Image: Novartis AG
3 April 2013Asia

India's Novartis ruling: the implications for patent owners

India’s Supreme Court has rejected pharmaceutical company Novartis’s application to patent an updated version of its leukaemia drug Glivec, agreeing with the Comptroller General that it lacked novelty.

The landmark decision sets a precedent that will prevent drugs manufacturers from receiving patents for new versions of existing drugs—a strategy that health organisations and generic competitors claim is often employed by large pharmaceutical companies to delay the release of cheaper, generic versions of their blockbuster drugs.

Therapeutic efficacy

Swiss-based Novartis has been battling against the decision to reject its patent since 2006. The company has held patents for Glivec in some countries since 1993 but did not register its patent in India at this time as there was no product patent system in place.

The company applied to patent an improved beta crystalline version of imatinib mesylate (the drug’s active compound) in India in 1998, claiming that the new formulation was more soluble, more absorbent and had greater thermodynamic stability than the previous version.

In 2005, India’s patent act was amended to include section 3(d), which states that the mere discovery of a new form of a known substance is not patentable unless it improves the “therapeutic efficacy” of the substance. Novartis’s application was rejected by the Comptroller General a year later, on the basis that it did not meet this requirement.

Novartis appealed against this decision, and India’s Supreme Court was asked to decide whether the product qualifies “as a ‘new product’… that has a feature that involves technical advance over the existing knowledge and that makes the invention ‘not obvious’ to a person skilled in the art”.

In a judgment delivered on Monday, April 1, the court concluded that “no material has been offered to indicate that the beta crystalline form of imatinib mesylate will produce an enhanced or superior efficacy … than what could be achieved with imatinib free base in vivo animal model.”

The case is the latest in a series of decisions that have caused concern for major pharmaceutical companies operating in India: in February this year, India's patent office revoked Pfizer’s patent for cancer drug Sutent, agreeing with generics manufacturer Cipla that it lacked inventive step.

A setback or a relief?

In a statement released on Monday, Novartis said the court’s decision will discourage “innovative drug discovery essential to advancing medical science for patients”.

"Novartis has never been granted an original patent for Glivec in India. We strongly believe that original innovation should be recognised in patents to encourage investment in medical innovation especially for unmet medical needs," said Ranjit Shahani, vice chairman and managing director of Novartis India Limited.

"We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs. This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options,” he added.

But Unni Karunakara, president of humanitarian organisation Doctors Without Borders, said it is “a huge relief for the millions of patients and doctors in developing countries who depend on affordable medicines from India”. India’s generic drugs market is worth £17 billion.

“The Supreme Court's decision now makes patents on the medicines that we desperately need less likely. This marks the strongest possible signal to Novartis and other multinational pharmaceutical companies that they should stop seeking to attack the Indian patent law,” added Karunakara.

Encouraging innovation

Prathiba Singh, a lawyer for generics manufacturer Cipla, which challenged Novartis’s patent for Glivec, told WIPR that the ruling will likely encourage companies to innovate instead of focussing on patenting minor variations of existing drugs.

“Generic companies in India will also start focussing not merely on making generics, but also on how to keep prices low and start innovating. This may increase collaborative ventures with universities, and educational institutions, [and] the government may start looking at policies to encourage innovation,” he said.

While the ruling may lead to a greater availability of cheaper medicines, Singh pointed out that this is purely incidental and did not form the basis of the court’s decision.

“There is enormous confusion created by sections of the media that if Glivec has been patented in more than 40 countries, why has India refused to grant a patent? This misses the basic point,” he said.

“The question before the Supreme Court was whether the patent applied for in 1998 for the beta crystalline form was novel and obvious over what was disclosed in 1993 … the court has, in this context held that the beta form with these claimed properties does not qualify for a patent as there is no impact on ‘therapeutic efficacy’.”

Western  worries

While Singh believes Monday's judgment will stimulate innovation, Gary Moss, a solicitor and partner at EIP, said it will make it much harder for Western companies to enforce pharmaceutical patents in India, which may lead to decreased investment.

“It will certainly disincline [pharmaceutical companies] to conduct original research in that jurisdiction or to locate their research facilities there, since gaining protection for their investments will become a whole lot harder,” he said.

Moss highlighted India’s perceived perspective on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires all signatory states including India to protect pharmaceutical inventions, as key to interpretating the court’s ruling.

“The decision will come as a disappointment to those Western governments and institutions which struggled long and hard to see TRIPS enacted – if the line adopted in this judgment is followed in other jurisdictions, it would appear that the effect of TRIPS will be of far more limited application than was generally thought at the time,” he said.

“In reaching its decision, the Supreme Court made detailed reference to the fierce opposition to the legislation to implement TRIPS when it was put before the Indian Parliament in 2005 [and] the fact that this opposition was based in large measure on the fear that many people throughout the world would be deprived of potentially useful medicines and the damage which would potentially be caused to the Indian pharmaceutical industry, which even at that time supplied a large part of the world with those medicines,” he added.

Moss also said the ruling is "good news for India’s pharmaceutical industry, which  appears set to continue to be the source of a large proportion of the drugs used in developing countries, albeit that many of them will be copied from drugs previously developed and marketed in the West."

US investigations

Moss is not alone in his concerns, and US organisations have also been quick to criticise the Indian court’s decision.

In a statement released on Monday, the Pharmaceutical Research and Manufacturers of America (PhRMA) said it is “very disappointed” with the ruling.

“This decision marks yet another example of the deteriorating innovation environment in India. Innovation is critical in meeting unmet needs of patients and is particularly relevant in the context of changing healthcare systems.

“In order to solve the real health challenges of India’s patients, it is critically important that India promote a policy environment that supports continued research and development of new medicines for the health of patients in India and worldwide,” said president and chief executive John Castellani.

The office of the United States Trade Representative has since confirmed it will be reviewing the court’s decision.

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