The great Indian patent saga

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The outcome of Novartis & Bayer fights for patents will set new benchmarks for the industry

Arguments in the Novartis patent case for its cancer drug Glivec have closed in the Supreme Court and the verdict is expected soon. The case is said to be a landmark one and will play an important role in the Indian pharmaceuticals industry. It could hurt India’s position as a leading global producer of generics.

Switzerland-headquartered pharmaceuticals giant Norvatis approached the Supreme Court after the patent of its blood cancer drug was rejected. The drug is patented in 40 countries, including China and Russia. The Indian patent office maintains that the drug is not a true novelty, but only a variation of an existing drug.

Several other multinational pharma giants too are fighting to protect what they claim is their intellectual property rights. Bayer is fighting a battle over cheaper version of its cancer drug Nexavar in the Indian market. Last March, the first-ever compulsory licence was granted to Natco Pharma to sell generic version of Bayer’s cancer drug Nexavar. Bayer has appealed the order. Patent of Roche’s hepatitis C drug Pegasys, was also revoked citing lack of evidence that the drug was any better than existing treatments.

Novartis’ patent application on Glivec was rejected in 2006. Since then, it has been fighting legal cases in India. India amended the Patents Act following the WTO agreement, in 2005, to bring in a law to honour product patents. The current framework guarantees a company or individual 20 years of exclusive rights to market a product if it is found to be innovative and is granted a product patent.

“Innovation is fuelled by patents and patents are the lifeline for discovering drugs. Unless investments in research give a fair return to shareholders, no resources will flow into research and development (R&D),” said Ranjit Shahani, president Organisation of Pharmaceutical Producers of India (OPPI). Shahani is also vice-chairman and managing director of Novartis India.

Pro-health groups have been closely watching the Novartis case and say a decision in favour of Novartis will lead to price of life savings drugs shooting through the roof. For example, the generic version of Glivec costs about a tenth of the patented drug. Campaigners feel that Novartis' win will result in huge loss to patients, as treatment cost will rise significantly. The activists also argue that low cost generic drugs are not only provide accessible health to Indians, they also help more than 60 lakh people across the world.

“India has contributed significantly in ensuring cheap effective drugs. Most countries have been able to support AIDS treatment programmes because of availibility of generic drugs," said a pro-health campaigner. The price of HIV/AIDS treatment, a first-line combination of stavudine, lamivudine and nevirapine, which used to cost about Rs 5 lakh a year in 2000, has now fallen to just Rs 7,500 a year due to low cost generic drugs available and manufactured in India.

In 1970, during Indira Gandhi’s tenure as prime minister, patenting of drugs were disallowed, leading the way for domestic pharma companies to produce generic drugs at a fraction of global costs.

Earlier this year, the Indian patent office reasserted its preference for generic competition, stating that if a patented drug in the Indian marketplace were not made widely available at reasonable price, then generic manufacturers would be entitled to make their own versions of the drug and pay a royalty to the patent holder. Novartis’ first attempts at patenting Glivec were rejected in India because it was considered to be an updated version of an existing Novartis drug, and therefore, ineligible for patent protection.

To protect consumers of low-cost medicines, Indian patent law discourages ‘evergreening,’ wherein a pharma company will make minor improvements to an older medicine and patent it. As per Indian law, any improvements/modifications that do not improve the efficacy of the drug are ineligible for extended patents. In the case of Glivec, Novartis maintains that it has made the drug more effective and it absorbs more easliy into the bloodstream. Hence the patent. Most critics of India’s patent laws say that the current rules discourage innovation and companies needs to protect intellectual property right in order to keep investing in the research and advancement of medicine.

But, if the court rules in favour of Novartis’ claim, pro-health campaigners fear that many more multinational pharmaceuticals companies may also go to the court to prevent generic versions of their patented drugs. It will make it impossible for India to continue to be a leader in cheap generics drugs.


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