Kerala High Court: Centre May Invoke Patents Act Section 100 for Unaffordable Cancer Drugs

The news

Kochi and New Delhi. The Kerala High Court held on Monday, September 28, that the government can intervene when patented medicines are prohibitively priced, and directed the Centre to collect nationwide data on the affordability of patented life-saving medicines and to assess whether existing price controls and subsidies are ensuring patient access, The Economic Times reports. The case concerned abemaciclib and ribociclib, two patented drugs used for HR-positive, HER2-negative breast cancer, a type that accounts for around 55-60% of breast cancer cases in India. US drug maker Eli Lilly holds the patent for abemaciclib, and Swiss company Novartis supplies ribociclib. The court held that protecting public health is an important function of the government, and rejected a narrow reading that would confine “government use” to the government’s own departmental or institutional needs or to national security. Section 100 of the Patents Act, 1970 allows the government to make or use a patented invention for the purposes of government without the patent holder’s consent; ET explains that it allows the government to manufacture a patented drug and supply it on a non-commercial basis. According to advocate Maitreyi Sachidananda Hegde, the judgment establishes that when access to a patented medicine is compromised by an exorbitant price and government intervention is needed, Section 100 can be invoked, and that exorbitant cost is itself a ground. The court also rejected the argument of the pharmaceutical companies and the government that a generic version of palbociclib, an older drug of the same class available in India, could meet patients’ need, according to Chetali Rao of Third World Network. But the court left the decision to the government: the Centre must first collate data, decide whether a particular medicine is affordable, and then act under Section 100. It set no timeline. Arathi PM, a women’s rights activist and legal scholar, said denial of access to the two drugs has caused “a large number of avoidable deaths” and urged the Health Ministry to act immediately. K.M. Gopakumar of the Working Group on Access to Medicines and Treatments warned that leaving Section 100 to policy discretion keeps patients dependent on executive action. The access problem extends to rare diseases. In The Hindu, scientists of the Tata Institute for Genetics and Society write that India has reported 1,004 rare genetic disorders, that drugs exist for only about 5% of rare diseases, and that government support of up to ₹50 lakh per patient is often insufficient even for a year; almost 4,000 children are listed on a government crowdfunding platform, with a cumulative annual treatment cost above ₹9,000 crore. The syllabus link is GS2 on health and GS3 on intellectual property rights.

Static syllabus linkage

1. The Patents Act gives the State several doors into a patent, each with a different key. Section 84 of the Patents Act, 1970 allows any person to seek a compulsory licence from the Controller after three years from grant, on grounds that the reasonable requirements of the public are not met, that the invention is not available at a reasonably affordable price, or that it is not worked in India. Section 92 allows compulsory licences on a notification by the Centre in circumstances of national emergency, extreme urgency or public non-commercial use. Sections 99 to 103 deal with use of inventions for the purposes of government; Section 100 lets the Centre, or a person it authorises, use a patented invention for government purposes, and Section 102 allows the government to acquire a patent outright. Government use is the least used of these routes.
2. India’s first compulsory licence and its evergreening bar are global reference points. In 2012 the Controller of Patents granted India’s first compulsory licence to Natco Pharma for Bayer’s kidney and liver cancer drug sorafenib tosylate (Nexavar), mainly on the ground that the drug was not available at a reasonably affordable price; the decision was upheld on appeal. Section 3(d) of the Act bars patents on new forms of known substances unless they show enhanced efficacy. In Novartis AG v. Union of India (2013), the Supreme Court upheld the rejection of a patent on the beta-crystalline form of imatinib mesylate (Glivec) under Section 3(d). Together these have made India a leading example of using patent law flexibilities for public health.
3. TRIPS permits government use, and the Doha Declaration affirms it. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires members to grant 20-year product patents but, in Article 31, permits use of a patent without the holder’s authorisation, including by the government, subject to conditions such as adequate remuneration to the patent holder. For public non-commercial use, prior negotiation with the patent holder is not required. The Doha Declaration on the TRIPS Agreement and Public Health (2001) affirmed that TRIPS should be interpreted to protect public health and that each member may determine the grounds for compulsory licences. Section 100 is India’s implementation of this flexibility.
4. Price control in India mostly bypasses patented drugs. The National Pharmaceutical Pricing Authority, set up in 1997, fixes and enforces ceiling prices under the Drugs (Prices Control) Order, 2013, issued under the Essential Commodities Act, 1955. Ceiling prices apply to drugs in the National List of Essential Medicines, and newly patented drugs are generally not in it. The National Policy for Rare Diseases, 2021 provides financial assistance for treatment, which the Hindu article puts at up to ₹50 lakh per patient, and designates Centres of Excellence. For a patented cancer drug, therefore, the realistic levers are negotiation, bulk procurement, compulsory licensing or government use.

Why UPSC loves this

1. GS3 asks about IPR and GS2 about access to health care. Mains questions have covered India’s patent regime, Section 3(d), compulsory licensing and the tension between IPR and affordable medicines. This judgment adds a new element — a court reading government use broadly — that can be used in answers on TRIPS flexibilities.
2. Prelims tests the provisions and the international texts. UPSC has asked about TRIPS, patent terms and the WTO. Sections 3(d), 84, 92 and 100, the Doha Declaration and the NPPA’s role are fair targets, as is the difference between a compulsory licence and government use.
3. Ethics and international relations questions frame it as North-South. The balance between rewarding innovation and ensuring access is a standard ethics dilemma. In IR, India’s use of TRIPS flexibilities has been a friction point with the United States and the European Union, and the rare-disease proposal of benefit-sharing links to the WHO Pandemic Agreement debate.

Analysis

1. The judgment’s real contribution is interpretive, not operational. The court did not order the government to invoke Section 100; it removed the argument that it could not. By rejecting the narrow reading that confines government use to departmental needs or national security, it has made unaffordability a lawful ground. That changes the government’s negotiating position with patent holders immediately, because a credible threat of government use often lowers prices without being exercised. But until the Centre acts, no patient gets a cheaper tablet, which is why the absence of a timeline is the judgment’s weakest point.
2. Rejecting palbociclib as a substitute puts clinicians, not accountants, in charge. The companies and the government argued that a cheaper generic in the same class meets the need. The court’s refusal to accept this means that therapeutic judgment about which drug a patient needs cannot be overridden simply because a cheaper cousin exists. The counter-view is that health systems everywhere use such substitution to manage budgets, and that differences in outcomes between these drugs are debated in the medical literature. The honest middle is a health technology assessment that compares benefit and cost openly, which India’s process could formalise.
3. Government use is a quieter and possibly stronger tool than a compulsory licence. A Section 84 licence requires a private applicant, a three-year wait and a quasi-judicial process that the patent holder can contest at every step. Government use is exercised by the State itself for non-commercial supply, for example through public hospitals, and TRIPS does not require prior negotiation for public non-commercial use. That makes it well suited to cancer drugs supplied through government programmes. The risk is diplomatic: trading partners and multinational firms treat such steps as a signal about the investment climate, and India has faced pressure after earlier compulsory licensing. The remuneration paid to the patent holder is the answer to the charge of expropriation.
4. Data collection is the right first step but can become a delaying device. The court asked for nationwide affordability data, which is sensible, because a decision on government use should rest on evidence of prices, incomes and treatment gaps. But the rare-disease evidence in The Hindu shows how long patients wait: almost 4,000 children on a crowdfunding platform while the ₹50 lakh ceiling runs out within a year for many. A data exercise without a deadline can last longer than the patients it is meant to help. A time-bound assessment, reported to Parliament, would respect the court’s deference while protecting patients.
5. Access needs both law and industrial policy. Section 100 can make an existing drug cheaper, but it cannot create drugs for the roughly 95% of rare diseases that have none. The Hindu authors propose incentives modelled on the U.S. Orphan Drug Act of 1983, PLI-style support, advance market commitments through Centres of Excellence and Jan Aushadhi Kendras, and an Indian say in prices for the Global South through benefit-sharing. India’s strength as a supplier of 47% of generic prescriptions in the U.S., per the article, is the base for this. Patent flexibilities and incentives for innovation are therefore complements, not opposites.

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