Centre Can Use Power Under Patents Act To Make Exorbitantly Priced Drugs Affordable: Kerala High Court

The Kerala High Court on Monday held that Section 100 of the Patents Act permits the Central Government to use a patent to manufacture a medicine and sell it to a needy patient on a non-commercial basis.

It further held that the provision is required to be invoked where a patented medicine is being sold at an exorbitant price.

“The provisions of Section 100 impose no restriction on who the purchaser could be,” Justice Harisankar V. Menon held.

“When that be so, the provisions under Section 100 would include the entitlement of the Government to use the patent or invention for manufacturing the medicine covered by the patent and sell the same on a non-commercial basis to a person who can be none other than the needy patient. This position is made further clear by the specific inclusion of “medicines or drugs” under sub-section (4).”

The case concerned Ribociclib, a patented drug used in the treatment of breast cancer. The petition was initially filed by a woman undergoing treatment who contended that the drug was exorbitantly costly and sought Government intervention to make it available at a reasonably affordable price.

After her death during the proceedings, the court continued the case, taking suo motu cognizance of the issue of exorbitant pricing of life-saving patented medicines. It appointed Advocate Maitreyi Sachidananda Hegde as amicus curiae.

The amicus argued that Section 100 should be used when patented medicines are not available at affordable prices. The Centre and the pharmaceutical companies, on the other hand, contended that the provision applies when a patent is used “for the purposes of Government”.

The Ribociclib manufacturer argued that Section 100 applies where the Government needs to use the patent “for the purposes of Government”, and not merely because there is a demand for a reduction in price. It also relied on the investment involved in research and development and the protection afforded by the patent.

The court rejected the contention that Palbociclib, another breast cancer medicine referred to by the Centre, could be treated as interchangeable with Ribociclib. It noted that material from the Drugs Controller General of India and the Regional Cancer Centre showed differences in the stages of breast cancer for which the two medicines were being used.

“The expert opinion as above shows that 'Palbociclib' and 'Ribociclib' are not interchangeable,” the court held.

The court then examined what “for the purposes of Government” means under Section 100. The provision allows the Central Government, or a person authorised in writing by it, to use a patented invention for Government purposes.

For medicines, the provision also covers making, using and selling the patented invention. Section 100(6) further permits the resulting goods to be sold on a non-commercial basis.

The court held that Section 100 does not restrict who may purchase goods manufactured using the patent.

“The term 'purposes of Government' also includes the duty of the Government/State to improve public health as mandated under Article 47 of the Constitution of India.”, the court ruled.

“This has to include the use of the patent, manufacturing of the medicines, and supplying the same on a non-commercial basis under Section 100(6) of the Act to the needy patients.”, it added.

The court also referred to Section 83 of the Patents Act, which sets out general principles governing patented inventions. It noted that the provision requires patents to be worked in a manner that does not impede public health and that the benefit of patented inventions should be available at reasonably affordable prices.

The court consequently held that Section 100 is required to be invoked when Government intervention is necessary because a patented medicine is unaffordable due to its price.

“The provisions of Section 100 of the Act are required to be invoked in circumstances where the Government is required to intervene, such as when the medicine is unaffordable on account of its exorbitant price.”, it ruled.

The court, however, declined to issue a positive direction requiring the Government to exercise the power under Section 100 in the case. It noted that the patent had been granted in recognition of a new invention and conferred protection on the patent holder.

The Government is also bound by a patent during its validity.

“If such sanctity is not being extended to a patentee, that would be a factor which would be counterproductive insofar as no one will come forward to register their patent under the statute.”, the court ruled.

The court held that it was for the Central Government to decide whether Section 100 should actually be invoked.

“It is for the Central Government to consider whether Section 100 of the Act requires to be invoked since ultimately the same is a policy decision.”

The court also held that the Government must collect sufficient data to determine whether a particular medicine is affordable. This includes the number of people affected by the relevant cancer, the number of patients consuming the medicine and cases where patients are not taking it because of its alleged exorbitant price.

The court ultimately held that Section 100 permits the Government to use a patent to manufacture the patented medicine and sell it to “a person, including a needy patient, on a non-commercial basis."

It further held that the provision is required to be invoked where Government intervention is necessary, including when a patented medicine is being sold at an exorbitant price.

The Government must collate the required data, determine whether a particular medicine is affordable and proceed under Section 100 if it finds this necessary