A landmark patent ruling against Novartis by the Supreme Court in India could lead branded drug manufacturers to review their strategies. Asia correspondent A Nair looks at the implications
In a seven-year-long battle and one of the landmark patent cases in India, the Supreme Court has rejected Novartis’s Indian patent for an amended form of anticancer drug Glivec. The move is set to have big implications for the world's largest drugmakers and may lead to a reduction in foreign investment in Indian pharma companies. However, on the flip side, the Glivec judgement has also ensured that drugs will continue to be accessible to the poorest of the poor.
Y K Hamied, Chairman of Cipla, termed it a victory for India. ‘The verdict will help the country get cancer drugs at affordable prices. It is a victory for patients who will have access to medicines at affordable prices,’ he said.
The international medical humanitarian organisation Médecins Sans Frontières (MSF) concurred. ‘This is a huge relief for the millions of patients and doctors in developing countries who depend on affordable medicines from India, and for treatment providers like MSF,’ said Dr Unni Karunakara, MSF International President.
‘The Supreme Court's decision now makes patents on the medicines that we desperately need less likely. This marks the strongest possible signal to Novartis and other multinational pharmaceutical companies that they should stop seeking to attack the Indian patent law.’
Leena Menghaney, India Manager for MSF’s Access Campaign, added: ‘Patent offices in India should consider this a clear signal that the law should be strictly applied, and frivolous patent applications should be rejected.’
India’s Supreme Court ruled that the drug had failed in ‘both the tests of invention and patentability’ under the Indian law. The Court held that Glivec was an example of ‘incremental innovation' under Section 3(d) of the Indian Patents Act and, as such, was not liable for a patent.
The controversial Section deals with ‘evergreening’, a term used to describe the creation of a new version of a drug specifically to extend the life of a patent, and after ensuring only a slight modification to an existing product.
India has taken a very strong stand against patenting of frivolous, unjustified patents
‘India honours patents, the verdict doesn’t imply that it doesn't. More than 6,000 patents were granted last year,’ argues Hamied. ‘India has taken a very strong stand against patenting of frivolous, unjustified patents.
‘Drug multinationals should take it in the right spirit,’ he added.
Bhaskara Narayana, Chief Financial Officer, Natco Pharma, said the judgement also acknowledges the pricing of the generic equivalent, which is almost 92% lower than Glivec’s price.
Glivec costs Rs 142,000 (around US$2,600) a month, compared with around Rs 7,700 ($140) for the generic equivalent.
India’s Cipla and Natco Pharma, which already sell generic Glivec in India at around one tenth the price of the branded product, have turned out to be the main beneficiaries. However, even as Indian domestic pharmaceutical majors hailed the verdict, opponents argued that the ruling was a blow to intellectual property rights.
Novartis India Vice Chairman and Managing Director Ranjit Shahani described the ruling as a ‘setback for patients that will hinder medical progress for diseases without effective treatment options’, and said that Novartis would invest less money in research in India as a result. ‘We hope that the ecosystem for intellectual property in the country improves, for all research and development investments appear to have moved to China.’
Seven global companies – Novartis, Sanofi, Pfizer, Roche, GSK, AstraZeneca and Eli Lilly – have invested several billions in China, especially after the patent law was promulgated in India.
Price is not a function of accessibility. Glivec is priced at zero, for around 95% of patients receive the drug at their door completely free of cost
Shahani added that since 2002 Novartis has distributed Glivec valued at around $1.7bn as part of the company’s ongoing access programme. ‘Price is not a function of accessibility. Glivec is priced at zero, for around 95% of patients receive the drug at their door completely free of cost,’ he said.
In a statement, the company said: ‘The primary concern of this case was with India’s growing non recognition of intellectual property rights that sustain research and development for innovative medicines.’
The Supreme Court judges maintained the questions had been debated ‘intensely and at great length’.
‘The Court was urged to strike a balance between the need to promote research and development in science and technology and to keep private monopoly at the minimum,’ they said. ‘Arguments were made about India’s obligation to faithfully comply with its commitments under international treaties and counter arguments were made to protect India’s status as “the pharmacy of the world”.’
‘The Court was reminded of its duty to uphold the rights granted by the statute, and the Court was also reminded that an error of judgement by it will put life-saving drugs beyond the reach of the multitude of ailing humanity, not only in this country but in many developing and under-developed countries, dependent on generic drugs from India.’
Drug makers would rather urge patients to upgrade to the expensive versions than move them to cheaper, generic medicines
Anand Grover, lawyer for the Cancer Patients Aid Association, which opposed Novartis in the patent case, noted that the court decision would go a long way in providing affordable medicine for the poor. ‘Western governments routinely grant patents for slightly improved versions of drugs whose patents are about to expire. Drug makers would rather urge patients to upgrade to the expensive versions than move them to cheaper, generic medicines,’ he claimed.
Grover said Novartis’s threat that it would not introduce new medicines in India after the verdict was ‘hollow’ and that ‘thankfully, the Indian government has not been taken in by these threats’. He added that the judgement would not have any adverse impact on investments in the country as ‘India is too big a market to be ignored by Big Pharma’.
This view is supported by Amit Backliwal, who heads South Asian operations for leading healthcare information provider IMS Health. ‘India is too big to ignore,’ he told Reuters. ‘Companies will definitely get cautious, and it definitely means a change in their business model, but I don’t think they will pull out.’
With India expected to be the world’s eighth largest market for medicines by 2016, manufacturers of patented drugs will have to show greater creativity in their business dealings there, including striking deals with local firms to sell cheaper versions of their drugs, industry experts believe.
Drugmakers will have to work out strategies for the lower sections, to give affordable access to medicines and make money by large volumes and smaller margins
Differential pricing – steep discounts for less well-off markets – is already common in industries from cars to mobile phones and is a possible option for pharma, according to Raghunath Mashelkar, former director general of the Council for Scientific and Industrial Research and an architect of India’s IP policies. Pharmaceutical firms must find new ways to make products affordable for lower-income groups, he argues.
‘Drugmakers will have to work out strategies for the lower sections, to give affordable access to medicines and make money by large volumes and smaller margins,’ he told Reuters. ‘And then they will look at the middle and the upper sections and make money through smaller volumes but higher margins.’
It is a calculated risk, says Reuters, yet a number of drugmakers are already coming around to the view that trading volume for price is the way forward.