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Will now invest in India 'cautiously', says Novartis

Apr 01, 2013 03:28 PM IST Business Business

Mumbai: Pharmaceutical giant Novartis on Monday termed the Supreme Court's judgement of not granting a patent to its cancer drug Glivec as "disappointing" and warned that though it will continue to introduce new products in India, it will now invest "cautiously". In a landmark verdict, the apex court dismissed the Swiss company's plea, paving way for more affordable life saving cancer drugs.

The company said it hopes that the system for intellectual property in India improves. However, it added it will not invest in research and development in the country.

Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited said the company will take a legal recourse after it reads the Supreme Court judgement thoroughly. He expressed hope that the research and development will move to a favourable environment in India.

Earlier in the day, Novartis had said in its statement that the main concern of the company was with "India's growing non-recognition of intellectual property rights that sustain research and development for innovative medicines". It added that it strongly supports the contribution of generics to improving public health once drug patents expire.

Novartis had sought to overturn a clause in Indian Patents Law that restricts patent protection for newer forms of existing molecules, and the ruling could set a precedent for how other similar patent claims are treated.

Drug companies in India can now roll out a generic version of the drug, which can cost about Rs 10,000 a month - slashing the price by almost 92 per cent. India's domestic drugs market is the 14th largest globally, but with annual growth of 13-14 per cent and the world's second biggest population, it has massive potential at a time when traditional developed markets have slowed down.

Currently priced at Rs 1.2 lakh for a monthly dosage, Glivec is a major advance in treating chronic myeloid leukaemia, which kills 80-90 per cent of sufferers, and some gastrointestinal cancers. The ruling is a boost for healthcare activists who want the government to make medicines cheaper in a country where patented drugs constitute under 10 per cent of total drug sales.

The apex court stated that Glivec failed the test of innovation under Patent Act and that repetitive patent was not permissible. By contrast, the newer form of Glivec has been patented in nearly 40 countries including the United States, Russia and China. Novartis stock fell over 4 per cent after the verdict was announced late Monday morning.

"Novartis claimed that Glivec is more stable and more soluble but the Supreme Court said that is not a definition of a new novelty product and that is why it dismissed their plea. Novartis patented this product earlier in different countries, where product patent was available but it was not a patent available in here. So there is nothing they can do in that sense," said Prathibha Singh, a lawyer.

The verdict is a serious blow to Western pharmaceutical firms, which are increasingly focusing on India to drive sales. The patent case dates back to India's denial of a patent in 2006 on the grounds that it wasn't considered a new molecule, but an altered version of one that had been around for 15 years.

Novartis' claim was opposed by Indian pharma companies, which are manufacturing generic drugs, as well as by health aid activists in the apex court. They had claimed that the MNC is not entitled for patent and it is indulging in "ever-greening" of patent by simply changing the composition of the ingredients of the drug.

Ever-greening of patent right is a strategy allegedly adopted by the innovators having patent rights over products to renew them by bringing in some minor changes such as adding new mixtures or formulations. It is done when their patent is about to expire.

A patent on the new form would have given Novartis a 20-year monopoly on the drug. Earlier, the Comptroller General of Patent and Design had denied patent to Glivec on several grounds including its alleged failure to meet stipulations under sections 3(d) and 3(b) of the Indian Patent Law.

Section 3(d) restricts patents for already known drugs unless the new claims are superior in terms of efficacy while Section 3(b) bars patents for products that are against public interest and do not demonstrate enhanced efficacy over existing products. During the arguments earlier, Novartis had tried to dispel the impression that its drug would be beyond reach of poor cancer patients due to its high cost.

"The purpose is not to make money from the poor. This is not the purpose, but am I not entitled for patent for our drug? We are fighting the case on principle," senior advocate Gopal Subramanium, appearing for the company, had said. He had submitted that there should be no cause of concern that the poor would not get treatment and had claimed that 85 per cent of such patients are treated free under its scheme.

Novartis has previously that said it needs legal certainty if it is to plan further investment in drug research in India. Ranjit Shahani, vice chairman and managing director of Novartis India Ltd, the firm's Indian unit, had said cheap generics had an important role to play once drug patents expired, but the company was concerned about the non-recognition of patents that were ultimately needed to sustain drug research.

In 2012, India had revoked patents granted to Pfizer Inc's cancer drug Sutent, Roche Holding AG's hepatitis C drug Pegasys, and Merck & Co's asthma treatment aerosol suspension formulation. They were all revoked on grounds that included lack of innovation.

(With Additional Inputs From Reuters and PTI)