HOW DO TRIPS AGREEMENT PROVISIONS IMPACT INDIAN PHARMACEUTICAL PATENT STRATEGIES?

BACKGROUND: TRIPS AND ITS CORE PROVISIONS

The TRIPS Agreement was adopted in 1995 and mandates the minimum standards of protection of IPRs, such as patents, copyrights, and trademarks. According to Article 27 of TRIPS, patents might be available for any inventions in all fields of technology, including pharmaceuticals, as long as they are new, involve an inventive step, and have an industrial application. The period of protection is at least 20 years from the date of filing.

Before TRIPS, India’s Patents Act of 1970 allowed only process patents for pharmaceuticals, not product patents. This distinction allowed Indian companies to reverse-engineer patented drugs and manufacture generic versions via an alternative manufacturing process, giving rise to India’s own drug-making industry. TRIPS mandates product patents, compelling India to bring national law into conformity with global standards.

TRANSITION TO A PRODUCT PATENT REGIME

India was granted a 10-year transition period, which ended on January 1, 2005, for fulfilling its obligation under TRIPS. During this period, India retained its process-patent system but introduced a “mailbox” provision under Article 70.8 of the TRIPS Agreement for the filing of patent applications for pharmaceutical and agricultural chemical products. A mechanism for granting “exclusive marketing rights” (EMRs) under Article 70.9 of the TRIPS Agreement was also introduced.

The turning point came with the Patents (Amendment) Act, 2005, which again granted product patents for pharmaceuticals and agrochemicals. With this amendment, India became fully TRIPS-compliant and altered the patenting strategies of Indian pharmaceutical firms.

IMPACT ON INDIAN PHARMACEUTICAL INDUSTRY

a. Shift from Reverse Engineering to Innovation

Pre-TRIPS, it was process innovation where Indian pharmaceutical companies excelled—they came up with cost-effective production methods for patented drugs. With the introduction of product patents, such reverse engineering became unlawful. Consequently, Indian companies shifted their focus toward research and development (R&D), discovery of new drugs, and collaboration with multinational corporations (MNCs).

Companies like Dr. Reddy’s Laboratories, Cipla, and Sun Pharma are investing heavily in R&D and clinical trials. Many companies also entered into strategic alliances and licensing agreements to get access to the patented molecules and expand their global reach. The focus gradually shifted from imitation to innovation.

b. Strengthening of Patent Portfolios

The TRIPS-compliant regime prompted Indian companies to file patents domestically and internationally. The number of patents filed by Indian companies increased after 2005. Companies were starting to understand that intellectual property (IP) was a strategic asset for the business—essential for attracting investors, securing collaborations, and expanding into regulated markets, including the U.S. and EU.

c. Rise of Contract Research and Manufacturing Services (CRAMS)

The expenditure and the risk involved in discovering a new drug are high, so many Indian companies diversified into contract research and manufacturing services. This enabled them to leverage their strong manufacturing base and align with global pharmaceutical companies that were looking for more cost-effective research outsourcing partners. This indirectly led to the growth of India’s CRAMS industry because of the TRIPS agreement.

TRIPS FLEXIBILITIES AND INDIA’S BALANCING ACT

While TRIPS strengthened global patent protection, it also introduced certain flexibilities to deal with public health concerns—particularly important for developing nations like India. India has deployed these flexibilities strategically to protect access to affordable cheap drugs.

a. Compulsory Licensing (CL)

A compulsory license can be granted under section 84 of the Indian Patents Act after three years from the patent grant if the patented product is not available at a reasonably affordable price, is not adequately worked in India, or fails to meet reasonable public requirements.

The landmark Natco Pharma v. Bayer (2012) case marked India’s first compulsory license. Natco was given the task of producing a generic version of Bayer’s cancer drug “Sorafenib Tosylate (Nexavar)” at a fraction of the original cost. The decision emphasized that public health takes precedence over monopoly profits and demonstrated how India uses TRIPS flexibilities under Article 31.

b. Section 3(d): Preventing Evergreening

One of the most important safeguards of TRIPS is Section 3(d) of the India Patents Act. It stops companies from getting new patents for slightly changed versions of existing drugs unless the changes make the drug work better. This provision is intended to stop companies from engaging in so-called “evergreening,” a practice where they can win extended patent coverage for their drugs simply by making minor changes to existing ones.

This Novartis v. Union of India (2013) judgment upheld this principle, which refused to grant a patent for a modified version of the cancer drug “Glivec.” The decision also added to India’s credentials as a country that will not allow patent protection to override the need for affordable access to essential medications.

CHALLENGES AND STRATEGIC RESPONSES

Despite these flexibilities, India has faced several challenges in balancing TRIPS compliance with public health and industrial development.

R&D Investment Gap: Indian pharmaceutical companies continue to invest a significantly lower proportion of their revenue (usually 6–8%) on R&D in comparison with global pharmaceutical giants (15–20%).

Patent litigation: A growing number of patent cases have burdened legal and administrative systems.

Regulatory Delays: A slow examination process can delay innovation and discourage patent filings.

To address these issues, Indian companies are adopting adaptive steps, including

• Forming international collaborations and joint ventures.

• Pursuing niche areas like biosimilars and drug delivery systems.

• Expanding focus on generic exports to emerging markets in Africa and Latin America.

WAY FORWARD

India has always been a proponent of an equal intellectual property environment that allows innovation to prosper but does not compromise the availability of medicines. The Doha Declaration on the TRIPS Agreement and Public Health (2001) reasserted the right of WTO members to protect public health and ensure access to medicines for all—an approach India represents.

Moving forward, India’s pharmaceutical patent strategy must focus on:

• Enhancing domestic innovation ecosystems.

• Strengthening patent examination infrastructure.

• Encouraging academia-industry collaboration.

• Advocating for equitable global IP norms that respect developmental needs.

CONCLUSION

India’s pharmaceutical patent policies have fundamentally changed with the TRIPS agreement, evolving from process imitation to real invention and the obligation on the country to safeguard intellectual rights. India has used mechanisms like Section 3(d) and compulsory licensing to draw a fine line that balances TRIPS with public health considerations. The key issue is to keep a fair balance—promoting new innovation and global competitiveness without compromising the right to affordable medicines.