Intellectual PropertyPatents

Pharma Drugs and Importance of Patents

Pharma companies spend millions - if not billions of dollars - before releasing a drug into the market. It, therefore, becomes necessary to patent the formulae to avoid losses.

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Have you ever wondered why India’s pharmaceutical industry has done so well? One of the main reasons is India’s patents system. The liberalisation of the patent system has enabled companies to make profits. 

Pharmaceutical companies conduct a lot of research and development before releasing a drug into the market. This R&D can be anywhere between 5-15 years, which costs the companies millions of dollars. These pharma companies patent the formula to ensure that the formula is not copied by rival companies. If they do not, then a rival company can replicate the formula, create the same drug, and patent it, which in turn will result in millions of dollars lost for the original pharma company. 

Pharmaceutical companies create and research drugs that help cure diseases and increase the longevity of life. Patents help these companies protect their assets in several ways. Patents help drug companies guarantee a profit and make their efforts and investments worthwhile in the long run. Now, let us take a look at why patents are important for Indian pharmaceutical companies. 

What Is Intellectual Property?

Intellectual property works as a form of intangible property that is developed due to the efforts of the human mind or intellect. Intellectual property rights, commonly known as IRPs, help people who generate such property to safeguard their rights and protect their best interests. These rights are given to the inventor, creator, or author so that they may be able to protect their properties. Though the intellectual property is intangible, the material within it is tangible and therefore requires rights to protect. Hence it is seen as an asset that can be bought, licensed, or even sold as and when needed.

Types of Intellectual Property Rights

A trademark serves as an identification tag that can help represent a product graphically and distinguish products from the products offered by others. Meanwhile, an industrial design concerns itself with the outward physical appearance of a product or device and tasks itself with making products look appealing. Additionally, a geographical indication helps to identify agriculturally and manufacture goods that are unique to a specific territory or region. Copyright gives someone the exclusive right to authorize, monetize, and publicize specific works of art, music, or drama. However, out of all these, patents are what help the Indian pharma companies the most. 


What are Patents?

Patents are a type of intellectual property right that is of great value to the Indian pharmaceutical industry. The other types of major IRPs are trademark registrations, industrial design patents, geographical indications, and copyright. The grant of patents in India comes under the purview of the Patents Act, 1970. Throughout the last 40 years, India has made tremendous changes to its patent filing system. Furthermore, the provision of product patents and an increase in patent terms also became a part of these laws after India signed the trade-related aspects of the intellectual property rights agreement, known as TRIP in 1995. A patent serves as an economic catalyst to Indian pharmaceutical companies as they help them monetize their research.

Patents grant protection to the inventors by preventing their inventions from recreating, copying, and distributing illegally. Issued by the government, the inventor can apply for a patent from the government. It helps pharma companies by making it impossible for competitors to make, use, or sell their drugs and unique formulas. However, it also gives them the right to license their drugs and designs to others, making it a very flexible system. Primarily, it works as a sort of contract between the inventor and the government, as it protects the inventor for a specified period.

Things to Know About Patents

  1. Only given to designs or inventions that pass specific valid criteria
  2. Limited for twenty years, after which they must be renewed
  3. It is territorial and hence holds legal ground only in India
  4. To protect internationally, inventors must file international patents through the patent cooperation treaty.

Criteria of Patentability

Patents are granted only if they satisfy the following basic requirements:

  • To be patentable, the idea or subject behind the patent must be new and not one that has precedence. An invention is new if it is not a part of any publishing document in India
  • The patent must be the feature of an invention that will bring forth technical advancement and one which has economic significance
  • The invention that the patent refers to must be made, utilized and created by an industry.

Why Are Patents Important?

Patents offer a technical solution to modern-day technical problems. The patenting system in India became what it is now, thanks to the Patents Act, 1970, which made it possible for people to file product and process patents. Since the Pharma industry is knowledge-driven, the research included in it is costly. Furthermore, such research is highly unpredictable, with some resulting in new drugs and others failing. Therefore, for them to do well, the companies must be able to efficiently monetize the research that bears fruits. Patents allow pharmaceutical companies to do so by safeguarding their interests. 

In such a competitive market, companies must protect their inventions, designs, and drugs from unauthorised use if they are to stay prominent. The Indian patent system allows pharmaceutical companies to file different kinds of patents that protect them from getting their designs and drugs ripped off. The various patents help preserve drugs, drug compositions, synergistic combinations, and even techniques used to build medicines. Therefore, it serves as an all-around fool-proof mechanism that prevents any sort of intellectual theft. The India patent legislation helps balance the interests of both pharma companies and the general public. 

It is flexible enough to allow for licensing, which makes cheaper outsourcing possible while also being stringent enough to prevent illegal copying. It also encourages scientific research as companies and institutions can make profits by licensing their patents to larger companies. Therefore, in many ways, such a patenting system can be regarded as the backbone of the Indian pharmaceutical sector.


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