In order to ensure that drug companies cannot play with the lives of patients (for instance by either stopping the sale of a drug or making it incredibly expensive) - the Indian Patents Act incorporates various safeguards that can be used to protect public health. These range from measures such as the issuance of compulsory licenses to ensuring a higher bar for patenting of pharma products (as demonstrated in the Novartis case). Without these measures, many vital drugs could become virtually unobtainable for an ordinary citizen of India and could leave patients to the whims of the private corporation producing the relevant drug.
The Indian Government, in a move that has lead to serious criticism, has apparently given a private assurance to the US that it will not issue any new compulsory licenses (to date India has issued 1 such license). This follows years of pressure by the US government on India to relook its patent regime in order to make it easier for MNCs to gain greater and greater profits in the country.
The step taken by the Government of India is clearly a move that goes against the interests of the Indian citizen and is questionable in that there seems to be no obvious benefit to India from adopting such a stance. Keep in mind the tremendous goodwill India gained in the international community for the tremendous work done by its generic drug companies to combat the AIDS crisis in Africa. Rather than use its unique geo-political position to advocate the right to affordable medical care, the Indian government appears to be on a path to give up the hard won TRIPS flexibilities that permit countries to tailor their IP regimes to suit domestic public health needs.