRIPS incompatible to limit patentability to NCEs and that India could not exclude certain kind of "pharmaceutical inventions" from the scope of patentable inventions. The Patents (Amendment) Act, 2005, excludes patenting of inventions relating to atomic energy (Section 4) and in the area of national security (Section 39) broadly if the invention is relevant for defence purposes.

As for the problem of attracting foreign direct investment in contract R&D and the manufacture of bulk drugs, a good contract law that meets the requirements of confidentiality would suffice. Already, India has been able to attract a lot of investment in contract R&D and also foreign direct investment; it can do so in the future, too, without strengthening the Patents Act in favour of MNCs.

Parliament might consider referring the matter of the Mashelkar Committee report to the Standing Committee of the Ministry of Commerce, instead of allowing Mashelkar to resubmit the report. That would put Parliament in a better position to work out the mechanisms of strengthening the patents regime and to address the issues raised here.

Dinesh Abrol is co-convener of the National Working Group on Patent Law and a scientist with the National Institute of Science, Technology and Development Studies of the Council of Scientific and Industrial Research.