NOVARTIS PATENT CHALLENGE DISMISSED IN INDIA

Pharmaceutical giant Novartis saw its challenge to Indian patent law dismissed in the Chennai High Court on 6 August. The multinational had filed the suit after the Indian authorities denied it a patent on Glivec, a cancer medicine, in January 2006, thus allowing the production of cheap generic copies of the drug to continue freely.

The stringent standards of patentability upheld by the court mean that fewer medicines will be eligible for patents. This in turn broadens the scope for the production of generic drugs.

The decision was welcomed by health activists, who had warned that an expansive interpretation of patent eligibility would have stopped India from producing inexpensive medicines for the world's poor. "This is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India," said Tido von Schön-Angerer, director of the Médecins Sans Frontières (MSF) campaign for access to essential medicines.

But Novartis announced it would divert research and development (R&D) funding planned for India to China instead. Daniel Vasella, the Swiss multinational's CEO, said: "This [ruling] is not an invitation to invest in Indian research and development, which we would have done. We will invest more in countries where we have protection. It's not a punishment. It's just a question of the culture for investment."

The court reaffirmed a section of Indian patent law requiring inventions to be significantly improved before they can be eligible for another patent, a clause designed to counter the undue prolongation of patent terms through only minor tweaking. It said it did not have jurisdiction to rule on whether this was compliant with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), as Novartis had charged.

The case followed the Chennai Patent Office's rejection of Novartis' patent application for the beta crystal form of cancer drug imatinib, marketed as Glivec (or Gleevec in the US). The office said it did not satisfy legal requirements for 'novelty' and 'inventive step', two of the main criteria used to evaluate patent applications. Novartis, however, had been granted the patent in almost 40 other countries, including China. Consequently, Novartis took its case to the Chennai High Court in May 2006, appealing the decision and challenging the Indian Patent Act (BRIDGES Monthly Review, Feb-Mar 2007).

The crux of the Patent Office's argument rests on Section 3(d) of the Indian Patent Act, which denies patentability to "a new form of a known substance" unless it results in "enhancement of the known efficacy of the substance". Brought in with the 2005 legislation that made Indian patent law compliant with the WTO TRIPS Agreement, the clause was intended to stop patent "evergreening", whereby minor changes to already-patented molecules are used as a basis for acquiring fresh patents and hence extended periods of protection. These, in turn, delay the entry of generic competitors into the market.

Indian Health Minister Anbumani Ramadoss said in April that the government was "very concerned" that the case's outcome might restrict India's ability to produce medicines cheaply. Along with former Swiss President Ruth Dreifuss, Archbishop Desmond Tutu, and members of the European Parliament and the US Congress, Ramadoss was among the nearly half a million people who signed an MSF petition urging Novartis to drop the case.

MSF, which purchases 84 percent of the AIDS drugs it distributes from Indian generic producers, said that "a ruling in favour of the company would have drastically restricted the production of affordable medicines in India that are crucial for the treatment of diseases throughout the developing world" because the Novartis challenge became a test case for Section 3(d).

How to define "enhancement of efficacy"?

The original form of imatinib, developed in 1992, cannot be patented in India since pharmaceutical products were ineligible for such protection there until 1995. The 'beta crystalline' form of the molecule was developed for patients to take as a pill and launched as Glivec in 2001.

As a developing country, India was not required to fully comply with TRIPS rules, which include pharmaceutical product patents, until 2005. In the interim, however, it introduced a temporary system of 'exclusive marketing rights' for new products that would then be considered for patents with the advent of full TRIPS compliance. When Novartis was granted one of the first such exclusive marketing rights, for Glivec in November 2003, the price increased from $230 to $2,740 per year.

After India reformed its patent laws to make them compliant with WTO rules in 2005, Novartis was refused a patent for Glivec on the basis that the beta crystalline form did not provide a significant enough "enhancement of efficacy" of the original imatinib molecule. Novartis responded with a writ to the High Court appealing against the ruling. It argued that Section 3(d) of the Indian Patent Act was "unconstitutional as it is vague, arbitrary and violative of Article 14 of the constitution (right to equality)", and alleged that it contravened India's obligations under the TRIPS Agreement.

Defending the patent-worthiness of Glivec, Novartis research chief Paul Herrling said "medical progress occurs through incremental innovation. If Indian patent law does not recognise these important advances, patients will be denied new and better medicines".

A different view came from Brian Druker, the key researcher behind imatinib. Most scientists he worked with are "primarily motivated by the pursuit of knowledge as a means to help patients," he said, and "it is, therefore, of great concern that the results of their efforts can't reach patients and save lives because of pricing strategies and patent policies such as 'patent evergreening'… used by partners further down the drug development process."

India attempts to differentiate genuine innovation from evergreening by using the "enhancement of efficacy" concept, says Health GAP's Brook Baker, a professor at Northeastern University. However, the definition of "enhancement of efficacy" remains unclear. The High Court suggested only that efficacy can be defined as "the ability of a drug to produce a desired therapeutic effect." It did not provide any guidance on how enhancements might be quantified, such as in terms of fewer side-effects or lower dosages.

Novartis maintains that Glivec boosts bioavailability (i.e. the degree to which the drug is absorbed by the patient) by 30 percent over the original form of imatinib, which should constitute an enhancement of efficacy. The Chennai Patent Office disagreed in rejecting the application, but more guidance to the definition may be provided during Novartis' appeal, which has been referred to the Indian Patent and Trademark Appellate Board (IPAB).

Tahir Amin, director of the Initiative for Medicines, Access and Knowledge (I-MAK), told Bridges that "the real issue lies in how the IPAB will define efficacy. This is what will determine the scope of patenting in India and thus the extent to which incremental innovations will be protected".

TRIPS compliance unlikely to surface at WTO

The Chennai High Court declined to rule on Novartis' assertion that Section 3(d) of the Indian Patent Act contravened TRIPS rules, saying it had no jurisdiction to rule on international treaties. In effect, it said that only the WTO was fit to make that decision.

If Novartis wants the WTO to rule on the matter, it will have to persuade the Swiss government to bring a case against India at the global trade arbiter's headquarters in Geneva.

However, Felix Addor, Deputy Director General of the Swiss Federal Institute of Intellectual Property, said "the issue of a WTO panel is not on the agenda of the Swiss Government at this point of time". Meanwhile, Indian Commerce and Industry Minister Kamal Nath insisted that "Our patent laws are WTO compliant".

In a press release issued after the court announced its decision, Novartis asserted that "during the India Trade Policy Review in late May 2007, the WTO urged India to strengthen its intellectual property rights system. It commended India for taking steps to align its national standards with international requirements but added that 'effective implementation of IPR-related legislation would be in the interest of India itself'."

Professor Baker said that Novartis had quoted selectively from a summary of individual Members' comments on the review, and that the extensive report itself contained "no discussion even questioning the legality or TRIPS-compliance of the India Patent Act generally or of section 3(d) in particular".

Baker also found it unlikely that Novartis had changed its R&D investment strategy on the basis of the court's ruling. He told Bridges that "it's virtually impossible to imagine this decision [to shift investment to China] turned on Section 3(d)" given the other business conditions taken into consideration, such as the low cost of clinical trials and researchers.

According to Indian press reports, at least a dozen large international pharmaceutical companies have invested heavily in the country since the amendment of the Patent Act in 2005.

ICTSD Reporting; "Indian Law on Generic Drugs is Upheld," INTERNATIONAL HERALD TRIBUNE, 6 August 2007; "Novartis Case May Not Reach WTO," HINDUSTAN TIMES, 8 August 2007; "Don't Abuse Patents: Scientists," LIVE MINT, 15 August 2007; "Novartis to move Indian R&D," FINANCIAL TIMES, 21 August 2007; "MNCs Still Bullish on India R&D," BUSINESS STANDARD, 27 August 2007.