Access to Affordable Medicines for the Poor in India

Background and Problem Statement

In India, healthcare costs account for 73% of the average citizen’s monthly expenditure. Seventy-seven percent of these healthcare expenses are specifically on drugs and medicines. The medicines that are absolutely essential have become simply unaffordable and inaccessible for the country’s poorest, who are also the most susceptible to disease. Costly expenditures on basic drugs have driven families deep into poverty, and the high prices have served as a barrier to health care and upward social mobility. Despite government efforts to regulate drug prices and strengthen quality control, essential drugs continue to be sold at prices drastically higher than their true market value.

India’s current intellectual property protection policies and drug patent system are at the root of unfair drug prices. Since signing the TRIPS agreement in 2005, India’s intellectual property policies have been forced to conform to international standards. The international IP regime allows multinational corporations to maintain patent protection over their technologies for up to 20 years and grants them a monopoly over the market, limiting market competition and driving drug prices higher and higher for long periods of time. Pharmaceutical companies support the IP regime safeguarded by TRIPS and argue that the patent system is necessary for innovative firms to recover their costs in order to develop more drugs and technologies for the world.

It is important for the Indian government to respect its international obligations, and it is important that we encourage multinational pharmaceutical companies to produce new medicines. But it is even more important that India’s leadership respect the needs of the nation and its people. It has been proven time and again that the pharmaceutical patent system in its current form impoverishes our citizens and cripples our healthcare system by making essential medicines increasingly difficult to access. The Ministry of Commerce and Industry needs to consider options that respect our relationships with multinational corporations and international institutions, but simultaneously mitigate the detrimental effects of the current patent system. Such policy options must:

1. Allow for greater market competition through legal domestic production and sale of essential generic drugs.
2. Encourage further drug discovery and innovation and ensure sufficient financial compensation for MNCs, organizations, and individuals that invest in research and development
3. Fit within India’s intellectual property rights framework as defined by its trade agreements with international institutions and other countries and regional bodies.