[A2k] Bridges Weekly: Novartis Patent Challenge Dismissed in India

[Thiru Balasubramaniam]

<SNIP>

However, Felix Addor, Deputy Director General of the Swiss Federal
Institute of Intellectual Property, said "the issue of a WTO panel is
not on the agenda of the Swiss Government at this point of time".
Meanwhile, Indian Commerce and Industry Minister Kamal Nath insisted
that "Our patent laws are WTO compliant".

http://www.ictsd.org/weekly/07-09-05/story3.htm

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Volume 11 =09Number 29 =095 September 2007

NOVARTIS PATENT CHALLENGE DISMISSED IN INDIA

Pharmaceutical giant Novartis saw its challenge to Indian patent law
dismissed in the Chennai High Court on 6 August. The multinational had
filed the suit after the Indian authorities denied it a patent on
Glivec, a cancer medicine, in January 2006, thus allowing the
production of cheap generic copies of the drug to continue freely.

The stringent standards of patentability upheld by the court mean that
fewer medicines will be eligible for patents. This in turn broadens the
scope for the production of generic drugs.

The decision was welcomed by health activists, who had warned that an
expansive interpretation of patent eligibility would have stopped India
from producing inexpensive medicines for the world's poor. "This is a
huge relief for millions of patients and doctors in developing
countries who depend on affordable medicines from India," said Tido von
Sch=F6n-Angerer, director of the M=E9decins Sans Fronti=E8res (MSF) campaig=
n
for access to essential medicines.

But Novartis announced it would divert research and development (R&D)
funding planned for India to China instead. Daniel Vasella, the Swiss
multinational's CEO, said: "This [ruling] is not an invitation to
invest in Indian research and development, which we would have done. We
will invest more in countries where we have protection. It's not a
punishment. It's just a question of the culture for investment."

The court reaffirmed a section of Indian patent law requiring
inventions to be significantly improved before they can be eligible for
another patent, a clause designed to counter the undue prolongation of
patent terms through only minor tweaking. It said it did not have
jurisdiction to rule on whether this was compliant with the WTO
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS), as Novartis had charged.

The case followed the Chennai Patent Office's rejection of Novartis'
patent application for the beta crystal form of cancer drug imatinib,
marketed as Glivec (or Gleevec in the US). The office said it did not
satisfy legal requirements for 'novelty' and 'inventive step', two of
the main criteria used to evaluate patent applications. Novartis,
however, had been granted the patent in almost 40 other countries,
including China. Consequently, Novartis took its case to the Chennai
High Court in May 2006, appealing the decision and challenging the
Indian Patent Act (BRIDGES Monthly Review, Feb-Mar 2007).

The crux of the Patent Office's argument rests on Section 3(d) of the
Indian Patent Act, which denies patentability to "a new form of a known
substance" unless it results in "enhancement of the known efficacy of
the substance". Brought in with the 2005 legislation that made Indian
patent law compliant with the WTO TRIPS Agreement, the clause was
intended to stop patent "evergreening", whereby minor changes to
already-patented molecules are used as a basis for acquiring fresh
patents and hence extended periods of protection. These, in turn, delay
the entry of generic competitors into the market.

Indian Health Minister Anbumani Ramadoss said in April that the
government was "very concerned" that the case's outcome might restrict
India's ability to produce medicines cheaply. Along with former Swiss
President Ruth Dreifuss, Archbishop Desmond Tutu, and members of the
European Parliament and the US Congress, Ramadoss was among the nearly
half a million people who signed an MSF petition urging Novartis to
drop the case.

MSF, which purchases 84 percent of the AIDS drugs it distributes from
Indian generic producers, said that "a ruling in favour of the company
would have drastically restricted the production of affordable
medicines in India that are crucial for the treatment of diseases
throughout the developing world" because the Novartis challenge became
a test case for Section 3(d).

How to define "enhancement of efficacy"?

The original form of imatinib, developed in 1992, cannot be patented in
India since pharmaceutical products were ineligible for such protection
there until 1995. The 'beta crystalline' form of the molecule was
developed for patients to take as a pill and launched as Glivec in
2001.

As a developing country, India was not required to fully comply with
TRIPS rules, which include pharmaceutical product patents, until 2005.
In the interim, however, it introduced a temporary system of 'exclusive
marketing rights' for new products that would then be considered for
patents with the advent of full TRIPS compliance. When Novartis was
granted one of the first such exclusive marketing rights, for Glivec in
November 2003, the price increased from $230 to $2,740 per year.

After India reformed its patent laws to make them compliant with WTO
rules in 2005, Novartis was refused a patent for Glivec on the basis
that the beta crystalline form did not provide a significant enough
"enhancement of efficacy" of the original imatinib molecule. Novartis
responded with a writ to the High Court appealing against the ruling.
It argued that Section 3(d) of the Indian Patent Act was
"unconstitutional as it is vague, arbitrary and violative of Article 14
of the constitution (right to equality)", and alleged that it
contravened India's obligations under the TRIPS Agreement.

Defending the patent-worthiness of Glivec, Novartis research chief Paul
Herrling said "medical progress occurs through incremental innovation.
If Indian patent law does not recognise these important advances,
patients will be denied new and better medicines".

A different view came from Brian Druker, the key researcher behind
imatinib. Most scientists he worked with are "primarily motivated by
the pursuit of knowledge as a means to help patients," he said, and "it
is, therefore, of great concern that the results of their efforts can't
reach patients and save lives because of pricing strategies and patent
policies such as 'patent evergreening'=85 used by partners further down
the drug development process."

India attempts to differentiate genuine innovation from evergreening by
using the "enhancement of efficacy" concept, says Health GAP's Brook
Baker, a professor at Northeastern University. However, the definition
of "enhancement of efficacy" remains unclear. The High Court suggested
only that efficacy can be defined as "the ability of a drug to produce
a desired therapeutic effect." It did not provide any guidance on how
enhancements might be quantified, such as in terms of fewer
side-effects or lower dosages.

Novartis maintains that Glivec boosts bioavailability (i.e. the degree
to which the drug is absorbed by the patient) by 30 percent over the
original form of imatinib, which should constitute an enhancement of
efficacy. The Chennai Patent Office disagreed in rejecting the
application, but more guidance to the definition may be provided during
Novartis' appeal, which has been referred to the Indian Patent and
Trademark Appellate Board (IPAB).

Tahir Amin, director of the Initiative for Medicines, Access and
Knowledge (I-MAK), told Bridges that "the real issue lies in how the
IPAB will define efficacy. This is what will determine the scope of
patenting in India and thus the extent to which incremental innovations
will be protected".

TRIPS compliance unlikely to surface at WTO

The Chennai High Court declined to rule on Novartis' assertion that
Section 3(d) of the Indian Patent Act contravened TRIPS rules, saying
it had no jurisdiction to rule on international treaties. In effect, it
said that only the WTO was fit to make that decision.

If Novartis wants the WTO to rule on the matter, it will have to
persuade the Swiss government to bring a case against India at the
global trade arbiter's headquarters in Geneva.

However, Felix Addor, Deputy Director General of the Swiss Federal
Institute of Intellectual Property, said "the issue of a WTO panel is
not on the agenda of the Swiss Government at this point of time".
Meanwhile, Indian Commerce and Industry Minister Kamal Nath insisted
that "Our patent laws are WTO compliant".

In a press release issued after the court announced its decision,
Novartis asserted that "during the India Trade Policy Review in late
May 2007, the WTO urged India to strengthen its intellectual property
rights system. It commended India for taking steps to align its
national standards with international requirements but added that
'effective implementation of IPR-related legislation would be in the
interest of India itself'."

Professor Baker said that Novartis had quoted selectively from a
summary of individual Members' comments on the review, and that the
extensive report itself contained "no discussion even questioning the
legality or TRIPS-compliance of the India Patent Act generally or of
section 3(d) in particular".

Baker also found it unlikely that Novartis had changed its R&D
investment strategy on the basis of the court's ruling. He told Bridges
that "it's virtually impossible to imagine this decision [to shift
investment to China] turned on Section 3(d)" given the other business
conditions taken into consideration, such as the low cost of clinical
trials and researchers.

According to Indian press reports, at least a dozen large international
pharmaceutical companies have invested heavily in the country since the
amendment of the Patent Act in 2005.

ICTSD Reporting; "Indian Law on Generic Drugs is Upheld," INTERNATIONAL
HERALD TRIBUNE, 6 August 2007; "Novartis Case May Not Reach WTO,"
HINDUSTAN TIMES, 8 August 2007; "Don't Abuse Patents: Scientists," LIVE
MINT, 15 August 2007; "Novartis to move Indian R&D," FINANCIAL TIMES,
21 August 2007; "MNCs Still Bullish on India R&D," BUSINESS STANDARD,
27 August 2007.

---------------------------------
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org