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last, some good news! In today’s world, intellectual
property disputes only too often are settled in ways
that benefit large corporate bodies and harm both smaller
producers and consumers by granting monopolies and causing
prices to rise. Despite the pious claims of the WTO
declaration on TRIPS and public health, this has even
been true for many drugs that have life-saving implications,
as multinational pharmaceutical companies have been
the most active and aggressive in securing and protecting
their patent rights and forcing patients to pay very
high prices for essential drugs.
The TRIPS Agreement was designed to contain safeguards
to such a process of concentration and control, but
even the subsequent clarifications issued by the WTO
have not really worked to prevent this process. The
Indian patent law that was introduced to make the laws
WTO-compatible do contain safeguards that were put in
after intense pressure from activist groups, concerned
citizens and the Left parties, but this law has not
really been put to the test until now.
That is why a recent judgment in an Indian case is so
significant, since it was the first major instance when
a major multinational company has challenged the terms
on which a patent is granted. It is also likely to have
far-reaching implications not only in this case but
also across the world, where many thousands of people
depend upon the cheaper life-saving medicines produced
in India.
On August 5, the Madras High Court rejected the claim
of the multinational drug company Novartis, for a patent
on a life-saving drug for leukaemia. This chemical compound
(imatinib mesylate) is marketed by Novartis as Gleevec
in Europe and Glivec in India, and is used to treat
chronic myeloid leukemia. Novartis has already patented
the drug in 35 countries.
At the heart of the case was the question of whether
this drug is actually a new invention or simply a minor
modification of an older, off-patent drug. TRIPS requires
that patentable inventions be new and involve an "inventive
step." The Indian Patent Act also contains provisions
ensure that only truly innovative advances will be patented.
For example, Section 3(d) of the Act forbids the patenting
of derivative forms of known substances unless they
are substantially more effective than the known substance.
These provisions are intended as safeguards against
well-known anti-competitive practices of patent holders.
The exploitation of minor and insignificant changes
to ask for a new patent is a very common practice among
large drug companies, who frequently use this as a method
of prolonging monopoly control over products that would
otherwise move off the patent list, in a practice known
as "evergreening" or "spurious patenting".
It was this provision in the Indian Patent Act which
was challenged by Novartis. Indian drug companies, NGOs
and other stakeholders have been arguing that the drug
Glivec is a simply another version of an old drug invented
before 1995, which cannot be patented any more and is
now made generically in India. However, Novartis had
argued that Gleevec is a major improvement on the older
version and therefore "new" because it is supposedly
more easily absorbed by the body.
A huge difference in price (and therefore profits) was
at stake in this. Novartis sells Gleevec in India and
similar countries at a price of $26,000 per year per
patient. Indian generic drug manufacturers offer the
drug at less than one tenth of that price – and even
that is considered far too expensive for the majority
of leukemia patients in a poor country.
Fortunately, the Madras High Court has rejected Novartis’
claim to novelty, and thereby validated the decision
of the Indian Patent Office not to grant a patent for
Gleevec. So this is a significant victory for leukemia
patients in India, hospitals treating the poor with
this drug, and other stakeholders.
But the positive effects of this judgment may well extend
beyond that. Apparently Novartis has already declared
that it will not appeal to the Supreme Court against
this decision. And the Swiss government (Novartis is
a Swiss-based multinational company) has also announced
that it does not intend to pursue the matter with the
TRIPS tribunal at the WTO.
This means that this particular instance can become
an important precedent for the Indian drug industry
and for millions of patients worldwide who are able
to use cheaper Indian generic drugs to treat life-threatening
diseases. The Indian drug industry grew up and flourished
under a laxer patent regime from the 1970s, which allowed
only process patents in pharmaceuticals and thereby
opened up the possibility of "reverse engineering" in
drugs. This created a vibrant domestic industry for
producing generic drugs at very cheap prices by international
standards.
In particular, low-cost anti-retrovirals (used to treat
AIDS patients) are being widely used in Africa and other
low-income countries. This too was the subject of fierce
legal battles between groups of multinational drug companies
and African governments, who were ultimately able to
allow for parallel import of these drugs from India.
Having lost the legal battle, drug companies then started
questioning the quality and efficacy of Indian drugs,
arguing that they were cheap because they were sub-standard.
However, the World Health Organisation, on the basis
of systematic study, has declared that it has no concerns
about the quality and efficacy of Indian drugs. As a
result, they are now widely preferred not only by developing
country governments but also by international aid agencies,
especially those dealing with HIV-AIDS.
The attempt by Novartis to curb the production of this
generic drug in India has to be seen in this context.
Fortunately, its lack of success suggests that other
generic production can continue to provide cheaper alternatives
for life-saving drugs in poor countries.
However, this does not mean that there is any reason
for complacency. Novartis and other multinationals are
likely to continue to challenge provisions of the Indian
patent law in the grounds of being incompatible with
the TRIPS, even though that is "patently" not the case.
It should be noted that Section 3(d) of India's patent
law does not necessarily impose stricter requirements
than are used elsewhere – indeed, even the US Patent
Law (which is widely recognized to be the strictest
of all) allows for the rejection of patents on drugs
that have structural similarities to existing chemical
combinations.
So this is likely to be only the first battle in what
may turn out to be a long war. All the same, the victory
is sweet.
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