EVERGREENING:
“Evergreening” refers to the practice whereby pharmaceutical firms extend the patent life of a drug for next 20 years only by minor reformulations or other iterations without necessarily increasing the therapeutic efficacy.
- Evergreening allows a prolonged monopoly that unfairly denies the public access to medicines at equitable prices.
- In 2013, Supreme Court refused to grant a new patent to Swiss Company Novartis for its Leukaemia drug Glivec as the drug was not substantially different from original one.
- It was case of Evergreening.
INDIAN PATENT ACT AND EVERGREENING:
- As per Section 2(1) (ja) of the Patents Act, the product in question must feature a technical advance over what came before.
- Section 3(d) necessitates a demonstration of improvement in its therapeutic efficacy.
- Section 3(e) ensures that patents for combinations of known substances are allowed only if there is synergistic effect.
- So, Indian Patent Act after 2005 amendments under TRIPS regime does not allow Evergreening.
EVERGREENING IN BANKING:
- Financial practice of extending additional loans to borrower who is unable to repay the existing loans.
- The main objective of Evergreening is to hide the status of Non Performing Asset (NPA).
- Evergreening creates false impression of quality of the assets and the profitability of the banks which delays the identification and hence resolution of the stressed assets.
- Loan evergreening may provide temporary relief, but it can negatively impact banks’ performance and the entire economy over some time.
