In the scenario of relative inaccessibility, unaffordability or non-availability of essential life-saving medicines, most of which had to be imported, the committee recommended the provision of process patenting system of drugs. Thus, the Patents Act, 1970 abolished product patents for food and pharmaceuticals and restricted grant of patents in these fields only to process patents. Simultaneous passage of Drug Price Control Order in 1970 gave greater governmental control over drug prices.

The term of process patents was restricted to 7 years from the date of application or 7 years from the sealing of patent against 14 years from the date of application for other fields. It provided for “automatic compulsory license” or “license of right” by which anyone is free to practice an invention, if it is in public interest.

According to Gopakumar G. Nair, former president, Indian Drug Manufacturers’ Association (IDMA), “The Patents Act 1970 incorporated very well thought out, highly effective, safe-harbor provisions, though considered controversial in the global context, for early generic introductions of patented New Chemical Entities (NCEs) in India and essential life saving medicine based on them.”

This was great stimulus for the Indian pharmaceutical industry, which from 1970 to 1995 went about developing innovative processing methods for manufacturing patented NCEs. Because of process patenting, it became possible to develop economic versions of therapeutically equivalent generics to a number of patented drugs. This “reverse engineering” initiative enabled India to be nearly self-sufficient in manufacturing of patented drugs. Once the international patents for these drugs expired, India moved aggressively into the international market with generic drugs, thus becoming a substantially large manufacturer and exporter of bulk drugs/active ingredients with its vibrant generic drug industry. India became a net exporter of pharmaceuticals, occupying the 3^rd largest position in terms of volume and 14^th largest in terms of value. With the effective amendment of Indian Patent Law in 1970, India moved from being a huge importer of exorbitantly costly essential medicines to becoming a self-reliant manufacturer and exporter of life-saving medicines.

Introduction of IP agenda during the Uruguay round of GATT talks in 1986, and the later Dunkel Draft, evoked concerns about the future of the Indian pharmaceutical industry. There were fears of escalating drug prices initially, largely because of misconception and lack of awareness of the IP system.