Patents and the Indian Pharmaceutical Industry

January 13, 2023
Indian Pharmaceutical Healthcare industry

By Renu Bala Rampal and Johny Solomon Raj
Patents, being one of, if not the most important IPR sought by the pharmaceutical industry, went through major systemic changes after India became a signatory to the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement in 1995. It came under instrumental obligation to amend the patents law prevailing in the country, in order to make it compliant with the provisions of the international agreement. The first amendment was the Patents (Amendment) Act, 1999 which bestowed pipeline protection until product patents were granted for pharmaceutical inventions. It laid down the provisions for filing of applications for product patents in the field of drugs and agrochemicals with effect from January 01, 1995, and introduced the grant of Exclusive Marketing Rights (EMRs) on the selected applications. To comply with the second set of TRIPS obligations, India further amended the Patents Act, 1970 by the Patents (Amendment) Act, 2002. Through this amendment, 20 years uniform patent term was provided for all categories of inventions, i.e. patents would now have a limited term of 20 years, counted from the date of filing the patent application.

The pharmaceutical industry is known to be fiercely competitive and an intensely “knowledge driven” sector. Pharmaceutical research is very costly and often unpredictable in nature. It is therefore imperative for pharmaceutical companies to acquire patent monopoly over any new, inventive and useful product as may emerge at the end of years of dedicated research work.

The Impact of the WTO on the Pharmaceutical Industry

The establishment of the World Trade Organization led to a paradigm shift in world trade. TRIPS was in fact negotiated during the Uruguay Round of trade negotiations under the General Agreement on Tariffs and Trade (GATT) and “one of the primary reasons for incorporating intellectual property issues into the GATT framework was the pharmaceutical industry[1]. India signed the GATT on April 15, 1994, thereby undertaking the mandate to comply with the requirements of GATT, including the TRIPS Agreement.

India is thereby required to meet the minimum standards under the TRIPS Agreement in relation to patents and the pharmaceutical industry. India’s patent legislation must now include provisions for availability of patents for both pharmaceutical products and processes inventions. Patents are to be granted for a minimum term of 20 years to any invention of a pharmaceutical product or process that fulfils established criteria.[2]

Patents in the Pharma Industry

Patenting pharmaceuticals is a strategic race over ever-evolving drugs. Currently, the United States leads the pack in terms of number of pharmaceutical patents held, followed by China. India has also stepped in to become a major player in this race, and one important change that has incentivised the filing of pharmaceutical patents in India is the drug price control amendments. Further facilities and exemptions provided by the Indian Government is also aimed at getting ahead in this international race.

Automation in pharmaceuticals has brought about revolutionary change, in respect of handling materials, distributing medication and manufacturing and packaging formulations in industries, with minimal to no human intervention. Companies are currently embracing advancements in AI technology to create new and improved treatments and also to find some ways to get people access to treatment quickly. Recent patents have been granted for use of machine learning, including for classifying the digital images of the cells, with each being treated with different experimental compounds, and also for image processing and machine learning algorithms being used to test compounds against samples of diseased cells based on pre-existing historical or recorded data as a control. Diagnostic and research developments, such as use of the Convolutional Neural Network (CNN) remains to be exploited via patents, and even machine learning still has many applications worth exploring in the pharmaceutical industry.

Emerging Issues in the Pharmaceutical Industry

India had a product patent regime for all inventions under the Patents and Designs Act, 1911. However, in 1970, the government introduced the new Patents Act, which excluded pharmaceuticals and agrochemical products from eligibility for patents. This exclusion was introduced to break away from India’s dependence on imports for bulk drugs and formulations and provide for development of a self-reliant indigenous pharmaceutical industry. The lack of protection for product patents in pharmaceuticals and agrochemicals had a significant impact on the Indian pharmaceutical industry and resulted in the development of considerable expertise in reverse engineering of drugs that are patentable as products throughout the industrialised world, but unprotected in India.[3]

As a result of this, the Indian pharmaceutical industry grew rapidly by developing cheaper versions of a number of drugs patented for the domestic market and eventually moved aggressively into the international market with generic drugs once the international patents expired. In addition, the Patents Act provides a number of safeguards to prevent the abuse of patent rights and provide better access to drugs.[4] Although recently there has been a recent amendment in the Drug Price Control Orders in 2013 and 2021 which has again resulted in the incoming of foreign players.

The Patents Act also has provisions allowing compulsory licensing, a move made by the Government to ensure universal access to essential products, above prioritizing the monopoly of patent holders. After the completion of three years from the date of selling the patent, any person interested in working on the patented invention may apply for a compulsory licence with respect to the invention. The Controller of Patents may direct the patent holder to grant such licence upon terms as may be deemed fit, only if she is satisfied that the reasonable requirements of the public with respect to the patented invention have not been met, or that the patented invention is not available to the public at a reasonable price.


India has come a long way in its journey to patent independence and has even been hailed as a pioneer in respect of matters such as compulsory licensing. However, there is still a way to go yet, especially in an era of rapidly developing new technology, which is likely to have considerable impacts upon the pharmaceutical sector. India will have to keep up with international standards and developments if it hopes to maintain its position as a pharma heavyweight.


[1] Zafar Mirza, WTO/TRIPs, Pharmaceuticals and Health: Impacts and Strategies, The Society for International

Development, SAGE Publications.



[4] Ibid

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