“When Law Turned Its Back: The Truth About India's Vaccine Licensing Failure”

This article is written by Harinibai.R during her internship with Le Droit India.

Abstract

Global discussions about intellectual property rights and fair access to necessary medications were rekindled by the COVID-19 pandemic. India could have used compulsory licensing to tackle vaccine shortages and high costs, but favored voluntary licensing and diplomacy instead.India could have used compulsory licensing to tackle vaccine shortages and high costs, but favored voluntary licensing and diplomacy instead.

Keywords: COVID-19 Vaccines, Compulsory licensing, Legal Framework, TRIPS Waiver, vaccine equity.

Introduction:

Section 92 of the Patents Act, 1970, provide for India’s legal framework for compulsory licensing, allows the government to approve third-party production of patented goods in cases of national emergency, extreme urgency, or public non-commercial use. This clause is consistent with the Doha Declaration and Article 31 of the TRIPS Agreement,https://indiankanoon.org/doc/28519340/ which acknowledge public health emergencies as legitimate justifications for superseding patent rights. India did not grant mandatory licenses for any COVID-19 vaccine, even though there were significant shortages of the vaccine during the second wave (April–May 2021).

The COVID-19 pandemic was a turning point for global public health and intellectual property systems. It raised concerns about using legal frameworks to ensure fair access to life-saving treatments and vaccines. Compulsory licensing, which allows production of patented drugs without the patent holder’s consent in certain cases, became highly debated. With its strong generic drug industry and pro-public health stance, India was well-positioned to use this tool but chose a cooperative, diplomatic approach instead. This article examines India’s legal framework for compulsory licensing, the challenges during COVID-19, and the government’s actions—or inactions—at the intersection of public health and intellectual property.

India’s Legal Framework and precedents:

The Patents Act, 1970, particularly Chapter XVI (Sections 84–94), which establishes the legal basis for granting such licenses, governs India’s approach to compulsory licensing.

Section 84 allows any person to apply for a compulsory license three years after the patent grant if the patent holder does not work the invention in India, fails to make it reasonably affordable, or does not ensure its widespread availability.

In situations of national emergency, extreme urgency, or public non-commercial use, Section 92 allows the government to grant compulsory licenses without waiting the full three years. Furthermore, Sections 100 and 102 give the government the authority to use or obtain patents for public purposes, while Section 92A permits the export of patented medications to nations with limited manufacturing capacity in accordance with the Doha Declaration. Prior to 2005, when it became TRIPS-compliant, India only allowed process patents for pharmaceuticals. After this change, authorities permitted product patents, and the compulsory licensing framework gained greater significance. In 2012, in the landmark case of Natco Pharma Ltd. v. Bayer Corporation, India granted its first and only compulsory license. Because of its exorbitant price and restricted supply, the Controller of Patents in this instance permitted Natco to produce a generic form of the cancer medication Nexavar.

Relevant case laws:-

In BDR Pharma v. Bristol-Myers Squibb and Lee Pharma v. AstraZeneca, later applications for compulsory licenses were denied due to procedural and evidentiary requirements, including inadequately seeking a voluntary license beforehand. After obtaining a voluntary license from Eli Lilly, Natco subsequently retracted its Section 92 application for a mandatory license for Baricitinib during the COVID-19 pandemic. These cases show that although India has a well-established and TRIPS-compliant legal framework for compulsory licensing, its use is still restricted and cautious, particularly in situations involving sensitive political issues or complex technology.

COVID-19 and the Demand for Compulsory Licensing:

As countries struggled with vaccine disparities and restricted access to vital treatments, the COVID-19 pandemic thrust compulsory licensing (CL) to the fore of international policy discussions. Article 31 of the TRIPS Agreement, https://ledroitindia.in/trips-agreement-comprehensive-ip-protection-framework/reinforced by the Doha Declaration, empowers governments to suspend patent protections during national emergencies, allowing them to make life-saving medical treatments more accessible to the general public. Countries pushed for a similar strategy to overcome the monopolistic barriers surrounding COVID-19 vaccines, citing previous examples, especially the effective use of CL for HIV/AIDS drugs in the early 2000s. Leading the charge, India and South Africa co-sponsored a proposal for a temporary TRIPS waiver on pandemic-related patents at the World Trade Organization in October 2020. More than 100 countries supported the proposal. While no country implemented CL for vaccines themselves, nations such as Israel, Hungary, Russia, and Canada moved to change their domestic laws or invoke CL provisions for specific COVID-19 medications.

Aspects about TRIPS :-

India did not grant any mandatory licenses during the pandemic, even though it was a strong supporter of the TRIPS waiver. The absence of infrastructure for mRNA manufacturing and reliance on imported raw materials were among the major production obstacles mentioned by the government. In order to maintain its position in international negotiations, India seemed to favor a multilateral diplomatic approach over unilateral licensing. However, in reality, the inability to use CL for vaccines exposed more serious structural problems, such as the technological difficulty of producing vaccines, conflicting patent claims, and fierce lobbying by states that hold patents and pharmaceutical companies. Although voluntary licenses and the partial TRIPS waiver that was adopted in 2022 brought about some progress, the overall effect was minimal. Therefore, the COVID-19 crisis revealed how inadequate current IP flexibilities are to address global health emergencies, necessitating more flexible, preventative changes in the application of compulsory licensing.

India’s Actual Approach during COVID-19:

India’s COVID-19 vaccination strategy purposefully avoided the path of mandatory licensing in favour of independence, domestic production, and international collaboration. India used its strong pharmaceutical infrastructure to mass-produce vaccines through voluntary licensing and public-private partnerships, rather than circumventing patents. The cornerstones of India’s vaccination campaign were Covaxin, which was developed domestically by Bharat Biotech, and Covishield, which was manufactured by the Serum Institute of India under license from AstraZeneca. Both products were granted emergency approvals. The government facilitated regulatory flexibility to speed up foreign vaccine approvals, including Sputnik V, and provided ₹2,000 crore to scale up Covaxin’s production. In order to promote global IP reform while exercising diplomatic restraint in its domestic implementation of compulsory licensing laws, India simultaneously pushed for a TRIPS waiver at the WTO.

India began a phased rollout in January 2021 to operationalize mass immunization, starting with healthcare workers and progressively reaching all adults. By March 2023, India had efficiently administered more than 2.2 billion doses through the Co-WIN digital platform, which enabled real-time vaccination registration, tracking, and certification. The government achieved high coverage rates by ensuring that over 94% of the eligible population received at least one dose through strategic use of cold-chain logistics, rural outreach, and public awareness campaigns. Authorities addressed supply bottlenecks and affordability concerns by implementing differential pricing models, facilitating raw material imports, and expanding capacity in public-sector facilities.. India’s strategy achieved widespread vaccination without using mandatory licensing, demonstrating a careful balancing act between public health requirements and intellectual property diplomacy.

Challenges to implementing CL for vaccines:

Notwithstanding its legality, a number of systemic, legal, and technical obstacles made the implementation of compulsory licensing (CL) for COVID-19 vaccines much more difficult in reality. The most pressing challenge was the complexity of the science and production of mRNA-based vaccines, like those produced by Moderna and Pfizer. The majority of developing countries lacked the highly specialized infrastructure needed for these vaccines, such as Biosafety Level-3 facilities and proprietary lipid nanoparticles. Reverse engineering without the originator’s implicit knowledge could result in decreased quality or safety even if patents were overridden. Furthermore, a small number of multinational suppliers controlled the global supply chain for essential inputs like sterile filters and bioreactor bags, making it impossible for mandatory licensees to obtain the materials they needed. Since it would take 12 to 18 months to build mRNA production capacity from scratch, CL is an inadequate response to the pressing demands of a pandemic that is spreading quickly.

Procedural and legal barriers further complicated the situation. Multiple overlapping patents—covering delivery platforms, RNA sequences, and stabilizing agents—forced applicants to file several compulsory license requests for a single COVID-19 vaccine product. Moreover, the lack of standardized international licensing frameworks delayed coordinated regional responses, since each country grants compulsory licenses independently. Additionally, TRIPS protects clinical trial data under Article 39.3, which limits access to critical safety and efficacy data and requires generic manufacturers to carry out independent trials, which is a costly and time-consuming process. Political and diplomatic resistance added another layer of difficulty, as high-income countries and pharmaceutical giants fiercely opposed both unilateral compulsory licensing efforts and the broader TRIPS waiver proposal that South Africa and India advanced in 2020. Comparatively speaking, voluntary licensing agreements, like the one between AstraZeneca and the Serum Institute, were quicker, more efficient, and provided essential technical assistance.

Fragmented intellectual property systems, manufacturing bottlenecks, and the lack of enabling international cooperation ultimately limited the implementation of compulsory licensing during COVID-19, even though it remained a theoretically potent tool.

Analysis- Missed opportunity or strategic restraint? 

India’s choice to forego using compulsory licensing (CL) for COVID-19 vaccines demonstrates a sophisticated approach influenced by geopolitical factors as well as operational constraints. On the one hand, there were major logistical difficulties due to the technical complexity of vaccine manufacturing, particularly for mRNA platforms like Pfizer and Moderna. India lacked the specialized infrastructure and Biosafety Level-3 facilities required for the safe and efficient production of mRNA vaccines. Furthermore, the global supply chain for essential raw materials, like lipid nanoparticles and bioreactor components, was severely restricted and primarily dominated by developed countries, making the issuance of a CL both legally feasible and short-term practically ineffective. In its affidavit to the Supreme Court, the government also expressed concern about legal resistance and diplomatic repercussions, claiming that a unilateral CL might postpone vaccine access and jeopardize the larger objective of obtaining a global TRIPS waiver at the WTO.

However, detractors contend that during a national emergency, India lost a crucial chance to demonstrate its sovereignty over public health. In these situations, CL is expressly permitted by Section 92 of the Patents Act, and the courts have already recognized COVID-19 as a qualifying emergency. Prior successes, like Natco Pharma v. Bayer, showed that CL could reduce expenses without stifling creativity. Furthermore, using CL might have put pressure on patent holders to share technical know-how more openly or to negotiate technology transfer agreements more quickly, given that India experienced terrible shortages during the second wave in April–May 2021. CLs for therapeutics were issued by nations like Israel and Hungary, demonstrating that the mechanism could be effective and practical in emergency situations. Furthermore, adopting CL might have accelerated the growth of India’s own mRNA production sector, enhancing long-term resistance to pandemics and their variations.

India chose pragmatism over idealism when weighing short-term results against long-term policy objectives. By 2023, the nation had administered over 2.2 billion doses thanks to a strategic reliance on pre-existing partnerships, public investment in vaccine production, and a focus on quickly deploying Covishield and Covaxin. One could argue that this result exceeded what CL could have accomplished with the same limitations. But the CL controversy exposed structural problems with international IP regimes, such as disjointed patents, reliance on proprietary knowledge, and slow emergency response procedures. Given the urgency of the pandemic, India’s restraint may have been warranted, but the experience highlights the urgent need for infrastructure and legal reforms. In the face of global health emergencies, future preparedness necessitates not only the legal instruments for CL but also a technical, diplomatic, and industrial supporting ecosystem in order to be implemented effectively. 

Conclusion and way forward:

During the COVID-19 pandemic, India chose not to use compulsory licensing (CL) as a practical solution based on operational realism rather than legal or ideological constraints. India chose a strategy based on voluntary licensing, public-sector investment, and international diplomatic engagement, despite the fact that the Patents Act, 1970—more especially, Sections 84 and 92—provided clear statutory grounds for CL during a national emergency and that the judiciary had urged the government to use it. With this strategy, the nation was able to deliver more than 2.2 billion doses of vaccines and attain 88% adult coverage by March 2023, making it one of the biggest immunization campaigns in the world. Nonetheless, the severe shortages that occurred during the Delta wave demonstrated how fragmented IP regimes and vaccine nationalism could impede timely access in low- and middle-income nations. Important lessons were learned from the pandemic experience. First, the lack of rapid manufacturing capacity for mRNA-based platforms, legal complications, and technological limitations limited the practical value of CL. Covishield and other voluntary licensing agreements proved to be quicker and more scalable. Second, while praiseworthy, India’s international support for a TRIPS waiver postponed taking decisive domestic action during times of crisis. Third, direct public investment in infrastructure and vaccine development, including financing to scale Covaxin and assist state-run organizations like Haffkine, showed that non-IP avenues can effectively increase access without getting involved in patent disputes.

India needs to take a multifaceted approach to improve its readiness for the future. In order to diversify vaccine platforms, it should first invest in technologies related to mRNA, viral vectors, and protein subunits. Additionally, it should locate important supply chains for vaccine inputs. Second, CL mechanisms need to be simplified. This includes establishing pre-negotiated royalty rates, implementing automatic triggers for health emergencies, and working with regional patent pools to get around territorial restrictions. Third, global systemic reforms are necessary. India should keep spearheading WTO initiatives to update TRIPS obligations in the event of a pandemic, push for mandatory exemptions from data sharing under Article 39.3, and encourage the establishment of WHO-coordinated manufacturing hubs in the Global South. Lastly, on the home front, creating a national database of patents related to public health and incorporating digital tools like Co-WIN for fair distribution can improve flexibility in the event of future emergencies.

All things considered, India’s COVID-19 strategy showed that diplomatic multilateralism and capacity-building can temporarily counteract the need for mandatory licensing. However, quicker access to more advanced technologies that are outside of India’s current manufacturing landscape might be required in the event of the next global health crisis. India can guarantee that no legal or practical obstacle obstructs the fundamental right to health by updating its intellectual property policies, developing its technological infrastructure, and actively influencing international regulations. India can transform post-pandemic restraint into a robust, forward-thinking public health framework thanks to this well-balanced roadmap.

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