On April 1, In a 112-page judgment, the Supreme Court of India upheld the refusal by the Patent Office to grant a patent to Novartis for the ß-polymorphic form of imatinib mesylate.
Ranjit Shahani, Vice Chairman and Managing Director, Novartis India saw this ruling as a setback for patients that will hinder medical progress for diseases without effective treatment options. “We strongly believe that original innovation should be recognised in patents to encourage investment in medical innovation especially for unmet medical needs,” he said explaining that the company brought this case because they strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs.
When asked if the company would appeal the judgment or consider any further legal recourse, he said he needed to analyse the judgment completely before commenting on such action. For the same reason, he refused to comment on the implications of the judgment (Para. 195, page 96) which mentions that the appeals filed by Novartis “are dismissed with cost.”
When quizzed on the larger impact of today’s judgment on other MNC pharma, he predicted, “No MNC will invest in R&D in India after this judgement. R&D investment will move to places which have an ecosystem which protects intellectual property. For instance, China has seen an inflow of such investment in the past few years while India has not,” he pointed out.
Though Kiran Mazumdar Shaw, Chairman and Managing Director, Biocon agreed that the Supreme Court ruling on patent grant to Novartis for Glivec is certainly very disappointing for Novartis, she analysed that it is not a surprise as it was a borderline case that was based on a decision related to recognising incremental innovation, which the Indian Patent Law does not favour.
She, however, opined that this decision should not be confused with the subject of patentability of original innovation. “India is a signatory to WTO, TRIPS and must respect intellectual property associated with original innovation. India needs to be seen as actively encouraging innovation and creating an enabling ecosystem that delivers affordable innovation in order to find solutions to meet the burgeoning healthcare needs of Indian patients.”
Criticising the Indian Government and the pharma industry in India (both global and local companies), she said, “The Indian government has abdicated its responsibility to provide life saving drugs to its patients, which has led to frivolous compulsory licensing issues jeopardising India’s image as a country that safeguards IP and encourages innovation. However, MNCs must also address access and affordability by engaging with the Indian Government to evolve a pricing mechanism that is linked to purchasing parity.”
Also in the same vein, Dr Swati Piramal, Vice Chairperson, Piramal Enterprise, commented that the Supreme Court judgment should be seen on the merits of one case rather than viewing it as weak IP rights in a country. She points out that even the US Supreme Court is debating patent rights on a diagnostic gene assay for breast cancer.
Legal eagles dissect the order
Hailing this as a landmark judgment, D G Shah. secretary general, Indian Pharmaceutical Alliance, commented that it will serve to set at rest the controversy that was raised regarding the scope of section 3(d) in the Patents Act, which is a crucial safeguard against the extension of patent monopolies of known drugs and the consequent delay in the availability of affordable generic versions.
Shah pointed out that imatinib is on the National List of Essential Medicines and is an important drug in the treatment of several cancers such as certain blood and stomach cancers. The decision of the Supreme Court will come as a relief to patients suffering from these dreadful diseases as several Indian companies including Cipla, Ranbaxy and Natco can continue marketing imatinib at a fraction of the cost of the Novartis product.
Quoting Justice Chinnappa Reddy (in Para. 27, 28 and Para 159), Dr Gopakumar G Nair, Gopakumar Nair Associates pointed out how the Learned Bench emphasises “9. … A statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation.” and “A statute is best interpreted when we know why it was enacted.”
Nair commented that the order has adopted an excellent techno-legal approach to dissect the disputed Gleevec Patent application of 1998 via-a-vis the prior art Zimmerman patent of 1994 to expose lack of novelty and inventive step and consequent non-patentability, and opines that “the Supreme Court has hit the last nail on the decade-long debate on constitutional validity on Sec. 3(d) and on the patent abuse practices by “evergreening.”
Putting forth an example of the “many beautiful gems of wisdom” in the order, Nair quoted: “We certainly do not wish the law of patent in this country to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”
Such observations will hopefully minimise the frivolous and costly litigations being undertaken by MNCs in India, he opined. In conclusion, he commented that the fact that the Novartis appeal have been rejected with COSTS, speaks volumes for the finality in the matter.
One up for Indian Pharma Inc
Initial responses from Indian pharmaceutical majors have hailed the verdict as an affirmative action, pending a more detailed analysis of the 112-page judgment document.
As one of the companies directly benefiting from this decision, Dr P Bhaskara Narayana, Director and Chief Financial Officer, Natco Pharma welcomed this judgement and underlined that ”the uniqueness of this judgement is that it has attempted to distinguish between a “genuine” invention and a “non-genuine invention” which does not increase the efficacy of the drug.”
Commenting on the judgment, Dr Y K Hamied, Founder and Chairman, Cipla said, “The judgment in the Novartis case is a victory for patients both in India and around the world. We are pleased with the judgment which prevents the use of frivolous patents to deny access to medicines for patients. India, being the Pharmacy Capital of the World can continue to produce affordable, high quality medicines without the threat of patents for minor modifications of known medicines. This judgement will not only benefit patients in India, but patients around the world. We will review the judgment in detail before commenting further.
Likewise Leena Menghaney, Médecins Sans Frontières Access Campaign Manager, India said that the verdict appears to be the best outcome for patients in developing countries as fewer patents will be granted on existing medicines. “Novartis’ attacks on the elements of India’s patent law that protect public health have failed. The Supreme Court’s decision prevents companies from abusing the patent system to get unwarranted patents on existing medicines, to block price-busting generic competition on HIV and other essential medicines. This confirms that all patent offices in India have to use this interpretation and the law is now clear and must be strictly applied,” she concluded.
Welcoming the judgement, Daara Patel, Secretary General, Indian Drug Manufacturers Association (IDMA) said, “IDMA has all along fought the vested interests in getting the Section 3(d) strengthened in the Patents Act and our stand is vindicated by the Supreme Court. Section 3(d) ensures that ‘ever-greening’ of patents by mere discoveries and frivolous improvements are denied. This landmark judgement will give the much needed boost to Indian generics and our poor patients will be benefited by faster availability of competitive generic medicines at affordable prices This judgement is also a warning to Western pharmaceutical firms that are increasingly focusing on India just to drive their sales thru exorbitant prices. The judgement will also help secure the supply of affordable medicines for millions of the world’s poorest.”
Way forward for Novartis
Speaking at a press meet soon after the SC verdict was announced, at Novartis India’s Mumbai head office, Shahani said that though they were disappointed with the decision, they would continue with the full donation programmes, through which the company provides Glivec free of charge to 95 per cent of patients prescribed the drug in India, currently more than 16,000 patients. The remaining five per cent of patients are either reimbursed, insured, or participate in a very generous co-pay programme.
Since Novartis began its first donation programme in 2002, the company has provided more than $1.7 billion worth of Glivec to patients in India. When quizzed on how this verdict would impact profits of the company, Shahani said that they do not break out profits or revenues for separate products but underlined that in India, “we do not make any profits from Glivec.”
“We believe that Glivec is a breakthrough drug which has changed the way cancer research will be done globally. We will continue to invest in India but on a more cautious note.” Hoping that the ecosystem for patents in India will improve, he stressed,”It (the protracted legal battle) was not just about Glivec. It was about getting clarifications You have to test the system. In addition to seeking a patent for Glivec, the company filed the case to help clarify these unique aspects (Sections 3(d) and 3(b)) of the patent law. We will continue to apply for product patents in the future as well. We understand the value of generics. But without patented drugs, there will be no generics pipeline in the future.”
Dr Ajaykumar Sharma, Associate Director, Pharma & Biotech, Healthcare Practice, Frost & Sullivan, opined, “The direct impact (of this judgement) on Glivec (on Novartis) is negligible as the generics were already selling in the market and the patient assistance programme launched by Novartis is a phenomenal success in increasing its access among Chronic Myeloid Leukaemia (CML) patients. But the long term and future prospects of its various molecules which it intended to launch in the Indian market with improved physicochemical properties will not get patent protection in future.
Strategy change
Clearly, the Glivec verdict will impact the India strategies of pharma MNCs. Dwelling on the impact on other MNC pharma companies, Sharma predicted, “They will now try to get their product patented first. If it doesn’t happen then they may opt to not launch the same or else they may look at technology transfer to Indian companies or partners in India to manufacture and sell across the developing countries. Also ever-greening strategy will definitely be out of the drawing board for India.”
Giving his take, Amit Backliwal, Managing Director, South Asia, IMS Health Information and Consulting Services India said, “Indian market opportunity is quite large to be ignored by any major pharma company today and going forward. However, for any company now to play in India, business models have to be adapted and aligned to the prevailing regulatory and market conditions that exist. Larger play involving alternative funding, market access, patient access programmes would becoAll healthcare stakeholders (pharma/payer/provider) need to start looking at middle and bottom of pyramid as well with innovative solutions to address overall access to healthcare concerns that exist.”me more important now than ever as clearly, the market is moving towards a more volume and price sensitive area.”
Speaking from the Indian generics side of the fence, Sharma of Frost & Sullivan reasoned, “The recent cases of Pfizer’s Sutent, Roche’s Pegasys will not be opened as the 3(d) definition analysed by Supreme Court will not grant a patent status to these drugs in India. Indian generics can freely manufacture and sell these drugs across India and other developing nations.”
Sharma predicts that there will be many more patent challenges coming to India in the near future which will move from lifesaving drugs to even chronic therapy medications. In fact, Glenmark is the first Indian pharma off the block on this prediction, when it launched a cheaper generic version of Merck’s blockbuster anti-diabetes drug Januvia (sitagliptin phosphate) a few days after the SC verdict on Novartis. Merck filed a patent infringement lawsuit against Glenmark in the Delhi High court but in line with the Glivec verdict, was refused interim relief.
Second filter for patenting
The verdict will continue t be analysed and will guide future judgements as well. As TC James, Consultant Research and Information System for Developing Countries (RIS), analysed, “The court rightly said that it was second filter for patenting. This implies that the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant is not patentable. It goes on to clarify that, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers etc will be treated as the same substance unless they differ significantly in properties with regard to efficacy.”
In his opinion, the intention of this provision is to ensure that only genuine inventions get patents and not frivolous or minor improvements. The section, though not specific to pharmaceuticals, has special relevance for that sector, since most of the applications for ever greening are in drugs and chemicals. In fact, the transnational pharma companies were challenging that provision, without realising that the portion they were challenging was an enabling and clarificatory section.
James believes that the Hon’ble Supreme Court has now finally settled the interpretation by stating that patent applicants have to satisfy the criterion of substantial improvement of efficacy, the term has already been interpreted by the Madras High Court as therapeutic efficacy. This will greatly help the generic industry in India who were lately finding the going tough.
He also highlights that the court also rightfully highlighted the public interest angle. This has already been stated in Articles 7 and 8 of the Agreement on Trade Related aspects of Intellectual Property Rights as well as in section 83 of the Patents Act. What is now required is a very strict application of section 3(d) to all patent applications by the Patent Office. That would definitely improve the quality of patents granted in India and also help in the rapid industrialisation of the country.Other countries who were contemplating introducing section 3(d) like provisions in their patent law can also now move forward with more confidence, concluded James.
A victory for public health
Weighing in on the public health angle, Sakthivel Selvaraj, Senior Health Economist, Public Health Foundation of India, New Delhi summarised that the verdict restricts patents for therapeutically breakthrough drugs, but utilises current safeguards available to developing countries.
Calling it a landmark judgement, he listed the several aspects why this is the case. The landmark judgement is expected to improve affordability of some patented medicines to patients in India as well as in other developing countries. These are considered essential and life-saving, such as, Glivec in this case. India’s move towards a stringent product patent regime since 2005, has put several life-saving drugs out of reach of common man. This will continue to hold true. However, if the latest verdict were to be in favour of Novartis, it would have allowed a plethora of known molecules to be patented, called as evergreening, making drugs unaffordable to a large segment of India’s population.
To Novartis’ complaint that the patent environment in India is not favourable to them and hence will scale down or stop investing in R&D in India, he said, “The fact is except for few, none of the Big Pharma has ever invested significantly in the pharma sector in India in the past. Novartis’ R&D expenses in 2012 in India are a paltry 0.03 percent of its overall expenses. Even in terms of production, drug transnational corporations act more as trading agents, than actually producing in their plan. Largely, drug multinationals either outsource their production to Indian companies or import it from their own country. Even foreign investment has been insignificant, as less than two per cent of overall foreign investment went into pharma sector in the past two decades. Much of last four-five years’ foreign investments were of ‘brown-field’ investment category buying up Indian companies rather than investing in plants, called ‘green-field’ investment.”
He pointed out that India, a global pharmacy, supplying good quality essential and life-saving drugs is able to do so at a fraction of what Big Pharma offers. This is true of anti-retroviral drugs, cancer medicines and other life saving drugs. The annual cost of treatment of leukaemia per patient offered by Novartis for Glivec is over Rs. 15 lakhs while the same is offered by Indian generic companies at a price of Rs. 10,000. Last year, Indian generic drug maker, Natco obtained compulsory licenses to sell it at Rs. 8800, while the same is being sold by Cipla at less than Rs. 7000.
On the other hand, Bayer, whose Sorafenib tosylate was under question, was selling at that time for Rs. 2.8 lakhs per patient per month.
In conclusion, Selvaraj said, “It is clear that the current patent system makes essential drugs unaffordable and therefore, there is a need to not only restrict patents for therapeutically breakthrough drugs, but utilise current safeguards available to developing countries, such as, compulsory licensing for patients’ advantage.”
Protecting the ‘pharmacy of the world’
“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.” Underlining this issue, Menghaney says, “Patent offices in India should consider this a clear signal that the law should be strictly applied, and frivolous patent applications should be rejected.”
(With inputs from Shalini Gupta, Usha Sharma and Viveka Roychowdhury)
