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Court prescription to decide fate of drug patents

Mumbai/London, Aug. 20 (Reuters): The Supreme Court will hear final arguments starting this week in a landmark case over drug patents that could change the rules for the country’s healthcare sector and potentially curb its global role as a supplier of cut-price generic medicines.

The Supreme Court hearing pits Swiss drug maker Novartis AG against India's patent office, which has refused to grant a patent on the company's cancer drug Glivec on the grounds that it is not a new medicine but an amended version of a known compound.

A patent would recognise Novartis’ property rights, in a blow to generic drug makers who supply medicine to 1.2 billion Indians and to poorer nations across the world, although generic forms of Glivec launched before 2005 would stay on the market.

The case has rekindled tensions between big pharma firms and India, following a decision by the patent office in March to strip Germany's Bayer AG of its exclusive right to sell another costly cancer drug, Nexavar, because most Indians cannot afford it.

The hearing involving Novartis starts on Wednesday. It is expected to last several weeks, with a verdict a month or two later.

Western firms see huge potential in India’s rapidly growing economy but are wary of lax protection for intellectual property. They argue India is failing to recognise valuable medical innovation.

Their critics — who include international aid groups and Indian generic drug manufacturers — say a win for Novartis will jeopardise the supply of cheap medicine to hundreds of millions of people in India and around the world as India is the world’s biggest exporter of cheap generic drugs.

“The stakes are very high on both sides,” said Leena Menghaney, a manager in New Delhi for Medecins Sans Frontieres (MSF), which relies on Indian-made generic drugs to treat AIDS and other diseases in Africa and many poor countries. Novartis' drug was approved in 2001 in the US, where it is sold under the trade name Gleevec and can cost $70,000 a year. Patients take one or two pills a day, depending on the dosage.

Discount programmes mean it is available for a lot less in poor countries and in India more than 95 per cent of patients receive it free of charge under a company donation scheme, according to Novartis. Indian generic versions, meanwhile, cost about $2,500 a year.

Indian generic companies can produce drugs at a fraction of the cost of originator firms such as Novartis or Bayer because their costs are lower and they do not need to plough money back into future research.

Patents vs patients

Menghaney fears a decision by India’s top court to make it easier for drug makers to win patents by giving way to Novartis will undermine India’s position as “pharmacy to the developing world”.

Novartis says such fears are unfounded, arguing there are many legal ways to get cheap generic drugs to poorer nations.

A loss for Novartis in the case would not have a big financial impact, since India is never likely to account for more than a small fraction of Glivec’s global sales, which totalled $4.7 billion last year.

The real concern for the industry is that a rebuff will confirm India as a country where patents are exceptionally hard to secure.

Gilead Sciences Inc is also fighting a patent rejection on its HIV/AIDS medicine Viread in an Indian court, while Roche Holding AG is battling to defend its cancer drug Tarceva from cut-price generic copies.

At the heart of the Glivec case is a dispute over what level of innovation is needed to secure a patent in India, where section 3(d) of the Indian Patent Law sets strict restrictions on multiple patents for one drug.

 
 
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