Demand for Compulsory Licensing for Rare Disease

Demand for Compulsory Licensing for Rare Diseases: Balancing Public Health and Patent Rights

Conceptual Framework: Public Health Necessities vs Intellectual Property Rights

The growing demand for compulsory licensing (CL) for rare diseases in India highlights a tension between promoting access to lifesaving drugs and protecting intellectual property rights under the WTO’s TRIPS Agreement. Rare diseases, often classified as “orphan diseases,” pose unique challenges due to their low patient base, high R&D costs, and exorbitantly priced drugs, making policy tools such as compulsory licensing critical. The debate also mirrors the larger global discourse on balancing innovation incentives with equitable healthcare access.

UPSC Relevance Snapshot

• GS Paper III: Public health, intellectual property rights, pharmaceutical sector reforms
• GS Paper II: Government policies and interventions in health
• Essay: Science, technology, and ethical implications for humanity
• Prelims: TRIPS Agreement, Compulsory Licensing (CL), Section 84 of the Indian Patents Act

Institutional Framework and Key Provisions

The institutional basis for compulsory licensing lies in India's compliance with the TRIPS Agreement, framed within a domestic legislative framework. These measures are geared toward addressing public health emergencies and ensuring access to affordable medicines.

Key legal provisions and institutional roles include:

• Indian Patents Act, 1970: Section 84 allows for compulsory licensing on grounds such as non-availability of patented inventions at reasonable prices or when the invention is not “worked” in India.
• TRIPS Agreement: Permits compulsory licensing as a TRIPS flexibility to address public health priorities.
• National Policy for Rare Diseases, 2021: Provides financial assistance and institutional support for patients of rare diseases via Centers of Excellence (CoE).
• Production Linked Incentive (PLI) Scheme for Pharmaceuticals: Incentivizes domestic manufacturing of orphan drugs.

Key Issues and Challenges

Accessibility and Affordability Challenges

• Exorbitant costs impede access: Drugs for rare diseases often cost crores due to limited commercial viability and high R&D investments.
• Limited domestic production: Dependence on imports increases costs. Domestic pharmaceutical firms are often hesitant to invest in orphan drug development due to market risks.
• National Policy for Rare Diseases (NPRD) limited by funding gaps: Financial assistance of Rs. 50 lakh per patient is insufficient given the high costs of some treatments.

Legal and Institutional Barriers

• Ambiguity in "public health rationale": Compulsory licensing is rarely invoked due to lack of clarity on what constitutes "unmet public health needs."
• Patent litigation risks: Fear of investor retaliation or WTO disputes may limit government willingness to issue CLs frequently.
• Inadequate enforcement of Section 3(d): Anti-evergreening provisions to prevent frivolous patents need stricter implementation to uphold affordability.

Global Diplomacy and Trade Pressures

• Pharmaceutical firms and developed nations often exert pressure through trade agreements and sanctions to limit CL use, claiming it harms innovation.
• Investments in domestic R&D risk being deprioritized due to fears of losing patent protections.

Comparative Context: India vs. Other Countries

The global response to public health crises and rare diseases often hinges on the flexibility of compulsory licensing mechanisms. Below is a comparative table:

Parameter	India	Brazil	Thailand
Grounds for CL	Not affordable or "worked" domestically	Public health emergencies; price disparity	Lack of access to essential medicines
Examples of Use	Nexavar for kidney cancer	HIV/AIDS drugs	HIV drugs like Efavirenz
Litigation Threats	High; subject to WTO scrutiny	Moderate; often defended under TRIPS flexibilities	Moderate; proactive stance from public sector agencies
Pharmaceutical Industry Reaction	Significant pushback, including from MNCs	Moderate	Limited, as market size is small

Critical Evaluation

The use of compulsory licensing for rare diseases in India represents a crucial interplay of public health urgency and legal safeguards for intellectual property. While Section 84 offers a strong framework, its use has been minimal due to external pressures and inconsistent domestic implementation. WHO and the Doha Declaration reaffirm CL as a legitimate instrument to address global health inequities. However, India’s lack of clarity on CL policy grounds – especially beyond emergencies – restricts its potential. Further, funding gaps under the National Policy for Rare Diseases and logistical bottlenecks hamper its effectiveness.

Structured Assessment

• Policy Design Adequacy: The Indian Patents Act and NPRD 2021 provide a legal foundation, but the absence of streamlined operational guidelines limits real-world impact.
• Governance and Institutional Capacity: Enforcement of Section 84 remains weak due to litigation risks and absence of clear implementation metrics.
• Behavioural and Structural Challenges: Low awareness among stakeholders and structural inefficiencies in R&D funding for orphan drugs persist.

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