Patent trouble

Published : Feb 23, 2007 00:00 IST

Daniel vasella, Novartis AG chief executive.-VINCENT KESSLER/REUTERS

Daniel vasella, Novartis AG chief executive.-VINCENT KESSLER/REUTERS

The Madras High Court is set to resume hearing arguments in the case on Novartis' patent application for its cancer drug Gleevec.

ON January 29, the Madras High Court began hearing arguments on a series of writ petitions filed by the Swiss pharmaceutical multinational Novartis AG and its Indian subsidiary Novartis India against the Indian government, the Cancer Patients Aid Association (CPAA) and four Indian generic drug manufacturers: Natco, Cipla, Hetero and Ranbaxy. The petitions plead against the rejection by the Chennai Patent Office last year of a patent application for Novartis' anti-cancer drug Gleevec and submit that Section 3(d) of the Indian patents Act, Patents Act, 1970, which provided one of several grounds for rejecting the patent application, is invalid, illegal and unconstitutional.

In March 2005, India amended its Patents Act to comply with the 1995 World Trade Organisation's (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which requires 20-year patent protection for innovative medicines while allowing for public health safeguards. This included Section 3(d), a provision that is unique to Indian law and was included to protect public health. It states that patents would not be given for new forms, uses or minor modifications of existing drugs unless they differ significantly with regard to efficacy.

Between the signing of the 1995 TRIPS agreement and the amendment of the Act, patent applications were collected in a mailbox, to be reviewed once the agreement came into force. One of these was the 1997 application filed by Novartis AG in the Chennai Patent Office for imatinib mesylate, brand-named Gleevec, on the grounds that the beta crystalline salt form (mesylate) of the base imatinib was a new invention. Rights for exclusive access to the Indian market were obtained in 2003, and on that basis manufacturers of generic drugs were forced to withdraw their product from the market.

In 2005, the CPAA and the generic drug companies filed an opposition to the application before the patent was granted. Under Section 3(d) of the Act, they argued, the drug was not patentable because it was actually a salt form of an already known substance and did not display any enhanced efficacy. This substance was the active molecule imatinib, patented in 1993 before the 1995 TRIPS agreement.

In January 2006, the Assistant Controller Patents and Designs (Chennai) held that since imatinib existed naturally in a stable salt form, the 1993 patent covered both the free base imatinib and its salt form mesylate. The ruling was that Novartis failed to prove increased efficacy and, therefore, Gleevec was not patentable under Section 3(d) of the Patents Act.

On the basis of this ruling, generic drug companies resumed manufacturing the drug and selling it in the world market at a tenth of the price that Novartis was charging. In May 2006, Novartis filed the affidavits for the case that is currently being heard.

In the challenge to the Assistant Controller's order, Novartis argued that he did not give sufficient weight to the fact that patents for imatinib mesylate had been granted in 35 other countries, that the case law placed before him was ignored and that an in-house laboratory test performed by Novartis scientists on rats showed the 30 per cent increase in efficacy necessary for patents under Section 3(d).

The CPAA and the generic drug companies responded that each country was free to determine its own criteria for patentability and that the findings of patent offices in one country had no relevance in another as stated under Article 4 bis of the WTO Paris Convention. They also argued that Novartis failed to show that imatinib mesylate differed significantly from other forms of imatinib and questioned the independence of the investigation undertaken to show 30 per cent efficacy. They submitted that Novartis provided only 10 per cent of the research funding necessary to develop the drug. Dr. Brian Drucker of Oregon Health and Science University, whose laboratory identified the compound, received 50 per cent of his funding from the National Cancer Institute (of the U.S. government), 30 per cent from the Leukemia and Lymphoma Society (a U.S. non-governmental organisation), and 10 per cent from Oregon Health and Science Institute.

In the challenge to Section 3(d), Novartis argued that this aspect of the Indian patent law is arbitrary and illogical because it is not in compliance with the TRIPS agreement, particularly Article 27. It argued that this would undermine incentives for pharmaceutical innovation and that Section 3(d) was introduced in the Indian Parliament with the intent to disqualify Gleevec. Although Novartis recognised that TRIPS was a non-enforceable agreement and the Indian government was therefore free to repudiate its obligations under TRIPS, Novartis claimed that it was invalid and unconstitutional for Parliament to otherwise comply to all but one provision. It further claimed that the term efficacy was vague and discriminatory. It placed on record that it had a charitable programme Glivec International Patient Assistance Program (GIPAP), which disseminates medicines free of charge to those who were unable to afford them.

The CPAA and generic drug companies responded that it was not open to private companies or Indian courts to decide whether Indian patent laws were compliant with TRIPS. They contended that it did not violate the Indian Constitution and was passed by a competent legislature (the only two grounds for amending a statute in Indian law). They also argued that Section 3(d) was not vague and did comply with TRIPS. With regard to Article 27 they countered that Section 3d was valid because it did not discriminate as to the field of technology. They further made the case that 3(d) was a bona fide Act introduced to combat the problem of "evergreening". This, they argued, was an abuse of the spirit of TRIPS, which sought to balance public health and intellectual property rights. Evergreening is a technique companies use to stagger patent applications so as to extend market monopoly and prevent the entry of generic drug competitors. This keeps medicines out of reach for the vast majority of Indians. Such a result would be in contravention of Article 21 of the Constitution and other international conventions on the right to health.

Although Novartis initially alleged violation of Article 19(1)(g) of the Constitution (the right to carry on any business), that claim was dropped in the January 29 hearing. Instead, it alleged that Section 3(d) violated Article 14 of the Constitution, which promotes equality before the law and prohibits arbitrary statute. Novartis wanted to place on record the recently released report of the Mashelkar Technical Expert Group on Patent Issues. The High Court case was adjourned for counsel for the Government of India to submit a response. It will be resumed on February 15, 16 and 19.

Reactions to the case have not been indifferent. This is not surprising as there is much at stake on several counts. Novartis will want to make the most of its blockbuster drug and may file for more patents under the same criteria. Other multinational companies are waiting in the wings for their cue. According to V. Rangaswamy, Assistant Controller Patents and Designs, who spoke to Frontline, patent applications for some 9,000 substances are in the 1995-2005 mailbox. The Communist Party of India (Marxist), public health organisations and patients' groups are concerned that the sale of life-saving drugs, not only for a particular type of leukaemia but for a range of diseases, including tuberculosis, HIV/AIDS, asthma and diabetes, will be restricted. They fear that not only will the case set a precedent for the approval of drugs with these sorts of modifications but also a ruling that overturns Section 3(d) will mean that patents will be granted more widely. Since India produces many generic medicines at affordable prices, this will restrict access not just to the man on the street on India but to many patients across the developing world. They also fear that a precedent could be set for multinational companies to change drug laws in other countries. As Y.K. Sapru, Chairman of the CPAA told Frontline, "this is a global issue that will affect millions of people." The Indian Network for People with HIV/AIDS (INP+), the People's Health Movement, the Centre for Trade and Development (CENTAD) and Medicines Sans Frontiers (MSF) called on the company to cease immediately its legal action. Nearly a quarter of a million people from over 150 countries have signed a petition expressing their concern about the negative impact the company's actions could have on the developing world. The CPI(M) issued a statement calling on the government to defend the Patents Act and use international platforms to "mobilise opinion against the greed for profit".

Caught in the glare of publicity, Novartis put out a public statement addressing three points. These bring out the relevance to the case of long-standing issues surrounding liberal patentability.

First, Novartis sees India as a global competitor. Therefore, "[p]rotecting innovation is the foundation for massive R&D investments made by the pharmaceuticals industry that are vital to medical progress. Companies can continue to bring improvements and innovations to patients and societies only with effective patent laws. For a research-based company such as Novartis, patents are not negotiable."

According to Leena Menghaney, campaign manager, MSF, Delhi, excessive patenting creates a patent thicket and can prevent one company from investing in research and development in an area that another company's patent may improperly cover. Also, allowing patents on minor modifications such as these acts as a disincentive for companies to address new medical challenges; it is more cost effective for them to work on minor changes for patents on the same drug. She cites two studies, one by the MSF's Drugs for Neglected Diseases Initiative and one by the World Health Organisation's (WHO) Commission on Intellectual Property, Innovation and Public Health, whose report came out in April 2006, that found that since private pharmaceutical companies are driven by market potential, people in developing countries do not have the purchasing power to attract research and development for medicines for the diseases that most affect them. Instead, these companies are driven by the purchasing power for drugs for cosmetic changes and lifestyle diseases, such as anti-wrinkle creams, anti-obesity drugs and so on.

Second, Novartis has secured access to Gleevec in India and globally: "In 2006, our access-to-medicines programme reached 33.6 million patients. Novartis spent $ 755 million last year alone. ... The Glivec International Patient Assistance Program (GIPAP) is one of the most far-reaching patient assistance programmes ever implemented on a global scale. In India, 99 per cent of patients who receive Gleevec receive it free from Novartis [6,600 people]."

However, a response by Professor Brook K. Baker of the Northeastern University, School of Law, Program on Human Rights and the Global Economy, states that: "Corporate donations are not a sustainable solution: (1) they are frequently hard to access, (2) they are revocable, (3) they are not offered across the broad spectrum of patented medicines that poor people need, and (4) they are designed primarily to forestall generic competition by removing market incentives."

Third, Novartis states that its actions in India do not hinder the supply of medicines to the poor: "Our case does not challenge provisions that provide for access under international trade agreements, specifically the TRIPS and the Doha Declaration. These flexibilities allow production for export under compulsory licences that have been issued for public health reasons. They have been put in place to allow poor countries to safeguard access to medicines that do not have sufficient local production capacity."

But, according to D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, who spoke to Frontline from Spain, the functionality of such a provision relies on there being a cheaper alternative to buy. He cites the example of the compulsory licence the Thai government granted in November 2006 for import and production of efavirenz, a second-line HIV/AIDS drug, to deal with stock outs and high prices charged by the patent owner. Without cheaper alternatives from India, there would be nowhere else to go to buy medicines. According to a study conducted by MSF, 67 per cent of the medicines produced in India are exported to developing countries; approximately 50 per cent of the medicines distributed by the United Nations Children's Fund in developing countries come from India; in Zimbabwe, 75 per cent of the tenders for medicines for all public sector health facilities come from Indian manufacturers; the state procurement agency of Lesotho, the National Drug Supply Organisation, states that it buys nearly 95 per cent of all antiretrovirals (ARVs) from India. Even countries that manufacture their own medicines rely on imports of active pharmaceutical ingredients from India.

Dr. Yusuf Hamied, chairman and managing director, Cipla Ltd., points out that India and many developing countries are in a permanent state of crisis. And this requires a permanent compulsory licensing system. "India," he told Frontline, "cannot afford a monopoly. Any drug required in India should be allowed to be manufactured on payment of a 4 per cent royalty. I have never grudged the inventor a reward, but you cannot have a monopoly in a country like India." He points to the case of ARV treatment for HIV/AIDS. "They [multinational drug companies] were charging $12,000 a year until Cipla came along and started making them for a dollar a day."

The well-fed debate about intellectual property rights versus rights to public health has found fresh pastures to graze on. As arguments intensify, it remains to be seen to what extent the government will stand by the amendments it made two years ago to the Patents Act.

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