Kerala HC says exorbitant drug prices can trigger Section 100; leaves final decision to Centre

As per the latest business developments, The Kerala High Court on Monday held that the Central government can invoke Section 100 of the Patents Act when exorbitant pricing makes life-saving drugs inaccessible, significantly broadening the interpretation of a provision that has rarely been tested in Indian courts.

At the same time, the court stopped short of directing the government to immediately invoke the provision for patented breast cancer drugs, instead asking it to study affordability and take a policy decision.

The judgment arose from a petition filed in 2022 by a retired bank employee suffering from HR-positive, HER2-negative breast cancer who was unable to afford ribociclib, a patented therapy costing tens of thousands of indian indian rupee terms every month. After the petitioner died during the pendency of the case, the High Court converted the matter into a suo motu public interest case on the broader offering of access to life-saving patented medicines.

The court first rejected the Centre's argument that the cheaper generic drug palbociclib could serve as an alternative to ribociclib. Relying on expert opinions, Justice Harisankar V. Menon held that "Palbociclib and Ribociclib are not interchangeable," noting that palbociclib is primarily used for advanced or metastatic breast cancer while ribociclib is additionally used in early-stage disease.

Section 100 for public purpose

That stated, the most significant part of the judgment concerns Section 100 of the Patents Act, which empowers the government to use patented inventions for public purposes.

Until now, both the government and pharmaceutical firms had argued that Section 100 could be invoked only when the government itself needed to use a patented invention for a departmental or governmental purpose. The court rejected that narrow interpretation.

Referring to subsections allowing the government to manufacture or authorise others to manufacture patented products and sell them on a non-commercial basis, the court held:"the provisions under Section 100 would include the entitlement of the Government to use the patent or invention for manufacturing the medicine covered by the patent and sell the same on a non-commercial basis to a person who can be none other than the needy patient."

The court further linked Section 100 to the state's constitutional obligations under Articles 21 and 47 relating to the right to life and public health. It ruled that "the provisions of Section 100 of the Act are required to be invoked in circumstances where the Government is required to intervene, such as when the medicine is unaffordable on account of its exorbitant price."

According to Maitreyi Sachidananda Hegde, the amicus curiae appointed by the court, the judgment establishes an important legal principle even though immediate relief was not granted. She stated the ruling is a "milestone judgment" because it clarifies that Section 100 can be used in cases involving excessive drug prices and public health concerns.

Yet the court ultimately refrained from ordering immediate invocation of Section 100. Instead, it held that such a decision stays a matter of government policy. It directed the Centre to gather data on the number of patients affected, medicine usage, cases where treatment was forgone because of cost, and the effectiveness of existing subsidy schemes before deciding whether intervention is necessary.

The judgment does not prescribe any timeline for completing this exercise, a gap that campaigners fear could prolong delays in access to treatment. Speakers at a briefing on the verdict described the outcome as a "partial victory", arguing that while the court made crucial legal declarations, affordability concerns stay unresolved until the government acts.

In its concluding observations, the court noted that no patient should be denied treatment solely because of financial constraints and called upon the government, industry and society to strike a balance between affordable access to medicines and incentives for innovation.