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Novartis’s yearly investment on R&D is 0.02% of its turnover. Its total sales in India were `844.29 crore as on 31 March 2012. Photo: Priyanka Parashar/Mint (Priyanka Parashar/Mint)
Novartis’s yearly investment on R&D is 0.02% of its turnover. Its total sales in India were `844.29 crore as on 31 March 2012. Photo: Priyanka Parashar/Mint

(Priyanka Parashar/Mint)

Novartis won’t invest on R&D in India

Novartis says the Supreme Court ruling on Glivec will discourage drug innovations in the country

New Delhi: Swiss drug maker Novartis AG on Monday said it will not invest on research and development (R&D) in India following the Supreme Court’s decision to deny a patent for its anti-cancer drug Glivec, and that the development will discourage drug innovations in the country.

Novartis’s yearly investment on R&D is 0.02% of its turnover. Its total sales in India were 844.29 crore as on 31 March 2012. Details of other investments were not available.

“Novartis has never been granted an original patent for Glivec in India. We strongly believe that original innovation should be recognized in patents to encourage investment in medical innovation, especially for unmet medical needs," Ranjit Shahani, vice-chairman and managing director, Novartis India Ltd, said at a press briefing after the ruling.

“We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs," Shahani said. “This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."

Some analysts, though, say it is unfair to interpret the judgement as India not respecting patents.

“It is not a fair to interpret the denial of patent as a basis for us to believe that India does not believe in innovation," said Muralidharan Nair, partner in the healthcare division of consultancy firm Ernst and Young. “Such litigations are decided on case-to-case basis."

Multinational pharma companies, including GlaxoSmithkline Plc, Roche Holding AG and Pfizer Inc., have several ongoing patent litigations in India.

Arguing the case for Novartis, advocate Gopal Subramanium stated that the company was fighting for a principle and not for profits: “The purpose is not to make money from the poor. This is not the purpose, but am I not entitled for a patent for our drug? We are fighting the case on principle," he said.

According to a recent study by the US Food and Drug Administration—quoted by advocate Anand Grover in his arguments against giving a patent for Glivec—nearly 76% of the patented drugs in Western countries were mere new versions of older drugs with minor modifications.

Grover also said foreign pharma companies hadn’t invested on R&D in India for over a decade.

“Since 2000, all multinational pharmaceutical companies started disinvesting in India. Most companies no longer produce in India, they import drugs. So this rationale of not investing on R&D in India does not hold. This judgement will have no impact of drug discovery or innovation in India," he said after the court announced its verdict. “Further, it is a myth propagated by the companies that the verdict will ensure newer drugs do not come to India."

Aid organization Médecins Sans Frontières (MSF), which procures generic versions of drugs for its patients, said a majority of the medicines it uses faced patent threats.

“It must be kept in mind that India does grant patent in cases of genuine innovation. When new drugs are introduced, we pay for those," said Leena Menghaney, Access Campaigner and lawyer with MSF. “Last year, for the first time, we used patented drugs in our Mumbai clinic for HIV treatment and paid nearly $2,000 for it. How we will afford new drugs is an issue that remains unresolved."

Under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement formulated by the World Trade Organization, innovator companies are granted patent monopoly for 20 years, after which generic companies are allowed to make cheaper copies of the original drug without paying the innovator.

“We are now beginning to feel the impact of TRIPS agreement on access to medicines. We will have to consistently challenge patents to ensure drugs can be generically produced," Menghaney said.

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