[Ip-health] Novartis press release: Novartis concerned Indian court ruling will discourage investments in innovation needed to bring better medicines to patients

[Thiru Balasubramaniam]

http://www.novartis.com/newsroom/

<SNIP>

"It is clear there are inadequacies in Indian patent law that will have
negative consequences for patients and public health in India," said
Paul Herrling, Ph.D., Head of Corporate Research at Novartis. "Medical
progress occurs through incremental innovation. If Indian patent law
does not recognize these important advances, patients will be denied
new and better medicines."


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06/08/2007, 2007, 10.59 AM CET

Novartis concerned Indian court ruling will discourage investments in
innovation needed to bring better medicines to patients


     * Court dismisses Novartis petition challenging constitutionality
of Section 3(d); defers to World Trade Organization (WTO) to resolve
question on TRIPS compliance
     * WTO recently urged India to improve its intellectual property
system during Trade Policy Review
     * Glivec patent appeal not decided; Intellectual Property Appellate
Board (IPAB) review continues as separate proceeding


Mumbai, India, August 6, 2007 - A decision issued today in an Indian
court will have long-term negative consequences for research and
development into better medicines for patients in India and abroad.

The High Court in Chennai dismissed the writ petition challenging the
constitutionality of Section 3(d), and deferred to the World Trade
Organization (WTO) forum to resolve the TRIPS compliance question. The
full text of the Court's decision is not yet issued.

"We disagree with this ruling, however we likely will not appeal to the
Supreme Court. We await the full decision to better understand the
Court's position," said Ranjit Shahani, Vice-Chairman and Managing
Director, Novartis India Limited. "Our actions advanced this essential
debate in India; now local and international leaders in both industry
and academia recognize the inadequacies of Section 3(d) and are raising
serious concerns about the deficiencies of the Indian patent system."

Novartis brought this case forward because it firmly believes this was
the right thing to do for patients. Effective patent systems ensure
incentives are in place that stimulate long-term research and
development efforts critical for medical progress.

"It is clear there are inadequacies in Indian patent law that will have
negative consequences for patients and public health in India," said
Paul Herrling, Ph.D., Head of Corporate Research at Novartis. "Medical
progress occurs through incremental innovation. If Indian patent law
does not recognize these important advances, patients will be denied
new and better medicines."

WTO recently urged India to improve its intellectual property system
Unlike other WTO member countries, India has a unique provision in its
patent law, Section 3(d). This provision excludes important
developments in the form of incremental innovation, and ignores the
importance of side effects, ultimately denying patients in India new
and better medicines.

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."

Novartis originally filed the appeal in India because the Indian patent
office rejected the Glivec patent application. "Because the patent
rejection was based on Section 3(d), we challenged this specific
provision in India," said Shahani. "We had hoped to resolve this
question on Section 3(d) locally in order to receive a patent for
Glivec."

Glivec patent appeal not yet decided
Still at issue is why a patent for Glivec - granted in nearly 40
countries, including Russia, Taiwan and China - was denied in India in
2006. The Glivec patent appeal will be decided separately by the
newly-operational Intellectual Property Appellate Board (IPAB).

At present, Novartis is petitioning the High Court for a new technical
member because the current technical member is the former Controller
General of the Indian Patent Office, responsible for the original
rejection of the Glivec patent.

"We expect the appellate board to conduct an independent and impartial
review of our appeal and ensure transparency of the decision-making
process," said Shahani.

Novartis cares about patients and access to medicine
Through the Glivec International Patient Assistance Program (GIPAP),
Novartis provides Glivec free of charge to 99% of patients in India
prescribed the medicine for as long as they need it.

The Glivec patent case has generated much debate on global access to
medicine. "Some groups have speculated that changing India's patent law
will impact access to medicine. However, eliminating Section 3(d) will
not hinder the supply of medicines from India to poor countries given
the safeguards in international agreements," said Herrling. "In
addition, medicines are made available through tiered pricing
solutions, public-private partnerships, shared contribution models and
donation programs."

Improving access to medicine is an integral component of the Novartis
business strategy and global social responsibility commitment. The
Group's access-to-medicine projects reached over 33 million patients
worldwide in 2006, with contributions totaling USD 755 million.

Further information on Glivec India case and patient testimonials
For more information about the Glivec India case, including
testimonials from Glivec patients in India, please visit
www.novartis.com.

About TRIPS
The WTO Agreement on TRIPS outlines minimum standards for intellectual
property rights, requires member countries to create mechanisms to
safeguard intellectual property, and provides flexibility for
governments to regulate intellectual property rights in the way that
best serves society. For pharmaceutical patents, the flexibilities have
been clarified and enhanced by the 2001 Doha Declaration and the 2003
decision on TRIPS and Public Health, which enabled countries that
cannot make medicines themselves to import pharmaceuticals made under
compulsory license.

About Novartis
Novartis AG (NYSE: NVS) is a world leader in offering medicines to
protect health, cure disease and improve well-being. Our goal is to
discover, develop and successfully market innovative products to treat
patients, ease suffering and enhance the quality of life. We are
strengthening our medicine-based portfolio, which is focused on
strategic growth platforms in innovation-driven pharmaceuticals,
high-quality and low-cost generics, human vaccines and leading
self-medication OTC brands. Novartis is the only company with
leadership positions in these areas. In 2006, the Group's businesses
achieved net sales of USD 37.0 billion and net income of USD 7.2
billion. Approximately USD 5.4 billion was invested in R&D.
Headquartered in Basel, Switzerland, Novartis Group companies employ
more than 100,000 associates and operate in over 140 countries around
the world. For more information, please visit http://www.novartis.com.

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Novartis Media Relations

Svetlana Pinto
Novartis India Media Relations
+91 22 2495 1074 (direct)
svetlana.pinto@novartis.com

Carrie Scott
Novartis Global Media Relations
+41 61 324 3435 (direct)
carrie.scott@novartis.com

e-mail: media.relations@novartis.com

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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