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Rajeev Dhavan on April 11, 2013 – 1

 

The Novartis judgment has started a huge war of words. The patent drug producers are livid. They declare: “Woe is us. This is the end of invention.”  The generic drug makers say: “Well done Supreme Court.  Now we can supply life saving drugs to India and the world at cheaper prices.”

First let us understand the judgment for what it is. The drug in question is which is used by cancer patients. The foundation for it is Imatinib Mesylate (IM) free base which was an important discovery and undoubtedly a new invention attributed to Dr. Zimmerman. IM was converted into a salt in the crystalline form known as IM Alfa which was then improved into the IM Beta crystalline form. This Beta form was claimed to be an invention because it had better flow properties, thermo stability and lower hygroscopicity – in other words it was more stable and digestible.

Was the Beta form an invention? This was not just a technical question for the chemist. It had mighty implications in terms of ground realities in two significant ways. The life of the original Zimmerman patent would be extended by 20 years. If another “improvement” was accepted as a patentable invention, it would be extended for another 20 years. In patent law and practice, this phenomenon is known as “evergreening.” The second ground reality was that a patent is a “monopoly.” There are two kinds of patent monopolies: a process patent which protects how the patent is made; and a product patent which protects the product itself. A process patent is a low level protection. If a drug has a process patent, this means that anyone can make that drug by some other process. This was ’s solution in the original Patent Act, 1970. But a product patent is a master monopoly which, with “evergreening”, means that only that corporates or their licensees can make that product to the exclusion of all others.  This also means that the owner of the product can impose any price it wants. Ofcourse, countries can impose a compulsory license if there is scarcity, but that option comes with too many restrictions. This was the Euro-American solution devised by the TRIPS (Trade Related Intellectual Property Rights) treaty in the new WTO (World Trade Organization).

The took the view that Gleevec did not have novelty – in that IM was in the public domain of knowledge in a Cancer Research article and other publications. Nor could it be said that there was an inventive step because a person skilled in the task with what was known would be able to discover the IM in the crystalline form with the properties claimed for Gleevec. The narrow decision in the case concerns whether the product Gleevec could be given a product patent for the improvements. The answer was unequivocal. could not get a product patent but was entitled to a process patent to protect how it was made. Effectively, the ‘evergreening’ of Gleevec was stopped.

But, the court went further beyond the confines of the Euro-American patent law model which India accepted when it capitulated to accept TRIPS in the WTO negotiations. How TRIPS ordained patent monopolies as free trade is baffling. But, there was a loophole. TRIPS left it to the each country to “determine the appropriate method of implementing the provisions of this agreement within their own legal system and practice”. (Article 1). TRIPS also envisaged each country to innovate in a manner conducive to social and economic welfare and to balance of rights and obligations (Article 7) and “adopt measures to protect public health and promote social economic development”. (Article 8). A worried Indian Parliament decided that patents would have to meet one further test of patentability. In the area of medicine and chemicals, it was indicated that any change must be significantly efficacious. (Section 3(d) Indian Patent Act). The significance of the Novartis judgment lies in its interpretation of this section. It posed a more stringent test beyond novelty and inventiveness by requiring significant improvement in efficacy. It was not enough that the drug was more stable and easier to administer and absorb. A significant step requires a therapeutic efficacy which is curative. If this interpretation had not been forthcoming, every little change would have fortified an “evergreening”.

The argument that research will suffer is simply wrong. Scientists rely on the past research of others. There are actually few ‘eureka’ moments in technical research. But patent holding companies want to increase these ‘’eureka’ moments, exacting a heavy price for their products. Research shows that the wide spectrum research cost is recovered in less than five years. There is an invisible government subsidy because research costs are tax deductible. Innovation will continue. In fact, the competition for innovation will become more intense as “patent” companies do not seek evregreening monopolies for small changes but only significant curative ones. Meanwhile competitive sales between companies will make medicine more affordable.

India’s parliament has shown the way by adding the criteria of significant change of curative dimensions. The Supreme Court has interpreted this addition valiantly and creatively. The world was waiting for decision like this. With evergreening de-monopolized, Cipla and others can now provide life saving drugs to Indians and others all over the world at much lower prices.

 

Rajeev Dhavan is a Senior Advocate of the Supreme Court.

 

 

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