[Ip-health] Novartis story in Frontline Magazine

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http://www.hinduonnet.com/fline/stories/20070223003713100.htm



Patent trouble


                                             SARAH HIDDLESTON


The Madras High Court is set to resume hearing arguments in the case on Nov=
artis' patent application for its cancer drug Gleevec.



 ON January 29, the Madras High Court began hearing arguments on a series o=
f writ petitions filed by the Swiss pharmaceutical multinational Novartis A=
G and its Indian subsidiary Novartis India against the Indian government, t=
he Cancer Patients Aid Association (CPAA) and four Indian generic drug manu=
facturers: Natco, Cipla, Hetero and Ranbaxy. The petitions plead against th=
e rejection by the Chennai Patent Office last year of a patent application =
for Novartis' anti-cancer drug Gleevec and submit that Section 3(d) of the =
Indian patents Act, Patents Act, 1970, which provided one of several ground=
s for rejecting the patent application, is invalid, illegal and unconstitut=
ional.



 In March 2005, India amended its Patents Act to comply with the 1995 World=
 Trade Organisation's (WTO) Trade-Related Aspects of Intellectual Property =
Rights (TRIPS) agreement, which requires 20-year patent protection for inno=
vative medicines while allowing for public health safeguards. This included=
 Section 3(d), a provision that is unique to Indian law and was included to=
 protect public health. It states that patents would not be given for new f=
orms, uses or minor modifications of existing drugs unless they differ sign=
ificantly with regard to efficacy.



 Between the signing of the 1995 TRIPS agreement and the amendment of the A=
ct, patent applications were collected in a mailbox, to be reviewed once th=
e agreement came into force. One of these was the 1997 application filed by=
 Novartis AG in the Chennai Patent Office for imatinib mesylate, brand-name=
d Gleevec, on the grounds that the beta crystalline salt form (mesylate) of=
 the base imatinib was a new invention. Rights for exclusive access to the =
Indian market were obtained in 2003, and on that basis manufacturers of gen=
eric drugs were forced to withdraw their product from the market.



 In 2005, the CPAA and the generic drug companies filed an opposition to th=
e application before the patent was granted. Under Section 3(d) of the Act,=
 they argued, the drug was not patentable because it was actually a salt fo=
rm of an already known substance and did not display any enhanced efficacy.=
 This substance was the active molecule imatinib, patented in 1993 before t=
he 1995 TRIPS agreement.



 In January 2006, the Assistant Controller Patents and Designs (Chennai) he=
ld that since imatinib existed naturally in a stable salt form, the 1993 pa=
tent covered both the free base imatinib and its salt form mesylate. The ru=
ling was that Novartis failed to prove increased efficacy and, therefore, G=
leevec was not patentable under Section 3(d) of the Patents Act.



 On the basis of this ruling, generic drug companies resumed manufacturing =
the drug and selling it in the world market at a tenth of the price that No=
vartis was charging. In May 2006, Novartis filed the affidavits for the cas=
e that is currently being heard.



 In the challenge to the Assistant Controller's order, Novartis argued that=
 he did not give sufficient weight to the fact that patents for imatinib me=
sylate had been granted in 35 other countries, that the case law placed bef=
ore him was ignored and that an in-house laboratory test performed by Novar=
tis scientists on rats showed the 30 per cent increase in efficacy necessar=
y for patents under Section 3(d).


The CPAA and the generic drug companies responded that each country was fre=
e to determine its own criteria for patentability and that the findings of =
patent offices in one country had no relevance in another as stated under A=
rticle 4 bis of the WTO Paris Convention. They also argued that Novartis fa=
iled to show that imatinib mesylate differed significantly from other forms=
 of imatinib and questioned the independence of the investigation undertake=
n to show 30 per cent efficacy. They submitted that Novartis provided only =
10 per cent of the research funding necessary to develop the drug. Dr. Bria=
n Drucker of Oregon Health and Science University, whose laboratory identif=
ied the compound, received 50 per cent of his funding from the National Can=
cer Institute (of the U.S. government), 30 per cent from the Leukemia and L=
ymphoma Society (a U.S. non-governmental organisation), and 10 per cent fro=
m Oregon Health and Science Institute.



 In the challenge to Section 3(d), Novartis argued that this aspect of the =
Indian patent law is arbitrary and illogical because it is not in complianc=
e with the TRIPS agreement, particularly Article 27. It argued that this wo=
uld undermine incentives for pharmaceutical innovation and that Section 3(d=
) was introduced in the Indian Parliament with the intent to disqualify Gle=
evec. Although Novartis recognised that TRIPS was a non-enforceable agreeme=
nt and the Indian government was therefore free to repudiate its obligation=
s under TRIPS, Novartis claimed that it was invalid and unconstitutional fo=
r Parliament to otherwise comply to all but one provision. It further claim=
ed that the term efficacy was vague and discriminatory. It placed on record=
 that it had a charitable programme Glivec International Patient Assistance=
 Program (GIPAP), which disseminates medicines free of charge to those who =
were unable to afford them.



 The CPAA and generic drug companies responded that it was not open to priv=
ate companies or Indian courts to decide whether Indian patent laws were co=
mpliant with TRIPS. They contended that it did not violate the Indian Const=
itution and was passed by a competent legislature (the only two grounds for=
 amending a statute in Indian law). They also argued that Section 3(d) was =
not vague and did comply with TRIPS. With regard to Article 27 they counter=
ed that Section 3d was valid because it did not discriminate as to the fiel=
d of technology. They further made the case that 3(d) was a bona fide Act i=
ntroduced to combat the problem of "evergreening". This, they argued, was a=
n abuse of the spirit of TRIPS, which sought to balance public health and i=
ntellectual property rights. Evergreening is a technique companies use to s=
tagger patent applications so as to extend market monopoly and prevent the =
entry of generic drug competitors. This keeps medicines out of reach for th=
e vast
 majority of Indians. Such a result would be in contravention of Article 21=
 of the Constitution and other international conventions on the right to he=
alth.




                                     [PHOTO] ADNAN ABIDI/REUTERS
                                                  Transgendered people suff=
ering from HIV/AIDS protest against Novartis, in New Delhi on January 29.


Although Novartis initially alleged violation of Article 19(1)(g) of the Co=
nstitution (the right to carry on any business), that claim was dropped in =
the January 29 hearing. Instead, it alleged that Section 3(d) violated Arti=
cle 14 of the Constitution, which promotes equality before the law and proh=
ibits arbitrary statute. Novartis wanted to place on record the recently re=
leased report of the Mashelkar Technical Expert Group on Patent Issues. The=
 High Court case was adjourned for counsel for the Government of India to s=
ubmit a response. It will be resumed on February 15, 16 and 19.



 Reactions to the case have not been indifferent. This is not surprising as=
 there is much at stake on several counts. Novartis will want to make the m=
ost of its blockbuster drug and may file for more patents under the same cr=
iteria. Other multinational companies are waiting in the wings for their cu=
e. According to V. Rangaswamy, Assistant Controller Patents and Designs, wh=
o spoke to Frontline, patent applications for some 9,000 substances are in =
the 1995-2005 mailbox. The Communist Party of India (Marxist), public healt=
h organisations and patients' groups are concerned that the sale of life-sa=
ving drugs, not only for a particular type of leukaemia but for a range of =
diseases, including tuberculosis, HIV/AIDS, asthma and diabetes, will be re=
stricted. They fear that not only will the case set a precedent for the app=
roval of drugs with these sorts of modifications but also a ruling that ove=
rturns Section 3(d) will mean that patents will be granted more widely. Sin=
ce India
 produces many generic medicines at affordable prices, this will restrict a=
ccess not just to the man on the street on India but to many patients acros=
s the developing world. They also fear that a precedent could be set for mu=
ltinational companies to change drug laws in other countries. As Y.K. Sapru=
, Chairman of the CPAA told Frontline, "this is a global issue that will af=
fect millions of people." The Indian Network for People with HIV/AIDS (INP+=
), the People's Health Movement, the Centre for Trade and Development (CENT=
AD) and Medicines Sans Frontiers (MSF) called on the company to cease immed=
iately its legal action. Nearly a quarter of a million people from over 150=
 countries have signed a petition expressing their concern about the negati=
ve impact the company's actions could have on the developing world. The CPI=
(M) issued a statement calling on the government to defend the Patents Act =
and use international platforms to "mobilise opinion against the greed for =
profit".



 Caught in the glare of publicity, Novartis put out a public statement addr=
essing three points. These bring out the relevance to the case of long-stan=
ding issues surrounding liberal patentability.



 First, Novartis sees India as a global competitor. Therefore, "[p]rotectin=
g innovation is the foundation for massive R&D investments made by the phar=
maceuticals industry that are vital to medical progress. Companies can cont=
inue to bring improvements and innovations to patients and societies only w=
ith effective patent laws. For a research-based company such as Novartis, p=
atents are not negotiable."



 According to Leena Menghaney, campaign manager, MSF, Delhi, excessive pate=
nting creates a patent thicket and can prevent one company from investing i=
n research and development in an area that another company's patent may imp=
roperly cover. Also, allowing patents on minor modifications such as these =
acts as a disincentive for companies to address new medical challenges; it =
is more cost effective for them to work on minor changes for patents on the=
 same drug. She cites two studies, one by the MSF's Drugs for Neglected Dis=
eases Initiative and one by the World Health Organisation's (WHO) Commissio=
n on Intellectual Property, Innovation and Public Health, whose report came=
 out in April 2006, that found that since private pharmaceutical companies =
are driven by market potential, people in developing countries do not have =
the purchasing power to attract research and development for medicines for =
the diseases that most affect them. Instead, these companies are driven by =
the
 purchasing power for drugs for cosmetic changes and lifestyle diseases, su=
ch as anti-wrinkle creams, anti-obesity drugs and so on.



 Second, Novartis has secured access to Gleevec in India and globally: "In =
2006, our access-to-medicines programme reached 33.6 million patients. Nova=
rtis spent $ 755 million last year alone. ... The Glivec International Pati=
ent Assistance Program (GIPAP) is one of the most far-reaching patient assi=
stance programmes ever implemented on a global scale. In India, 99 per cent=
 of patients who receive Gleevec receive it free from Novartis [6,600 peopl=
e]."
 However, a response by Professor Brook K. Baker of the Northeastern Univer=
sity, School of Law, Program on Human Rights and the Global Economy, states=
 that: "Corporate donations are not a sustainable solution: (1) they are fr=
equently hard to access, (2) they are revocable, (3) they are not offered a=
cross the broad spectrum of patented medicines that poor people need, and (=
4) they are designed primarily to forestall generic competition by removing=
 market incentives."



 Third, Novartis states that its actions in India do not hinder the supply =
of medicines to the poor: "Our case does not challenge provisions that prov=
ide for access under international trade agreements, specifically the TRIPS=
 and the Doha Declaration. These flexibilities allow production for export =
under compulsory licences that have been issued for public health reasons. =
They have been put in place to allow poor countries to safeguard access to =
medicines that do not have sufficient local production capacity."



                                            But, according to D.G. Shah, se=
cretary-general of the Indian Pharmaceutical Alliance, who spoke to Frontli=
ne from Spain, the functionality of such a provision relies on there being =
a cheaper alternative to buy. He cites the example of the compulsory licenc=
e the Thai government granted in November 2006 for import and production of=
 efavirenz, a second-line HIV/AIDS drug, to deal with stock outs and high p=
rices charged by the patent owner. Without cheaper alternatives from India,=
 there would be nowhere else to go to buy medicines. According to a study c=
onducted by MSF, 67 per cent of the medicines produced in India are exporte=
d to developing countries; approximately 50 per cent of the medicines distr=
ibuted by the United Nations Children's Fund in developing countries come f=
rom India; in Zimbabwe, 75 per cent of the tenders for medicines for all pu=
blic sector health facilities come from Indian manufacturers; the state pro=
curement
 agency of Lesotho, the National Drug Supply Organisation, states that it b=
uys nearly 95 per cent of all antiretrovirals (ARVs) from India. Even count=
ries that manufacture their own medicines rely on imports of active pharmac=
eutical ingredients from India.



 Dr. Yusuf Hamied, chairman and managing director, Cipla Ltd., points out t=
hat India and many developing countries are in a permanent state of crisis.=
 And this requires a permanent compulsory licensing system. "India," he tol=
d Frontline, "cannot afford a monopoly. Any drug required in India should b=
e allowed to be manufactured on payment of a 4 per cent royalty. I have nev=
er grudged the inventor a reward, but you cannot have a monopoly in a count=
ry like India." He points to the case of ARV treatment for HIV/AIDS. "They =
[multinational drug companies] were charging $12,000 a year until Cipla cam=
e along and started making them for a dollar a day."



 The well-fed debate about intellectual property rights versus rights to pu=
blic health has found fresh pastures to graze on. As arguments intensify, i=
t remains to be seen to what extent the government will stand by the amendm=
ents it made two years ago to the Patents Act.


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