Shift in Novartis strategy
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- Published 2.04.13
|Ranjit Shahani in Mumbai on Monday. (Fotocorp)|
Mumbai, April 1: Novartis, the $56.7-billion Swiss pharmaceutical giant, has decided not to invest in research and development in India after the Supreme Court today dismissed its application for a 20-year patent on Glivec, its biggest selling pharmaceutical drug that raked in revenues of $4.7 billion in 2012.
Ranjit Shahani, vice-chairman and managing director of Novartis India Ltd, told reporters in Mumbai that the pharmaceutical giant would continue to introduce products in the country but would shift its R&D investments to “favourable destinations”.
The verdict handed down by Justices Aftab Alam and Ranjana Prakash Desai of the Supreme Court means that global pharmaceutical giants will need to carefully negotiate a tripwire that Section 3(d) of the Patents Act of 1970 poses while trying to patent new molecules in India.
Section 3(d) restricts the prospect of winning a patent on a new variant of an already known drug unless it can be clearly established that it is proven to be innovative and a more efficacious drug.
The verdict in the Novartis case – a litmus test for the applicability of Section 3(d) – means that poor cancer patients will be able to afford cheaper generic versions of Glivec from companies such as Cipla, Ranbaxy, Sun Pharmaceuticals (India) Ltd, and Natco Pharma.
Experts here said if Novartis had won the case, it would have enjoyed patent protection for the drug till 2026.
“Novartis has never been granted an original patent for Glivec in India,” Shahani said. “We strongly believe that original innovation should be recognised in patents to encourage investment in medical innovation especially for unmet medical needs.”
Shahani added: “This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options.”
However, industry mavens contested this view. “This (judgment) will ensure that the Patent Controller can without any fear or favour reject applications for a new patent in the case of drugs that have already been granted one for the basic version unless the new claim is superior in terms of efficacy,” said an industry expert.
He said this would make innovator companies wary while applying for new patents. “The MNC companies will now be extremely cautious and they will now ensure that it has adequate intellectual property rights before making a claim,” he added.
“Patent offices in India should consider this a clear signal that the law should be strictly applied, and frivolous patent applications should be rejected,” said Leena Menghaney, Medecins Sans Frontieres’ Access Campaign manager for India.
Novartis – the drug giant created in 1996 after the merger of Ciba-Geigy and Sadoz AG – reported sales of $ 32.2 billion from its pharmaceutical division in 2012. Glivec accounted for 14.5 per cent of its overall revenues from pharmaceuticals and pushed Diovan, its high blood pressure drug that recently went off patent in the EU and the US, into second place.
Novartis’ patent on the active ingredient in Glivec will expire in 2015 in the US, 2016 in the major EU countries and in 2014 in Japan including the extensions. “However, the product is protected by additional patents claiming innovative features of Glivec,” Novartis said in a recent filing with the US market regulator SEC.
The Swiss giant was looking for similar protection when it filed its application for the beta crystalline form of Imatinib Mesylate in the Chennai patent office on July 17, 1998 – at a time Indian patent law did not recognise product patents.
India was at that point overhauling its patent regime in line with its commitments to the World Trade Organisation (WTO) and the process wasn’t completed until January 1, 2005. As a result, the Glivec patent application was shoved into a “mailbox” till the patent regime was recast.
On March 27, 2002, Novartis filed for an exclusive marketing right (usually granted for a period of five years) for the product under section 24A of the old Patent Act, which has since been deleted. The application was granted by the patent office on November 10, 2003.
But soon after, the Novartis patent application was taken out of the mailbox. But before it could take up the patent for consideration, Indian drug makers filed five pre-grant oppositions. The assistant controller of patents and designs heard the parties on December 15, 2005. He rejected the patent application on January 25, 2006.
Novartis had approached the apex court in 2009 against the order of Chennai-based Intellectual Property Appellate Board, which had upheld the rejection of the Glivec patent.
In many other countries, patents are given to innovators if they make changes to an existing drug. In India, however, the practice has been opposed by health activists and domestic pharmaceutical companies who point out that patents should not be granted in such cases as it amounts to “ever-greening” the protection for a drug.
Ever-greening is a strategy that innovators adopt to perpetuate patent rights over products with just minor changes.
D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, said the decision of the Supreme Court meant that Cipla, Ranbaxy and Natco would be able to market Imatinib at a fraction of the cost of the Novartis product. While a month’s treatment of Glivec is put at around Rs 1.20 lakh, the generic version is available at a price of Rs 8,000.
“This is a landmark judgment that will serve to set at rest the controversy that was raised regarding the scope of Section 3(d) in the Patents Act, which is a crucial safeguard against the extension of patent monopolies of known drugs”, Shah added.
He said the ruling had restored the balance between the interest of innovator and that of the consumer.