[Ip-health] Wall Street Journal: Novartis Angers Critics in India

[Thiru Balasubramaniam]

Novartis Angers Critics in India
Challenge of Patent Laws Creates
Uproar Among Public-Health Advocates
By JEANNE WHALEN in London and PETER WONACOTT in New Delhi
March 5, 2007; Page A10

When charitable groups accused Novartis AG of jeopardizing the supply
of inexpensive medicine to poor countries late last year, the Swiss
drug giant thought it could swiftly win over its critics. Instead, the
fight is only gathering momentum, with world leaders and politicians
jumping in to rebuke the company.

Novartis set off alarm bells after India rejected its patent filing for
the cancer drug Gleevec. Novartis has requested several patents in
India, and Gleevec, which is patented in 36 countries including China,
was the first to be rejected. Novartis sued to challenge India's
decision in court in Chennai and filed a separate suit in the court
saying that India needed to loosen its laws to make it easier to patent
drugs.

India, a big maker of generic medicines supplied to many poor
countries, established its current patent law in 2005 to fulfill its
obligations as a member of the World Trade Organization.

Critics say the changes in Indian law sought by Novartis would make it
harder for poor people to get inexpensive medicines for HIV and other
diseases. Led by Doctors Without Borders, Novartis's critics have
staged protests outside the company's offices in Washington, Brussels
and Boston and collected signatures from nearly a quarter of a million
people in 150 countries in an attempt to get Novartis to abandon its
court case.

Unexpected Uproar

Novartis officials say they are concerned about the damage the campaign
is causing the company's reputation. "We didn't quite expect the uproar
we've had," says Paul Herrling, head of corporate research at Novartis,
who says he has met with the group to defend Novartis.

The dispute underscores the growing tension between public-health
interests and intellectual-property rights. That friction has been
particularly difficult for India as it attempts to develop into a more
sophisticated economy with all the benefits and obligations of WTO
membership.

Until 2005, Indian law allowed domestic companies to sell copies of
drugs that were patented in the West as long as they changed the
process by which the drugs are made. Charitable groups and developing
nations rely on India's cheaper generic versions of the latest
treatments for HIV and other diseases.

In early 2005, India adopted a new patent law that lets drug companies
seek patents on medicines invented after 1995 -- the year India joined
the WTO -- or for new and more efficacious versions of older drugs. So
far, India has granted about 100 patents under its new law. One of the
first went to Roche Holding AG for a hepatitis C treatment.

India says it rejected Novartis's application for a Gleevec patent
because the form of the drug Novartis wanted to patent wasn't "more
efficacious" than older versions of the drug. Novartis's lawsuit says
the criteria India used violate WTO rules and should be removed from
Indian law.

Generic companies in India sell copies of Gleevec, a treatment for rare
cancers including chronic myeloid leukemia, or CML. Winning a patent
for Gleevec wouldn't enable Novartis to stop them because India law
allows existing generics to remain on the market. And Novartis, based
in Basel, Switzerland, says it gives the drug away to about 6,700
patients in India because few can afford the official Gleevec price of
$2,500 a month.

Growing Middle Class

But Novartis wanted patents for Gleevec and other drugs because it
believed that India's growing middle class would increasingly be able
to pay for brand-name medicines. Novartis made a case of Gleevec
because it was the first to be rejected, says Thomas Wellauer, head of
corporate services and a member of the executive committee at Novartis.

"If the patent law in India stays the way it is, it is very difficult
to patent new drugs," Mr. Wellauer says.

Though India's pharmaceutical market is growing fast, patented drugs
account for about 2% of the Indian market's $5 billion in sales. Sales
are expected to climb to $12 billion by 2015, with the share of
patented drugs growing to about 7%, according to a 2006 report from
consultants Ernst & Young.

Several months after Novartis filed suit in August 2006, relief
organization Oxfam International asked its supporters to email Novartis
Chief Executive Daniel Vasella to complain. Novartis says it received
more than 50,000 emails.

Novartis's public-affairs office emailed a response to the Oxfam
campaigners, telling them "that our case in India is about gaining
clarity and strengthening the Indian patent system, which will
ultimately help patients and societies."

The Max Foundation, a leukemia support group based in Edmonds, Wash.,
and partly funded by Novartis, defended the drug company. In February
it began collecting more than 5,000 signatures from uninsured,
low-income patients around the world who receive free Gleevec from the
company. The foundation posted the signatures on its Web site. Pat
Garcia-Gonzalez, executive director of the Max Foundation, says
Novartis didn't ask for its help and that the foundation collected the
signatures of its own accord.

But the pressure kept building. Doctors Without Borders and other
groups organized protests outside Novartis offices around the world and
posted films of the events on their Web sites. Desmond Tutu, the South
African Nobel Peace Prize winner known for his work against apartheid
and AIDS, signed the Doctors Without Borders petition. Legislators in
the European Union and U.S. also wrote open letters to Dr. Vasella
urging him to drop the case.

Return to the 1990s?

HIV activists have been particularly critical of Novartis, saying its
efforts could bring a return to the 1990s, when new HIV drugs were
patented and expensive, and few generics were available for patients in
poor countries. Any changes to India's patent law could make it easier
for drug companies to patent minor improvements in HIV drugs, making it
harder for poor patients to receive these medicines, Doctors Without
Borders says.

Novartis says this isn't a concern because WTO rules allow countries to
produce cheap copies of drugs they urgently need for a public-health
crisis, whether the drugs are patented or not.

Novartis's case puts Indian drug companies in a delicate spot. Many
oppose Novartis's efforts to strengthen patent laws, but some,
including Ranbaxy Laboratories Ltd. and Dr. Reddy's Laboratories Ltd.,
are trying to patent brand-name drugs themselves. Ramesh Adige,
executive director of Ranbaxy in Gurgoan, outside New Delhi, says
incremental innovation should be patentable in India, so long as
"frivolous inventions" aren't given patent protection.

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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