Novartis will not invest in Indian-based R&D activities following Glivec ruling

Switzerland-based Novartis has announced it will not invest in research and development (R&D) activities in India, according to reports in the Hindu. The move follows a ruling by the Indian Supreme Court on Monday (1 April) which saw the court reject a petition seeking patent protection for Novartis' Glivec (imatinib mesylate) drug. Glivec is used in the treatment of certain leukaemias and soft tissue sarcomas. The patent application relates to a form of Glivec which has an enhanced crystal form. Glivec retails at some USD4,000 per month, with generic alternatives reportedly retailing at USD73 (source: Al Jazeera). It however remains unclear to which price i.e. retail, wholesale etc, that Al Jazeera refers to.

The ruling by the Supreme Court ended a six-year legal battle to obtain an Indian patent for Glivec. In its ruling the Supreme Court ruled that Glivec could not receive an Indian patent as it "did not satisfy the test of novelty or inventiveness". In 2005 India introduced new patent regulations requiring patent applications to demonstrate inventiveness, and limiting the ability for the filing of patents for products which provide minimal inventiveness over existing products.

Novartis has reacted angrily to the ruling, suggesting that it "provides clarification on Indian patent law and discourages innovate drug discovery essential to advancing medical services for patients". Novartis' argument for the implementation of a patent appears to hinge on the idea that Glivec in its original form did not receive patent protection and therefore the application for a patent was not based on an incremental invention but an invention. In defending its position over the costing of Glivec versus generics, Novartis has stated that some 95% of Indian patients receive Glivec free of charge based on a donation programme, with the remaining patients receiving assistance in costs through reimbursement, insurance, or co-payment schemes. A copy of the Novartis press release regarding the ruling can be accessed here.

In contrast to Novartis, patient groups and charities have welcomed the ruling. A lawyer for Medecins Sans Frontiers (MSF) quoted in coverage by Al Jazeera, suggested that had the Supreme Court ruled differently, it could have damaged India's efforts to prevent "evergreening" of patents in the Indian market place, affecting patients' access to drugs in India and beyond. The term "evergreening" refers to a life cycle management strategy whereby minor alterations to a product are patented with the aim of extending a product's lifetime before patent expiry .

Outlook and implications

If agreed, the move may have allowed pharmaceutical companies to seek patents for products that were rolled out prior to the adoption of an enhanced patent environment in 2005 and which have undergone incremental invention. Such a move would be likely to have a severe impact upon the availability of generic medicines in the country.

Some have suggested that the ruling has implications for innovative companies of all industries, operating in the market place. This argument is based on the assumption the ruling represents a toughening of a stance against the issuing of patents. In terms of Novartis, the company has suggested in reports that the move would see the company potentially withhold the rolling out of new drugs in India. Indeed other companies may follow suit should they deem the patent environment in India to be unfavourable. This argument may gain ground based on a number of recent legal cases, such as the Indian Patent Appeals Board's decision to reject the issuing of a compulsory licence covering Bayer's Nexavar (sorafenib; (see Germany – India: 5 March 2013: Indian IP board rejects Bayer's appeal over Nexavar compulsory licence) and the suggestion that Indian authorities may be considering issuing compulsory licences against three other oncology drugs (see India: 14 January 2013: India mulls issuing compulsory licences for three oncology drugs).

This said, one could argue that the ruling reflected complex legal considerations given that the patent application regarded an altered formulation, despite the legal arguments regarding the lack of a patent for the original form. On these grounds it is likely that many companies may see the patent environment as being favourable where the legal arguments are less complex. Indeed the Indian government is considering the adoption of measurers to see pricing controls brought in for patented drugs. These measures suggest that the Indian government was looking to bring in pricing controls, rather than unfavourable patent activities, to lower the cost of new medicines in the country (see India: 7 March 2013: Committee on Pricing Negotiations for Patented Drugs in India seeks comments on proposals).

The ruling could have had quite drastic implications for the supply of medicines to emerging markets. India remains one of the leading exporters of generic medicines, especially to developing countries. If the ruling had gone the other way, any likely hardening of patent rulings could therefore impact negatively upon access to medicines in these regions of the world. The move has therefore been seen as safeguarding access to medicines, especially in the treatment of costly and chronic diseases such as HIV/AIDS. The reliance upon India is especially strong given that chronic underfunding and development of pharmaceutical companies in these markets inhibits the development of sufficient domestic production.