India's Supreme Court will hear final arguments starting this week in a case that could have life-or-death implications for millions of people with critical illnesses such as AIDS and cancer, not just in this country but across the developing world.
The case pits the government of India against the Swiss pharmaceutical company Novartis and it hinges on one clause in an arcane patent law. The Indian and international business worlds are watching it closely: They will see the verdict as a signal of how intellectual property law will be handled in this booming economy.
In essence, the issue before the court is this: Novartis wants to patent a formulation of a leukemia drug called imatinib mesylate, which it markets as Gleevec in North America and Glivec in the rest of the world. In 2006, the Indian Patent Office denied that patent, saying that it was not a new medicine but a salt formulation of a known drug. Novartis took that decision to court, and has lost twice on appeal; judges said the company had not shown the drug would have greater "efficacy" than the already-patented molecule, as required by the patent law. Novartis says that efficacy clause is discriminatory. This is the last showdown in a long battle.
At stake is India's $26-billion (U.S.) generic drug industry, which supplies not only most all of the medicines used domestically but also acts as "the world's pharmacy" and helped to fuel major gains in public health around the developing world over the last 15 years. Countries such as Zambia are able to treat hundreds of thousands of people with HIV in their public sector health programs because they buy generic Indian anti-retrovirals that cost $120 per patient per year, rather than the brand name versions that cost $12,000 per patient per year.
"If the Supreme Court broadens the way 'efficacy' is interpreted, it will open a flood of patents," said Leena Menghaney, a lawyer with the Access to Essential Medicines Campaign of Médecins Sans Frontières (Doctors Without Borders), which uses Indian-made generic drugs to treat 136,000 people with AIDS around the world. "It's not just a cancer drug. Everyone else will be stuck with that decision."
Other companies that have filed similar applications will likely also get patents if Novartis succeeds in getting a patent on this drug, she said, and many medicines that are now produced cheaply here will move out of the price range of people in India and in developing countries around the world who need them.
Drug companies say India's law is unfair, and robs them of the ability to recoup the investment they have made to research and develop these drugs. "Novartis is seeking clarity on whether we can rely on patents in India and whether we as a research-based organization can continue to invest in the development of better medicines for India," said Ranjit Shahani, who heads the India operations of Novartis. "Patents are the primary incentive supporting development of new medicines and without them investment in R&D will plummet."
In this, Novartis has the backing of the rest of the international pharmaceutical business – Mr. Shahani also heads the Organization of Pharmaceutical Producers of India, the lobby for the brand-name drug industry – which is eyeing populous India as an important potential market at a time when business is slowing in the West as drugs invented in the early 1990s start to come off patent.
Lobby groups for other sectors in Indian industry also argue that if the country's economy is to grow India must be seen as a country that respects intellectual property. The patent law has been the focus of intense pressure on India from the United States and the European Union in free trade negotiations. Even within the coalition governing India there is a pro-business faction, which includes several powerful cabinet ministers who make no secret of the fact they dislike the comparatively liberal law.
Yet because the case is mind-numbingly complex and it has only been possible to patent drugs in India for a few years – so only a few are sold at brand-name prices – the Indian public is barely paying attention, unaware of its potential impact, said Amit Sengupta, a co-ordinator with a health access organization called the People's Health Movement.
The ramifications of the case go far beyond Glivec. They reach into the tiny Delhi apartment of C. N. Patel, a 55-year-old oil driller who has been living with HIV since 1996. Five years ago, he collapsed on the job; tests found his immune system so shredded by the virus he was next to dead. He started on the most common course of anti-retroviral drugs, and recovered somewhat – but soon discovered his virus was resistant to those drugs and he needed a "second-line" combination of drugs.
Right now, he takes generics, which he gets free through the national AIDS program. But Abbott and BMS, which hold the patents on his drugs elsewhere, have already applied in India and are watching the Glivec decision. There's no way to tell what they might charge for Mr. Patel's drugs if they regain their monopoly, but other patented AIDS drugs are sold for $6,000 a year here, about what his family lives on.
"I can't pay," said Mr. Patel. "My pension is gone. My savings are gone. I can't get more loans. If they win this lawsuit, I'll just die."
India inherited its original patent law from the British and it barred the country from producing local versions of patented drugs such as malaria medications or the first antibiotics. Indira Gandhi, as prime minister, was incensed to learn India was paying higher prices for medicines than many Western countries. In 1972, at the height of the Green Revolution, she oversaw the adoption of a law that made it illegal to patent food or medications in India.
The country was then short of technology, but rich in skilled biochemists, who rallied to a Gandhian cry of self-reliance and began to "reverse engineer" Indian versions of many brand-name drugs. By the mid-1990s, the public sector research had led to a thriving private sector generic industry, making drugs for both internal consumption and export.
When India joined the World Trade Organization in 1995, though, it had to agree to start granting patents on medicines by 2005. Leftist parties then in the governing coalition, seeking to keep the law from being what they saw as excessively pro-business, included a clause saying a new form of a known substance cannot be patented unless it has shown enhanced "efficacy."
The language was unusual for patent law, and aimed at stopping "evergreening" the practice multinational pharmaceutical companies use to extend their patent terms beyond the usual 20 years by making minor changes in their existing medicines, filing for a new drug and thus keeping a monopoly.
Multinational drug companies complained about the language from the outset. Novartis tried and failed to have efficacy clause ruled unconstitutional Now its focus is persuading the Supreme Court that efficacy is being unfairly restricted to therapeutic effectiveness, and should include modifications that make drugs "bioavailable," or easier to absorb.
The situation with Glivec – which changed chronic myelogenous leukemia from a fatal to a manageable illness – is tricky. The original compound was developed in the United States,., mostly in publicly-funded laboratories, and patented there and elsewhere in the early 1990s by Novartis – well before India had patents. In 1997 Novartis applied to patent a salt form of the molecule, and increase the length of the patent by five years. It filed that patent here in 1998 – knowing that by 2005 India would have to start examining them. The company managed to have most of the generic makers shut down in 2004 – but when the patent was rejected in 2006, lifting the barrier to generics, it decided to go after the 'efficacy' section of the law as a whole.
Novartis says that the original compound, patented before the Indian law, was never made into a drug, and its new form, invented after 1995 (and thus covered by the law) actually makes it into something the body can absorb.
Currently, several Indian generics makers produce variations of Glivec, sold for about 10 per cent of the cost of the brand name, $2550. Novartissays that if Glivec comes back under patent it will make it available to patients who cannot pay through a charitable assistance program.
India has one other option for making drugs available – a compulsory licence. The WTO allows a country to override a patent if it is preventing access to a life-saving medication. Earlier this month, India issued its first-ever such licence, on a cancer drug that is patented by Bayer. The Patent Office said Bayer had failed to make the drug available here at a reasonable cost and licensed a generic firm to produce it, for a cost 97 per cent lower, while mandating that it pay Bayer a royalty.
This is the model that Doctors Without Borders would like to see used on a range of drugs. Ms. Menghaney noted that no one in India legally opposes patents on totally new drugs – a new AIDS therapy, for example, produced under patent by Merck, is being sold here for $2,000 and has not been challenged. But a royalty system would keep the Indian generic industry alive while ensuring the pharmaceutical companies recover their research costs, she said – although it would likely not generate the level of profit to which they are accustomed.
Novartis declined to tell the Globe and Mail how much it has earned from sales of Glivec globally but one figure has been reported as $4.7-billion last year alone.
Now all eyes are on the court, which will begin hearing arguments on Wednesday. India's Supreme Court has made a series of rulings considered "progressive" on social policy in the past few years, but has also issued a few strongly pro-business decisions of late. Novartis has hired many of the country's top lawyers for its large legal team; the Indian government has fielded a junior one.
Yusuf Hamied runs India's largest generic drug company, Cipla; his father was one of those early pioneering biochemists. He sees the case as a watershed for Indian development. "Every country has the right to determine its own laws," he said. "And India can't afford monopolies."