Novartis Persists With Challenge To Indian Patent Law Despite Adversity

By Tove Iren S. Gerhardsen
Following the rejection of a patent application for one of its medicines, Swiss pharmaceutical company Novartis has taken the “unprecedented action” of challenging India’s patent law in a high court, arguing that it is unconstitutional as well as in breach of international trade law, it said.

“The filing of writ petitions with the Indian High Court demonstrates Novartis’ strong commitment to defending international intellectual property standards and its right to obtain patents for its innovative compounds under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS),” a Novartis press officer told Intellectual Property Watch.

It is a “question of principle,” Novartis CEO Daniel Vasella told Intellectual Property Watch, adding that “we would undermine the whole system” if the company gave in.

The drug in question has been approved by patent offices in 40 countries, Novartis said, but at the moment there are only some 40 patients paying for its drug in India.

Another South Africa?

The matter has invoked comparisons to a hotly contested case in South Africa a few years ago which led to a withdrawal of the case. “This has South Africa written all over it,” said Ellen ‘t Hoen of Médicins Sans Frontières’ Access to Essential Medicines Campaign. The only difference, she said, is that this time it only involves one company instead of 39.

The South Africa case dates back to 18 February 1998 when 39 companies took the South African government to court for its Medicines and Related Substances Act, which would allow for compulsory licenses and parallel import of medicines to South Africa, allegedly in violation of patent rights, sources said. After pressure, the group withdrew its case on 19 April 2001.

This time it is about Novartis’s cancer drug, Gleevec (imatinib mesylate). After Novartis was denied a patent on the drug, it first challenged the decision of the India Controller General of Patents and Designs (which administers the patent office) in court, and then argued that aspects of the Indian Patents Act infringe international trade law relating to intellectual property rights.

The case has raised concerns among non-governmental groups. “We are very concerned that the changes sought by Novartis [to] the Indian Patents Act could negatively affect access to essential generic medicines not only in India but also in all the developing countries that import Indian generic medicines,” the Berne Declaration, a Swiss non-governmental organisation, wrote in an open letter to Vasella.

The 19,000-member Berne Declaration has worked since 1968 to create sustainable and democratic North-South relations through the use of research, public education and advocacy work, it said.

The letter is signed by, among others, former Swiss president Ruth Dreifuss, who also chaired the World Health Organization Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) that published its report in April 2006. The letter also is signed by the Association of European Cancer Leagues, the Swiss Cancer League, and 16 other organisations. Novartis has not replied to the letter and is not withdrawing the case, sources said.

“[We] act in the long-term interest of patients,” Vasella said, adding that “only a handful,” meaning some 40 patients, pay for Gleevec in India, while “several thousands [we] give out for free.” A Novartis spokesperson said that 99 percent of patients, or some 6,000 patients, receive the drug for free in India through Novartis’ Glivec International Patient Assistance Program.

It is “really frightening” that “five years after the South Africa case, Novartis has not learned anything,” Berne Declaration Campaign Director Julien Reinhard told Intellectual Property Watch.

The Chain of Events

In 1998, Novartis filed a patent application for Gleevec in one of India’s four patent offices, the Chennai Patent Office. Based on the patent application and a particular provision of the Indian Patents Act, Novartis at the end of 2003 obtained exclusive marketing rights until the patent was granted, according to the Berne Convention.

With the application pending, and once the Indian patent law was amended in March 2005 to be TRIPS compliant and the “mailbox facility” opened (it had accepted applications during the 10 years since India joined TRIPS), a number of Indian patient groups filed a “pre-grant opposition,” which is possible under the Indian patent law (IPW, Public Health, 30 March 2006).

The patent office refused Novartis’ application in January 2006 on the grounds that the product was not innovative enough.

Patents may be granted for the active substance in a medicine or the process by which it is made. “However, whether a form of the product or a new use or combination (salt or isomer) should also be patented is left to each country under the TRIPS agreement” to decide, Anand Grover, an Indian lawyer of Lawyers Collective, who has been involved in the case on the patient side, told Intellectual Property Watch.

“By Section 3(d) of the Indian Patents Act such forms are not patentable unless they differ significantly in properties with regard to efficacy,” he said.

The Chennai Patent Office rejected the Gleevec patent application on the grounds that “(both the salt and the chrystalline) form was not new and did not involve an inventive step,” Grover said.

Section 3(d) states: “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant,” is not patentable.

But Novartis takes issue with this section. “India should not establish additional requirements for patentability beyond novelty, commercial applicability and non-obviousness,” Novartis said.

Novartis then took the cases to the High Court in Chennai (new name for Madras) in May 2006, challenging the order of the Chennai patent controller but also challenging the validity of Section 3(d) of the Indian Patent Act (from 1970 but amended in 2005) is not compliant with the TRIPS agreement, according to sources.

The case is now in the high court at Madras. More hearings are planned, a source said. Novartis AG (the holding company) and Novartis India have filed separate cases, which Grover did not know why, but he suggested it was to add more money as they have “a lot of money to waste.”

The Cheaper Version

On the basis of the exclusive marketing rights granted to it in 2003, Novartis filed infringement suits in the Madras High Court and got injunctions restraining all but one of six generic companies from producing cheaper versions of the product for the Indian market as well as for export, Grover said.

“As against the other generic company, Novartis filed the infringements case in the Bombay High Court. It interpreted the case differently and refused to grant the injunction to Novartis. As a result, that one company continued its production,” Grover said.

The Berne Convention points to the fact that the annual price of generic treatment per patient for Gleevec used to be $2,100, while Novartis’s price is $26,000. But Novartis has a different view.

“Generics will not solve the challenges of access for those who cannot afford drugs at any cost, and this applies to the majority of patients in India. Based on data from the World Bank, the cost of one year of treatment with generic imatinib alone is four to five times a person’s annual average income,” the spokesperson said.

Vasella said that generic companies are often behind patient groups in India, and said he would not be surprised if they gave money to the groups. [Editor’s Note: this assertion is false, according to the patient group in this case.]

Allowed Under TRIPS?

The Doha Declaration, agreed to at the 2001 WTO ministerial meeting in Doha, Qatar, says (paragraph 4 under public health) that the TRIPS agreement “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”

The Berne Declaration said that this is one of the recognised flexibilities of the TRIPS agreement, which have been highlighted by, among other things, the 2001 United Kingdom Commission on Intellectual Property Rights report and the CIPIH report.

The Indian government has maintained that its section is compliant with TRIPS, a source said.

“As a manufacturer of generics, Novartis understands and recognises the contribution of generics once drug patents expire,” Novartis said. “Our concern is with the non-recognition of intellectual property rights that ultimately help sustain and advance pharmaceutical research and development.”

Tove Gerhardsen may be reached at tgerhardsen@ip-watch.ch.