Newly amended patent rules threaten to raise medicine prices

The Central government has amended its patent rules which will make it easier for multinational pharmaceutical companies to sell many medicines at exorbitant prices in the Indian market.

Patent is a form of monopoly right enjoyed by capitalist companies over newly invented products. When a pharma company gets a patent for a new medicine, then any other company or individual who produces and sells that medicine has to pay the patent holding company a fee, called royalty, for every unit sold. Thus, patents make it possible for capitalist companies to enjoy a monopoly over any new product they create. Charging exorbitant prices, prohibiting parallel imports (import of the patented product produced legally abroad), limiting supply through exclusive licensing contracts, continuing patents beyond life of original patent by modifying inventions minimally, are all commonly witnessed practices of patent holders to retain their monopoly.

In the pharmaceutical industry, such patent regimes enable drug manufacturers to charge exorbitant price for imported drugs. They effectively create additional barriers to generic drug production, which is likely to lead to higher medicine prices in the country.

When the life of a patent is over, other manufacturers can produce the same drug using their own technology. Such drugs are referred as generic drugs and are much cheaper as no producer can now have monopoly on production. The recent amendment to the patent rules have created additional barriers to generic drug production, thereby enabling patent holding companies to charge monopoly prices for longer durations.

It is important to note that the amended rules were notified on 15 March, 2024, just five days after the Indian government signed a Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) consisting of Switzerland, Norway, Iceland, and Liechtenstein. Swiss multinational pharma monopolies like Novartis and Roche along with US and German pharma monopolies have been putting pressure on the Indian government to relax its patent rules.

The two important changes in rules relate to ‘pre-grant opposition’ and ‘compulsory licensing’ of patents.

Pre-Grant Opposition

The patent system in India allows any Indian citizen, and even those of other countries, to file opposition to a patent even before it is granted. This is referred to as ‘pre-grant opposition’. Pre-grant oppositions are an important mechanism to constrain issuance or extension of patents. Using this mechanism many applications for patent extensions of drugs for TB, Hepatitis and other diseases have been successfully opposed.

Multinational pharma monopolies do not want pre-grant opposition to be permitted. They therefore ask their governments to take care of it during bilateral and multilateral negotiations. India-EFTA Free Trade Agreement incorporated changes to weaken this provision, which are reflected in the amended patent rules.

The new rules grant arbitrary power to Indian patent controllers to directly reject any opposition application, even without listening to the petitioner’s side. This would facilitate the granting of patents on known medicines with minor alterations.

The rules have also been changed to include fees to be paid for filing pre-grant opposition, a clause that did not exist earlier.

Compulsory Licensing

The Indian patent law gave authority to the government to force a patent holding foreign company to grant license to an Indian company to produce the patented drug, under certain conditions. This is referred to as compulsory licensing. The compulsory licensing provision can be used by the government if it is found that

  1. the patented invention is not available to the public at a reasonably affordable price, or
  2. the patented invention is not worked in the territory of India, or
  3. the patented product does not satisfy public needs reasonably.

For this purpose, the Indian Patents Act (IPA) made it binding on the patent-holder to furnish relevant information every year about revenue earned and whether the medicine has been imported or manufactured in India. Such information helped in determining whether patients who need the drug are able to access it. The stated intent was to ensure some kind of protection to those who needed the drug by not allowing any pharma company to completely deny people access to the drug through its 20-year monopoly over the patented drug.

Using the compulsory licensing provision, an anti-cancer drug, for which the patent was granted to the German monopoly – Bayer, was made available at Rs. 8,800 a month as against the exorbitant price of Rs. 2,80,000 per month charged by Bayer. This is an example of how the compulsory licensing provision has been used in the past to prevent capitalist companies from charging monopoly prices.

The new patent rules have considerably diluted this provision. Instead of furnishing the information annually, the patentee will have to submit it only once in three years. The requirement of giving information on revenue earned has been completely eliminated. So is the information on whether the medicine is imported. The patentee has to just tick a box indicating whether the patent has worked in India. This will make compulsory licensing much more difficult.


The recent amendments in patent rules are in the service of maximising the profits of monopoly capitalist pharma companies at the expense of the masses of Indian people. They are likely to lead to substantial increases in the prices of essential medicines in our country.

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