Opinion » Lead

Updated: April 15, 2013 14:43 IST

Why Novartis case will help innovation

    Achal Prabhala
    Sudhir Krishnaswamy
Comment (14)   ·   print   ·   T  T  

The Supreme Court judgment on Glivec is a blow for a patent regime with a higher threshold of inventiveness

On April 1, 2013, the Supreme Court upheld the Intellectual Property Appellate Board’s decision to deny patent protection to Novartis’s application covering a beta crystalline form of imatinib —the medicine Novartis brands as Glivec, and which is very effective against the form of cancer known as chronic myeloid leukaemia (CML). The judgment marked a crucial conclusion to a saga that has been several decades in the making. The story could start in 1972, if you like, when the Indian Patents Act of 1970 — grounded in the findings of the Bakshi Tek Chand and Ayyangar Committee Reports — came into force, enabling the explosive growth of the Indian generics industry into the world’s largest exporter of bulk medicines. Or, it could start in 2005, when India amended its patent law to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), a trade rule at the World Trade Organisation (WTO) that established a new global regime of intellectual property.

Key lesson

No matter where we start, the saga has come to a close, and the key lesson seeping through is that good sense won. Firstly, the Supreme Court decision was not about the patentability of the imatinib compound as such: that patent, having been instituted in 1993, is excluded from the purview of the Indian patent system, which is only obligated to consider patents filed in 1995 or after. The case the Supreme Court heard was whether Novartis’ beta crystalline form of imatinib was worthy of patent protection: its judgment was that this modification by Novartis did not satisfy the standard of inventiveness required under Indian patent law. Secondly, Indian patent law is as yet unchallenged at the WTO; Novartis’s earlier challenge to the constitutionality and TRIPs compatibility of Indian patent law was rebuffed by the Madras High Court in 2007 and no appeal was pursued. Thirdly, the Supreme Court judgment effectively recast Indian patent law as being nuanced and original in its meshing of domestic political economy concerns with the integrated global economy it participates in.

The outcome of this nuance and originality? Imatinib will continue to be available to patients in India from multiple suppliers at a price 10 times less than the current cost of Glivec; approximately 27,000 cancer patients in the country who pay for their imatinib will continue to have access to the medicine in the public and private sectors at the lowest cost possible; and should Novartis ever suspend its charitable programme, all 15,000 of the cancer patients who currently receive imatinib free from Novartis will have similarly equitable access to the medicine.

Hackneyed narrative

Despite substantial progress in the popular understanding of the place of patents in a developing country like India, a hackneyed narrative has emerged, especially in the pink press, warning us that this judgment will have a negative impact on innovation in the long run. As it happens, one of the most useful outcomes of the Supreme Court judgment is a renewed focus on what innovation is — and how it should be rewarded. Behind the headlines foretelling various levels of doom — the death of innovation in the country and the end of research for diseases which matter to us — is the popular idea that patents are a proxy for innovation. After all, patents are widely understood as short-term monopolies enshrined in the law and provided as incentive to inventors on the evaluation of publicly disclosed innovation. It would seem as if patents are synonymous with innovation. Except, this is not quite the case.

Minor variations

In the last three decades, the global gold rush for patents has been dominated by filings for minor and mostly inconsequential innovations — at the expense of breakthrough innovation. In large part, this is because weak standards in the patent laws of developed countries (led by the U.S. and Europe) have explicitly encouraged this shift. The whittled-down, lobbied-out, stretched-beyond-recognition patent regime that is characteristic of these countries — and other less-developed countries where they influence the polity — is unfortunately the ‘norm’ to which India now finds itself an ‘outlier.’ But the outlier is a solution: the norm is the problem. A British Medical Journal report from 2012 succinctly summarises the global research situation for new medicines: “This is the real innovation crisis: pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures.”

If the patent regimes of developed countries are dominated by minor patents, many or most of which have no demonstrable innovation to show, why are they so avidly pursued by global pharmaceutical companies? A Public Library of Science study from 2012 points to the answer: secondary patents extend the patent life (and thereby, the monopoly pricing) of pharmaceutical products long beyond their designated life span, adding, on average, between six and seven years to the patent life of the original compound. Any patent regime which incentivises secondary patents with weak laws will only serve to extend commercial monopolies at low levels of innovation — and will no longer provide the incentive for genuine innovation. The genius of the Supreme Court judgment on Novartis’s patent application lies in restoring the connection between patents and innovation by upholding and legitimising a regime with a higher threshold of inventiveness.

Will Indian patent law change the way the global pharmaceutical industry innovates? No; not immediately, at least. Could it positively affect pharmaceutical innovation in the long run? Absolutely. In the present day, India comprises 1.3 per cent of the global pharmaceutical market by value. That figure, in itself, is why changes to Indian patent law will not help global pharmaceutical giants break free from the incentive model they are prisoners of. At most, they might have to learn how to compete in a crowded market for some of their less original products. The symbolic opportunity presented by the Supreme Court’s backing of Indian patent law, however, is a real threat — and pharma CEOs in New York, London and Basel get it. In the long run, as more countries understand the Indian model, appreciate its legitimacy, and reflect on its benefits to both public health and innovation, they might want the same. And if that happens, when that happens, we may begin to see real, positive change in the way pharmaceutical innovation works.

Empowered scenario

The Indian Patents Act of 1970 was a game changer. From the perspective of 43 years of experience, we can safely say that it shook up the pharmaceutical industry and altered it irreversibly. The new, empowered scenario was most vividly illustrated during the peak of the HIV/AIDS treatment crisis in the first decade of the 21st century, when countries like Brazil, Thailand, South Africa and, of course, India, took health security into their own hands and legitimately moulded their domestic patent systems to respond to the crises within. The Indian Patents Amendment Act of 2005, which gave us the law we have today — a law which was ratified last week — has the potential to change the game once again. This time, however, the change might come more slowly; the hell the Indian government was dragged through has not been lost on anyone. The lengthy trials, the frequent challenges, the full-scale vilification, and every other scare tactic thrown our way by a public-relations juggernaut (along with the implicit support of many developed country governments) was not for nothing. And the Supreme Court judgment is all the more important as a result, for it shows a new way may be hard and tiresome, but is ultimately possible.

(Achal Prabhala works on access to medicines; Sudhir Krishnaswamy is on the faculty of Azim Premji University, and is the Dr. B.R. Ambedkar Visiting Professor of Indian Constitutional Law at Columbia Law School)

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Indian Judicial system has again proved its ability and strength to block all attempts from multinational pharmacutical giants to cash upon the life of thousands of patients those who have been fighting for their life either in hospital bed or at home. The decision to provide free of cost medicin regardless the company withdraw its charity is another land mark in this direction. Innovation and patent are two separate thing, innovations should be for serving humanity especially whatever in the field of medical science, patents should not have only one objective to amass profit.

from:  Appade Rajeevan
Posted on: Apr 16, 2013 at 00:06 IST

not so soon apple copy phones will be sold at every place,while the SC rules technology is basic right of human being.
We need to rethink,while curbing other,because others can do the same..

from:  abhinav
Posted on: Apr 15, 2013 at 15:03 IST

Mr Pramod Chakrawarthy has taken an opposite stand to the views
expressed in the article. Would be much obliged if he gives more
specific details of the cases he is citing.
I do agree with him; one has to be careful in deciding whether the
new innovations are truly more effective or not.
But, such a decision can not be left to the industry. I work in the
oil industry and my wife in the medical profession. We are both
aware how much politics plays a role in publications even in so-
called esteemed journals. Let the courts appoint a committe of
experts and let their verdict be final.
Yes, there is no perfect solution to this issue. But, the current
mess where the rich private enterprises armed by their highly paid
accountants and lawers can not be allowed to hijack matters relating
the health and survival of the general public.
In the current example, after reading all that is now available in
the public domain, the verdict of the judiciary in India appears
very appropriate.

Posted on: Apr 15, 2013 at 14:42 IST

Clear conception of the story behind the wily West's need to patent
every aspect of the innovation, their arm-twisting strategies and never
ending aspiration to move the goal post for ever will hopefully not work

Come on Rise up India, We are second to None!

from:  kumar
Posted on: Apr 15, 2013 at 13:47 IST

The recent Supreme Court verdict on Novartis case is in the right
direction,for it upholds the right of patients to have life saving
medicine at affordable cost.Moreover,it will have an impact on similar
cases in the coming future. The Pharma companies cannot exploit poor
patients in the name of innovation unless their products show 'improved
efficiency' as per the Supreme court verdict.And,the threat that they
will not invest in Research and Development projects in India is

from:  K.Anu
Posted on: Apr 15, 2013 at 13:32 IST

The Supreme court has taken a very rational decision by denying the patent protection to the crystalline form of Glivec, and thereby keeping a check on "EVERGREENING' of the drug. The time period provided to a patented drug is sufficient to generate sufficient incentives for the innovator, but extending the patent by generating the salt form without any increment in efficacy is just unacceptable.
The healthcare sector primary purpose to serve the mankind and to give it a healthy life. It shouldn't be viewed through business perspective everytime.

from:  dinesh.b
Posted on: Apr 15, 2013 at 12:39 IST

Companies know how to tweak the existing Patents and make their own Patent and claim that we spent lot of money in innovation. Real innovators doesn't work to make profit for them self, instead they work to address the real social issues. This is true for any industries. Ex: Claiming Turmeric as a medicine is a typical case study of invention & Patent (As simple as Black swan doesn't exist).

from:  Sanjeev
Posted on: Apr 15, 2013 at 12:30 IST

Patents are meant for the protection of genuine innovations and not for
the manipulations for personal profit. Also innovation and patents that
common people cannot access and afford is of no use for the society. SC
decision will help in affordable health care in the future.

from:  Akshay Dhadda
Posted on: Apr 15, 2013 at 10:20 IST

Rightly said:
"Patents are not a proxy for innovation"

from:  vikash
Posted on: Apr 15, 2013 at 10:09 IST

If companies pay more to research scientist than to attorney's to fight cases, it will help innovation. Also patent award should not be for more than 5-7 years. Companies are more interested in illicit profiteering than helping cause of science & innovation.

from:  Shaleen Mathur
Posted on: Apr 15, 2013 at 08:58 IST

Legally speaking, I'm sure there are many reasons why this particular
case went this way and everyone can pat each other's back about the
push back to "minor" innovation.

From a medical perspective, this is a terrible idea. This change to
the Glivec molecule makes it 30% more effective. And there are many
examples of such "minor" or "incremental" innovations which have
changed the standard of care (for example, atorvastatin, which was 4th
or 5th in the stream of statins, which wildly exceeded the
effectiveness of the other statins and saved billions of lives).

The Indian Supreme Court has effectively said that such innovation is
of no value. While it will not hurt MNCs, which make no money in India
anyway, it does chill the innovation environment in India.

I cannot see any sane money going towards the innovation that we need
in India given this ruling. Short term gain, long term pain!

from:  Pramod Chakravarthy
Posted on: Apr 15, 2013 at 07:43 IST

Excellently written.

from:  Kamal
Posted on: Apr 15, 2013 at 07:25 IST

While the decision of the SC may temporarily restrain the pharmaceutical companies from
extending the time limit of dictating the price of their existing patented medicines with
marginally modified generic composition of such drugs and their repatenting,the decision
raises another basic question: who is to arbitrate if such modified drugs are to be treated as
'new'drugs qualifying for fresh patenting or not,when,in practice,it is seen that such
formulations ifor crucial ailments drive out the existing ones in short spans of time.
This is,however,not to defend the stranglehold that the major pharmaceutical companies
have on the price line of crucial drugs thru the patent route,notwithstanding the billions of
dollars and decades of research that they commit to,in producing these drugs and the hidden
possibility of huge 'malpractice' costs that they may have to she'll out to the scavenging law
firms that are lying in wait for even insignificant adverse reactions to such drugs.

from:  Narayanaswamy Venkataraman
Posted on: Apr 15, 2013 at 07:10 IST

Supreme court has delievered a verdict keeping in mind the greater social responsibilty our judiciary is endowed with.It would prevent 'evergreening' of patents , a practice resorted to by pharmaceuticals MNCs.Article 3(d) of Indian patent act 1970 is definitely a step in the right direction given the necessity of generic medicines in India.The focus on innovation will see a new light of life because of this landmark verdict of Supreme court.Hats off to the verdict!!

from:  Divya Gupta
Posted on: Apr 15, 2013 at 01:11 IST
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