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The big pharma feud


Curiously enough, the antagonists in the pharma patents battle seem to be working towards a similar goal - a better deal for patients. But one is fighting for affordability and access, the other is arguing for innovation and discovery.

The conflict is this: innovators want to cover their costs by pricing their medicines high, while generic medicine manufacturers want to roll out cheaper copies of these molecules and provide cheaper medicines to those who cannot afford it.

This is also the crux of the dispute between Novartis and the Indian government. The Swiss drug major's quest for patent protection on its wonder blockbuster drug Glivec (Gleevec in the US) entered the Supreme Court this week for a final hearing. The result of this case would have an impact on supply of cheap medicines from India and on the future of the patent system and R&D in the country, making it a landmark case.

Novartis took its case to the apex court after Glivec was refused a patent in 2006 on the grounds the drug was not a new molecule but an amended version of a known compound. Novartis has challenged this clause which is a public health safeguard against 'evergreening' of patents or extending their life on trivial and frivolous grounds, and opposed India's tough patentability standards.

The company's anti-leukaemia drug Glivec, which contains a beta crystalline form of the drug imatinib, was refused a patent in January 2006, based largely on this provision. Since then, the company has been engaged in several challenges, before the Madras High Court, and now the Supreme Court, all aimed at relaxing the patenting norms.

Let's look at both the arguments.

Novartis argues that incremental innovation is not 'evergreening'. Drugs with incremental innovations do offer important values in different ways - they may be more effective in treating a particular medical condition, reduce side-effects or improve patient compliance through improved method of administration.

In this case, the company claims that its scientists developed the beta crystal form to make it suitable for patients to take in a pill form that would deliver consistent, safe and effective levels of medicine. Says Kewal Handa, former MD, Pfizer India, and a strong votary of intellectual property rights of drug biggies: "Innovation has a cost. If India wants to become a global player, it has to recognise and respect patents. " The MNC lobby argues the Indian Patent Office has not yet developed clear and transparent guidelines defining 'efficacy'.

Under Section 3(d) of the Indian Patent Act salts, ethers, polymorphs, metabolites, pure form, particle size, isomers, complexes, combinations and other derivatives of known substance are considered nonpatentable, unless they differ significantly in properties with regard to efficacy.

"The patent rejections demonstrate that the term 'efficacy' is being construed in a sense that normally only drug regulators are qualified to judge, " says Tapan Ray, director general, OPPI, the industry body which protects interests of MNCs.
Opposing the company's claim, legal and public health experts say Novartis wants minor improvements to justify an additional 20-year monopoly. Says Tahir Amin, co-founder and director, IP, Initiative for Medicines, Access and Knowledge: "Section 3d is a necessary pre-emptive mechanism to curb pharmaceutical patenting practices like life cycle management to keep away generic competition, resulting in higher prices and less access. "

Attempting to extend monopoly rights on a drug or patent abuse is a practice among most drug biggies while policymakers wrestle with the issue of weeding out "low-quality" patents, says Kajal Bhardwaj, a lawyer working on health.
In the US, any frivolous type of patenting is challenged in courts by generic companies under the Paragraph IV challenge. About half of the patents challenged, are revoked. In Europe, there is only a post-grant opposition system where such secondary patents are challenged. India, like other developing countries, follows an examination system under which patent applications are studied locally before being approved.

Indian generic medicines are among the cheapest in the world, largely because the patent regime kicked in only in 2005, and because of the strong capability of domestic companies to roll out affordable copies, with a huge portion of the $10 billion drugs being exported.

Though India will account for an insignificant part of Glivec's global sales - which totalled nearly $5 billion globally - the win may be crucial for MNCs. The case has heightened tensions for the Big Pharma, following a decision by the patent office in March stripping Germany's Bayer AG of its exclusive right to sell another exorbitantly-priced cancer drug, Nexavar. Another unusual judgement by the Delhi high court last week favoured domestic firm, Cipla, caught in a spat with Roche on cancer drug, Erlocip.

Glivec has become a "posterboy" for MNCs seeking clarity on the patent laws. They want to know whether investing in the development of better medicines for India is a viable long-term option, says Ranjit Shahani, Novartis India VC and MD (See interview ). This is because Big Pharma's growth in profits will come from emerging countries including India, China, Brazil, Mexico, Thailand. "They want monopoly rights in those markets, and want the US and EU to back them up through pressures on India to grant easier patents, to extend patent terms, to enhanced enforcement standards, and to enact new data-exclusivity monopolies, " says Professor Brook K Baker of Health GAP (Global Access Project).

On the other hand, the implications of a Novartis victory would mean India would have to grant more patents than it currently does, lowering the bar on patentability. In the short run, this make it easier for companies like Novartis to get patents on drugs already in the public domain, and in future will enable companies to extend the life of the patent and enjoy a monopoly, and hence command a higher price. Though the patent will not stop generic production of Glivec by the domestic producers because they were 'grandfathered' in when the India Patents Act was amended in 2005, it may prevent other affordable copies, and lead to higher prices of generic versions (they would have to now pay a royalty to Novartis). The drug is already unaffordable for millions at an eye-popping Rs 1. 2 lakh per patient per month, while generic companies sell their version for Rs 8, 000-10, 000.

A victory for Novartis would open the floodgates to evergreening. "This malpractice prevents and delays entry of important pharmaceuticals into the public domain, at which point cheaper generic versions of those drugs could be produced locally or imported. Generic competitors are left with two options: either to wait until all the patents on the medicine have expired, or to launch the medicine and run the risk of very expensive litigation, " says Leena Menghaney of MSF. The entry of generic anti-retrovirals in 2001 slashed prices by 99 per cent over 10 years.

The implications of a Novartis victory in weakening the interpretation of Section 3(d) would not be limited to the patenting of Glivec or on cancer patients alone, experts point out. "A Novartis win would slowly choke this lifeline of affordable generic medicines from India, forcing prices sky-high, " says Michelle Childs, director, policy advocacy for MSF.

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