Why is India afraid of compulsory licences?

While rich nations are discovering virtues of CLs, India has turned its back on this tool despite nudges from the court

- Latha Jishnu

TOWARDS THE end of May, Russia shipped nearly a quarter of a million packs of medicines to India as humanitarian assistance to fight the devastating second wave of the covid-19 pandemic. The packs contained the Russian generic version of Gilead’s experimental anti-viral drug remdesivir that is used to treat patients hospitalised with the deadly infection. The arrival of Remdeform, as the drug is called, highlighted the timidity of New Delhi in using its robust laws to make lifesaving drugs accessible and inexpensive.

Remdeform is being manufactured in Russia using a compulsory licence (CL) which is a flexibility permitted under the World Trade Organization’s (WTO) strict intellectual property (IP) rules. These rules, labelled trips or the trade-related aspects of IP rights, allow member-countries to override the rights of the patent holders in the case of a national emergency on health. In India, remdesivir is manufactured through voluntary licences (VLs) granted by Gilead, the patent holder, to generic-drug manufacturers that are allowed to make and export the drug according to the terms laid down by the originator company. Eight companies hold such licences.

VLs are considered less messy because they are quick and avoid the legal challenges that a CL invariably results in, although these are issued in special circumstances. VLs usually allow the firms to set their own prices even if the export markets are strictly circumscribed. Yet, remdesivir production by the Indian companies was not enough to meet the crisis in April-May as both demand and prices spiralled out of control, forcing India to seek assistance.