Ensuring universal access


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DESPITE the controversy over the figures of the estimated number of people living with HIV/AIDS (PLWHAs), it is now widely accepted that the minimum number is about four million in India, making it the second largest infected population in the world after South Africa. The figure is likely to rise exponentially in the next decade. India will then have the dubious distinction of being the AIDS capital of the world. And if things don’t change soon all the PLWHAs will die a slow and silent death.

In the first decade and a half after the discovery of the HIV virus, neither a cure for HIV nor any treatment were available. This inevitably meant that once a person was HIV positive, death due to AIDS was a certainty. However, with the advent of the triple-drug combination antiretroviral (ARV) therapy in the mid-1990s, HIV became a treatable disease for the vast majority (about 70%) of PLWHAs. With the ARV therapy, the PLWHA, can for all practical purposes, live a full and normal life for most of her/his lifetime. ARV therapy has to be taken lifelong. However, the costs of these drugs are prohibitive. Add to this the costs of various monitoring tests and the treatment becomes unaffordable for most PLWHAs, especially those living in developing and least developed countries.

In the West, the cost of the ARV therapy has been borne either by the state or insurance companies. As a result there has been a marked decrease in the number of deaths on account of HIV in the last seven years. In contrast, in the developing countries HIV is wreaking havoc. PLWHAs are dying by the thousands in sub-Saharan Africa. As HIV is largely affecting the young and productive populations, economies in some countries are literally being devastated by the HIV pandemic.



In 1996, the Brazilian government took a political decision, based on the value they placed on the life of their citizens that, like in the West, no Brazilian should die on account of HIV if s/he were treatable by ARV. They introduced and implemented, with the help of NGOs, the policy of universal access to antiretroviral therapy free of charge. As part of this programme, in September 2000, approximately 95,000 patients were receiving ARV therapy through the public health system, free of charge. This has resulted in the reduction of about 50% in AIDS-related mortality rates since 1995. While the Brazilian government spends approximately US$ 400 million a year on the programme, it estimated that it saved nearly US$ 440 million (making a net saving of US $ 40 million) on costs of treatment of PLWHA for opportunistic infections and their hospitalisation. In Brazil ARVs are manufactured by companies controlled by the government. As a result, the prices of the ARVs have been considerably lowered.

The prices of drugs in India generally, are probably the lowest in the world. This is for two reasons. First since the patent laws in India protect only process patents and not product patents in pharmaceuticals, a strong generic drug industry has developed. Second, the Drug Price Control Order (DPCO), issued under the Essential Commodities Act, fixes the price of the drugs covered under it on the basis of the cost of manufacturing and reasonable return to the producer.

In the HIV context, the government is making available drugs for opportunist infections free of charge to PLWHAs. In the ARV scenario internationally, the Indian pharma industry took the lead in lowering prices from the exorbitant amounts of Rs 20,000 to about Rs 4,000 per month. As a result ARV prices internationally fell consistently over a period of time. The first line regime of ARVs is now available in the Indian market at approximately Rs 1000 per month. With the tests required for monitoring, the cost goes up to Rs 3000 per month.



Even at this cost, the ARV therapy is unaffordable for most Indian PLWHAs. The tragedy is that even though Indian pharmas are producing ARVs at the lowest prices internationally, it not the Indian PLWHAs who are benefiting from this. Thus we have an unseemly spectacle of the Indian pharmas exporting most of their ARV production to other developing countries whose patent regimes allow such imports. The pressing question is how to make the ARVs affordable and accessible to those who need it, and thus protect the fundamental right to health and life of the PLWHAs guaranteed by the Constitution of India and repeatedly asserted by the Supreme Court. Undoubtedly, the government must decide that its citizens’ lives have a value and therefore must make ARVs available freely through the public health services.

The problem of accessibility and affordability of ARVs is going to be further exacerbated by the introduction of the TRIPS compliant patent regime, which will come into force in India after 31 December 2004. Under the new regime, India will have to grant protection to product patents too. This means that the patent-owner of a drug patented internationally after 1 January 1995 will have exclusive rights to its manufacture, use, offer for sale, marketing, or import of that drug. Given that internationally, patents in drugs are mostly owned by western multinational companies and they are likely to patent most of the new generation of ARVs (fusion inhibitors etc.), Indian pharmas will not be able to use the generic route to lower prices. One, therefore, has to consider options within and outside TRIPS.



Article 31 of TRIPS allows member countries to make provisions in its patent laws, which permit the government of member countries or third parties authorised by the government to use the subject matter of the patent without the permission of the patent owner. This is popularly known as compulsory licensing. Most authors consider this as the most favoured route. Also some of the restrictions in TRIPS are not applicable in the case of production of drugs by government entities and for the government’s own distribution. In such a situation, it would be beneficial for India to consider the revival of government controlled drug companies, which unfortunately have been allowed to collapse under the liberalisation scheme.

Article 30 of TRIPS allows a member to provide ‘limited exceptions to the exclusive rights conferred by a patent… taking into account the legitimate interest of third parties.’ However this cannot be considered a real option as it is applicable only for limited exceptions.

Another option is based on the principle of exhaustion. This means, ‘Once a patented, trademarked or copyrighted article has been sold by the IPR owner (or his licensee/agent), the further sale or distribution of this article can no longer be controlled by him.’ This would mean that, if need be, India could import on-patent drugs from another country if that drug is available in that country at lower prices, provided the Indian patent law regime allows for the same. However, this is not a real option for India as it is one of the few countries, like Brazil and China, which has a pharma industry that can produce drugs cheaply.

In India, the Patents Act (1970 Act) was recently amended to include provisions for compulsory licensing. Section 84 of the Act allows for an application for a compulsory licence after the expiration of three years from the date of the sealing of a patent application by the central government on the following grounds: (a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or (b) that the patented invention is not available to the public at a reasonably affordable price, or (c) that the patented invention is not worked in the territory of India.

Section 92 of the Act further provides for compulsory licenses on notification by the central government ‘in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use.’ Such notification has to be based on the subjective satisfaction of the central government as to the existence of national emergency, extreme urgency and public non-commercial use. In line with the amended provisions, the Government of India has notified for objections the Draft Patent Rules.



In other countries TRIPS compliant regimes have already been put in place. However it has been found, despite the fact that the patent law is compliant with TRIPS, governments have been bullied by MNC pharmas into not using them at all. South Africa is a classic case in point. It has the largest number of PLWHAs and the largest numbers dying from HIV/AIDS. Despite the dire need for the use of compulsory licensing provisions in its TRIPS compliant law, it has been unable to use them. HIV activists were forced to challenge the MNC actions in the South African High Court, which resulted in the MNCs withdrawing their case. Notwithstanding, the South African government has not issued a single compulsory license for the production of ARVs. The MNCs have been arguing that TRIPS cannot be interpreted to defeat intellectual property rights.



This prompted the Ministerial Declaration on TRIPS and Public Health in November 2001 (Doha Declaration). This recognises the concerns of developing countries and least developed countries (LDCs) about the implications of TRIPS for public health, especially in the context of diseases like HIV/AIDS, malaria and tuberculosis (TB). Para 4 of the Doha Declaration affirms that the TRIPS Agreement should be interpreted and implemented so as to protect public health and promote access to medicines for all.

The Doha Declaration explicitly recognises the right of members to grant compulsory licenses and to determine the grounds for granting them, the right of members to determine what constitutes national emergency or other circumstances of extreme urgency. It further clarifies that members are free to establish their own regime as regards the principle of exhaustion without challenge, thus leaving countries free to determine the rules for parallel importing. However, it must be noted that to make use of the options available under TRIPS, it is essential that national laws contain provisions allowing compulsory licensing and other exceptions as allowed by TRIPS.

The options outside TRIPS: (i) DPCO. Price control, which in India is regulated under the DPCO, remains outside the purview of TRIPS. This can also be used to make ARVs accessible to the public in the future. It will have to be suitably amended to take care of the TRIPS scenario. However, the reduction by the government of the number of drugs on the list on the basis of liberalisation is posing a problem. It should not be forgotten that public health should be treated on a different basis.

(ii) Global Health Fund. Another option available to India would be to rely on the funds released by the Global Health Fund to fight HIV/AIDS, TB and malaria. There are certain obstacles in this option too. Thus far, India has not received much attention as a potential recipient of funds. Even if India were to get a substantial amount, this raises fears of the increasing North-South economic dependency, which could have serious implications in terms of national sovereignty.



On an urgent and priority basis, the government must make available ARVs to PLHWAs free of charge. The opportunity for producing drugs at the lowest price by Indian pharma companies should not be lost. The government must also consider the revival of government controlled drug companies to make use of the options under TRIPS. The DPCO ought to be suitably amended in order to use the price control mechanism in the TRIPS era. Last, but not least, research and development should be encouraged in India to make sure that Indian companies have patents in drugs required for Indians.