In his article, ‘Patents help all in the long run’, Mint, 10 May, is Novartis chairman Daniel Vasella speaking for the entire Indian pharmaceutical industry when he says Indian patent laws discriminate against the innovation-focused industry? Facts go against this claim. The article is at best a complaint against the Indian Patent Act and, by implication, the Indian government. Vasella has given no reason for calling it “discriminatory”, except that the Glivec application was rejected.
What exactly is ‘discriminatory’ in our patents law? According to Novartis, it is the fact that it did not allow “minor modifications” to be patented through which a company could obtain monopoly, remove all competitors and charge high prices.
Let’s look at the facts. Novartis’ application for a patent for blood-cancer drug Glivec was rejected on grounds of absence of ‘newness’ and ‘non-obviousness’. Novartis developed Ematinib Mesylate (Glivec) and patented it in the US and Europe a few years before the TRIPS cut-off date of 1 January 1995. In 1998, it modified it from ordinary powder into its beta crystalline form, and obtained a new patent in Australia. After this, Novartis applied for a patent in India, not on the strength of the earlier pre-1995 patent (TRIPS doesn’t allow that), but on the basis of the 1998 patent, which was supposed to be an improved version. The patents controller rejected the application as it felt the 1998 form had no “novelty and non-obviousness” or “a significant therapeutic advance” over the original pre-1995 drug. Rejection of the patent application means Indian competitor companies (Ranbaxy, Sun Pharma, Natco, etc.) can continue producing this drug. Novartis’ price is 10 times the price charged by its competitors. If Novartis had got the patent, all other companies would have had to stop production, resulting in just one company, Novartis, selling Glivec—at 10 times the price.
The author claims Novartis is giving away Glivec to poor Indian cancer patients free of cost. That is really good. The only snag is the company is probably doing it for publicity reasons as we have not heard of other drugs given by them free of cost to poor people.
As regards the “mistake” of the Indian Patents Controller to disregard “innovation-driven companies such as Novartis”, suffice it to say that for multinational companies (MNCs), R&D is incidental, rather aimed at retaining a hold on the market. If they were so concerned about R&D and the poor, why do they continue to charge exorbitant prices for their products? Incidentally, product patent has always been allowed in India in all sectors except pharmaceuticals, even during the pre-TRIPS era. Why did no MNC think of conducting R&D in India in those fields? The case relating to HIV drugs and the high prices charged by MNCs the world over is well known. Thus, Thailand, and now Brazil, decided to issue compulsory licences to Indian companies to produce those drugs at much lower prices.
Originally, the appeal for Glivec was filed in the Chennai high court, which later transferred a portion of the case to the new Patents Appellate Board, whose decision will come in time. An additional plea in the petition before the high court argued that Section 3 (d) of the Indian Patents Act 1940 (as amended in 2005) was not compatible with the TRIPS agreement. As the courts are required only to interpret a law duly passed by Parliament, it is doubtful they have the jurisdiction to interpret the compatibility of a law (passed in Parliament) with an international pact. If TRIPS is violated, the remedy is that a government (not a company) may approach the World Trade Organization’s dispute settlement board. According to what we know, the Swiss government does not want to be involved.
The latest judgement of the US Supreme Court also confirms our position. (The Economist, 5 May 2007): “Ruling on KSR International vs Teleflex, a patent dispute centred on the addition of electronic sensors to car-accelerator pedals, the court said that the combination of two existing technologies was not sufficiently ‘non-obvious’ to deserve a patent. ‘Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress,’ wrote Justice Anthony Kennedy for the court. To obtain a patent’s 20-year exclusivity, an invention should be novel, useful and non-obvious—but the third requirement has not been rigorously applied in recent years by the patent office and the courts. Now examiners and the courts have more discretion to use ‘common sense’.” This ruling is significant for the debate on patentability.
The question is whether patentability criteria should be broad so as to allow patenting of “any” improvement, or more balanced to allow only genuine research. Novartis wants a broader definition. Is it mandated by TRIPS? No. TRIPS, in fact, allows countries to define their patentability criteria according to their requirements, and their technological and economic status. Developing countries are allowed to have a ‘higher bar’, else undeserving applications would get through resulting in high prices of medicines and misery to the poor.
Gajanan Wakankar is executive director, Indian Drug Manufacturers’ Association (IDMA). Comment at firstname.lastname@example.org