[Ip-health] New York Times: Setback for Novartis in India Over Drug Patent

[Thiru Balasubramaniam]

August 7, 2007
Setback for Novartis in India Over Drug Patent
By AMELIA GENTLEMAN

NEW DELHI, Aug. 6 =97 Indian companies will be free to continue making
less expensive generic drugs, much of which flow to the developing
world, after a court rejected a challenge to the patent law on Monday.

Aid organizations declared the ruling a victory for the =93rights of
patients over patents,=94 but the Swiss drug company Novartis, which
filed the case, warned that the ruling would discourage investments in
innovation and would undermine drug companies=92 efforts to improve their
products.

In the case, brought last year, Novartis asked the High Court in Madras
to clarify a key element of India=92s 2005 patent legislation, arguing
that it violated trade rules and breached the Indian Constitution.
Indian law says a drug qualifies for a patent when it is a new
invention or a significant improvement to an existing one. The law
denies patent protection to new versions of drugs invented before 1995.

Novartis sought to determine whether an Indian court had been right to
deny a patent on a modified form of the Novartis leukemia drug Gleevec,
known in Europe and India as Glivec. The application was rejected on
the grounds that the new drug was insufficiently different from the
previous version.

Novartis argued that the section of the law prohibiting patents for any
drug that is an =93incremental innovation=94 violated the World Trade
Organization=92s agreement on trade-related aspects of intellectual
property rights.

If the Madras court had ruled the other way, the decision could have
set an important precedent that might have allowed other international
companies to receive patents on modified versions of existing
medicines, thereby extending the period of their exclusive right to
produce the drug. Such drugs account for most of the estimated 9,000
patent applications waiting for approval in India, according to Doctors
Without Borders, which warned that such a ruling would have resulted in
a =93shutdown of the pharmacy for the developing world.=94

Indian companies provide 84 percent of the drugs to fight H.I.V. and
AIDS that Doctors Without Borders supplies to patients worldwide. They
also provide more than 25 percent of other essential drugs used by the
organization.

Other relief programs are equally dependent on Indian-manufactured
products.

Indian companies would have been prevented from manufacturing generic
versions of Gleevec, which they sell domestically and internationally
for about a tenth of what Novartis charges. The Swiss company charges
$2,600 for a month=92s worth of the drug.

This could have left large numbers of patients without access to the
cancer treatment, and the precedent created would have prevented the
manufacture of many other drugs that Indian companies produce at a
fraction of the cost of the brand-name originals.

The full text of the judgment was not immediately released, but
according to Reuters, which attended the ruling, the judge said the
court had no jurisdiction to decide whether Indian patent laws complied
with the W.T.O. guidelines on intellectual property law.

The international pharmaceutical industry and global relief
organizations have been scrutinizing this long-running case, aware that
the ruling would have profound implications for their work.

=93This is a huge relief for millions of patients and doctors in
developing countries who depend on affordable medicines from India,=94
Tido von Schoen-Angerer, director of the essential medicines campaign
at Doctors Without Borders, said in a statement released by the
organization.

Novartis said in a statement that the case would =93have long-term
negative consequences for research and development into better
medicines=94 that could benefit people in India and other nations.

=93It is clear there are inadequacies in Indian patent law that will have
negative consequences for patients and public health in India,=94 said
Paul Herrling, head of research at Novartis. =93Medical progress occurs
through incremental innovation. If Indian patent law does not recognize
these important advances, patients will be denied new and better
medicines.=94

Officials from Novartis said they were awaiting the release of the full
text of the ruling =93to better understand the court=92s decision.=94

Dr. Ranjit Shahani, a vice chairman of Novartis, said in a statement:
=93We disagree with this ruling, however we likely will not appeal to the
Supreme Court.=94

A spokeswoman for the company said Novartis thought it had =93advanced
the debate=94 with this court case and now wanted to combine forces with
other interested parties to continue its campaign.

Novartis is awaiting a ruling in a separate case before the
intellectual property rights appellate board in Delhi, appealing the
earlier decision not to grant a patent for the modified form of
Gleevec.

The position of the Indian government became clear in April when the
health minister, Dr. Anbumani Ramadoss, said that the government was
=93very concerned=94 that the challenge by Novartis would restrict India=92=
s
ability to produce cheap AIDS drugs.

The head of the Mumbai cancer patients=92 support group, Y. K. Sapru,
welcomed the decision.

=93This is a very major victory domestically and internationally,=94 he
said. =93India has a $5 billion pharma industry, and 65 percent of those
drugs are sold to the developing world and poorer people in the
developed world. All that would have been suspended if the judgment had
gone the other way, and there would have been a dearth of affordable
drugs. That calamity has been prevented.=94

Yusuf Hamied, chairman of the Indian pharmaceutical company Cipla, also
described it as a positive ruling.

=93If Novartis had won, this would have been a tremendous setback for
us,=94 he said. =93I am willing to pay a royalty on a new invention, but I
am against monopolies. This would have increased monopolies, which
would have meant higher prices.=94

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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