Global Health and Patents: Rare Diseases and Orphan Drugs: Part II

Dalaisha Aggarwal
Nov 4
8 min read

In part I, we discussed about the concept of rare diseases and orphan drugs, why is it important to discuss them in the context of Intellectual Property Rights (IPR) and how the orphan drugs exploit patent law. In part II, we'll explore the Indian position on such orphan drugs, and how the regulatory framework may be modified to balance the needs of society and pharma companies.

Indian Position on Orphan Drugs and Rare Diseases

The Indian Council of Medical Research has reported that around 70 million Indians suffer from approximately 450 rare diseases. The Drugs and Clinical Trial Rules, 2019, define orphan drugs as “intended to treat a condition which affects not more than five lakh persons in India”. In light of the alarming trend of non-availability of affordable orphan drugs, the Dr. Renu Swarup Committee was constituted by the government in 2021. The committee highlighted that the prices for drugs and therapies in the case of rare diseases are “extremely exorbitant”. It recommended switching to sustainable alternatives, including the localisation of production and public-private partnership for R&D. Such measures will lead to the availability of generic drugs in the market, thereby diluting the price monopoly of pharma companies and increasing the affordability of life-saving drugs.

Based on the committee's suggestions, the Indian government introduced the National Policy on Rare Diseases, 2021 (NPRD), to address various challenges related to the treatment of rare diseases and their cost efficiency. It proposes measures aimed at lowering the prevalence of rare diseases through comprehensive screening and awareness programmes and to enhance access to affordable healthcare. It categorises rare diseases into three:

Group 1- diseases demanding one-time treatment.
Group 2- diseases requiring long-term treatment with low costs.
Group 3- diseases requiring long- term treatment with high costs.

In the NPRD, the government has extended financial support up to INR 50 lakhs for treatment and has enabled a digital portal for crowdfunding and voluntary donations, especially from corporate agencies.

In an attempt to promote indigenous drug manufacturing and thereby increase affordability, the Ministry of Finance issued a circular in 2024 inviting tenders up to INR 200 crore for the manufacture of 127 orphan drugs. The government has also recently announced the first four locally produced medicines for such rare diseases. The ICMR, too, has taken positive steps by encouraging local pharma and biotech companies to develop medicines for “priority rare genetic disorders.” While the governmental measures are welcoming, they face challenges such as adequate enforcement and follow-ups. For instance, while the Indian pharmaceutical industry is predicted to cross USD 100 billion in 2025, in the case of rare diseases, governmental approval for orphan diseases is severely lagging. Recent government publications fail to stipulate concrete policy steps to tackle the challenge of rare diseases. For instance, while the NPRD had advocated the feasibility of homeopathy as a suitable alternative to allopathic medicines in the treatment of rare diseases, the Ministry of AYUSH policy documents fail to shed light on what, how, and when such alternatives may be introduced as replacements.

Indian Judiciary on the Affordability of Orphan Drugs

The above-mentioned governmental measures are in response to a call from the Indian courts to boost accessibility of orphan drugs at normal prices. In 2014, in Mohd Ahmed v. Union of India, 2014 SCC OnLine Del, 1508, the petitioner was suffering from a life-threatening rare genetic disease called “Gaucher’s disease”. The only treatment available was the patented Enzyme Replacement Therapy at an exorbitant price of INR 37 lakhs per month. The petitioner’s father was a rickshaw puller and could not afford the expensive medicine. The court interpreted the facts in light of Article 21 of the Constitution, noting that every citizen has a fundamental right to affordable and convenient healthcare. It held that it is a non-derogable, core obligation of the state to guarantee this right, irrespective of financial constraints. The court observed that, “After all, health is not a luxury and should not be the sole possession of a privileged few.” The court issued a direction to the Delhi government to provide the petitioner the enzyme replacement therapy at AIIMS free of charge as and when required.

This was similarly held by the Calcutta High Court in Adrija Mudi v. Union of India, 2020 SCC OnLine Cal 3106, where the court observed that the government is duty bound to treat all patients with dignity, keeping in mind that those suffering from rare diseases “are equally entitled to the right to life worth the name, on an equal footing with more advantaged people of the society”.

In a landmark decision, the Delhi High Court in Master Arnesh Shaw v. Union of India, 2024 SCC OnLine Del 7114, dealt with the complexities surrounding orphan drugs, restrictions on availability, their affordability, and the working of patents in favour of public interest. The court held that to distinguish between patients suffering from more prevalent diseases with those suffering from rare diseases would amount to discrimination in violation of Article 14 of the Constitution. Exorbitant prices of orphan drugs should not interfere with the right of patients, particularly children, to receive adequate treatment simply because they are in the minority. This would contradict the foundational principles of a model society: that every individual has the right to the same level of care and consideration. This is also in line with India’s commitments under international treaties, including the International Covenant on Economic, Social and Cultural Rights, the Universal Declaration of Human Rights, and the Convention on the Rights of the Child.

The court noted that under Section 84 of the Patents Act, 1970, the patented medicines must be made available at reasonable prices and must satisfy the “reasonable requirements of the public”. This refers to the “working” of a patented invention in India and empowers the Controller to extend “compulsory licenses” in favour of a third party who has the infrastructure to operationalise the patented invention in India. In case of rare diseases, if the therapies and medicines are not affordable at reasonable prices, the government is empowered under Section 100 to use and permit the manufacturing of medicines by a third party after payment of a royalty. Under Section 102, the government is also permitted to acquire patents and inventions. Thus, while the companies are exempted from price control, they are duty-bound to make the drug available and affordable to the Indian public. In contrast, however, the court complained about the condition in case of rare diseases: while the medicines are patented in India, they are not manufactured or properly distributed here and are exorbitantly priced. The court held that “the position cannot continue in this manner” and directed state intervention.

The leading case on the grant of compulsory licenses in India is Bayer Corporation v. Union of India, MANU/DE/1756/2009. Here, “Nexaver”, a drug patented by Bayer, was necessary for the treatment of liver and kidney cancer, but cost around INR 3 lakhs. Natco Pharma made an application to produce the same dosage of the medicine at INR 10,000, thereby satisfying the reasonable requirements of the public to have access to necessary medicines at affordable prices. The court allowed the application, in exchange of Natco paying a 6% royalty fee to Bayer. For a further analysis of the case, you can refer to our post on the subject here.

During the COVID’19 pandemic, access and distribution issues for vaccines and life-saving medicines due to exorbitant pricing emerged at the forefront of discussions. Developing nations, including India, engaged in mass manufacturing of medicines through the grant of compulsory licenses. In October 2020, India and South Africa had submitted a joint application before the WTO demanding a “Waiver from certain provisions of the TRIPS for the prevention, containment and treatment of COVID’19”. This application temporarily halted the enforcement of patent rights to allow the domestic production of COVID’19 treatment. This led to the widespread production of drugs such as Remdesivir and Tocilizumab and vaccines. However, there was a backlash against India from the global pharmaceutical industry, as such widespread grant of compulsory licenses resulted in dilution of the patent monopoly of pharma companies.

In this backdrop, as discussed in our previous post, the Patent (Amendment) Rules, 2024, have diluted the measures against evergreening of medicines, contrary to the objective of ensuring adequate access. By way of an amendment to the 2003 Rules, instead of the yearly financial reporting on the working of the patented invention, the patentee is now required to submit a working statement only once in 3 years. This is detrimental to the affordability of public health as it excludes potential licensees from access to the necessary information on the working of the invention. This leads to speculation of the patent rules now tilting in favour of pharma companies, putting the poor patients at risk of unaffordable healthcare.

However, recently, in F. Hoffmann-La Roche AG v. Natco Pharma Limited, 2025 SCC OnLine Del 1826, the court was dealing with an application for an injunction against the unauthorised sale of a drug similar to “Risdipam”, the only medicine available for the treatment of a rare disease, “SMA”. The court observed that “A drug which is the only one available for treatment in India, for a rare disease, its availability to the public at large at very economical and competitive prices, is a material factor.” Here, the public interest would outweigh the grant of an injunction.

Conclusion

There is a constant tussle between equity and affordability in the case of orphan drugs. While pharma companies that invest billions in drug development must be able to recoup their investments and generate a profit, patients suffering from rare diseases must have access to affordable healthcare. To ensure a balance, governments may adopt a “data exclusivity” model as opposed to a “market exclusivity” patent. In case of the former, the data submitted by the applicant to the Registrar may be kept confidential for a stipulated period (usually, four years) to delay the entry of biosimilars in the market. During this period, the treatment expenses will be supported by the government under the NPRD. This will ensure that pharma companies can generate profits through their monopoly. After the exclusivity period is over, generic drugs may be developed at affordable prices.

However, a data exclusivity model presents its own risk. In low and middle-income economies, health inequities may be amplified through restrictions on access to life-saving medicines, despite government support, because of bureaucratic hurdles and rampant corruption. Similarly, the model restricts access to the clinical trial data for generic manufacturers to develop their counterparts. Apart from restricting the development of affordable medicines, it may be unsafe to undertake development procedures in the absence of such necessary information, such as the number of lives lost in the clinical trials. Data exclusivity would extend the market monopoly even in the absence of patent protection over the orphaned drugs. Therefore, governmental intervention becomes crucial in incentivising the development of orphaned drugs while balancing the interests of patients suffering from rare diseases. The NPRD has been laid out as a skeleton policy framework, and the onus lies upon the elected representatives to give it form. There is an urgent call for the government to impose strict enforcement norms, popularise compliance rewards, and boost infrastructural requirements for the growth of indigenous medicine production. For this, the government may introduce subsidies and tax incentives. Newborns may be subject to a screening programme for early detection and treatment. India can also promote the treatment of orphan diseases through homeopathy and ayurveda, which have relatively fewer side effects and are cheaper than traditional allopathic treatments.

References:

Global Health and Patents: Rare Diseases and Orphan Drugs: Part II

Indian Position on Orphan Drugs and Rare Diseases

Indian Judiciary on the Affordability of Orphan Drugs

Conclusion

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