JUDGEMENT ON NOVARTIS - A BOON OR CURSE ( JUSTINPRINT) MAY 1-15,2013

The landmark judgment by the Supreme Court of India on 1 April,2013 was a major blow for the Swiss pharma giant Novartis. The court rejected its plea for a patent on a blood cancer drug Glivec, and the judgment will pave the way for Indian firms to provide affordable drugs to lakhs of cancer patients in the country.

The Supreme Court's decision has came up as great shock to pharma MNC companies. This decision taken by the Supreme Court will give a boost to the Indian pharma lobby. It's a great decision taken by the SC and will definitely result in a positive effect on the country's health care sector. The fight is not between Novartis and the SC but between people of the country and the people of the third world nation and the monopoly of the entire pharma MNCs. lobby.

The All India Drug Action Network (AIDAN) also welcomed the judgment of the Supreme Court. Dr. Gopal Dabade, co-convener of AIDAN, told, “I am very thrilled with the judgment. In fact, I was waiting for such a decision for a long time. Not only India but all the developing countries in the world will be benefited with this decision. He further said that, “The MNCs have started disinvestment from 2000 onwards as they are demanding equal drug price globally, so this decision will not effect everyone.”

R&D in India will also not get affected as the research starts at public institutions, and the pharma companies just formulate it into a medicine and market it. Imatinib mesalyte (Glivec), the drug in question, is a very important medicine to treat a type of blood cancer. A patient suffering with this type of blood cancer needs to take this medicine life-long. As this medicine is very essential, it is critical to make it affordable for patients. But Novartis wanted to have an absolute monopoly of the drug so that it can dictate its price. But the patent application was rejected by the SC on the grounds that it was not an innovation.

Apart from this, Novartis also challenged the provisions like Section 3(d) of the Indian Patent Act. This act was designed to safeguard the laws and also to prevent companies from abusing the patent system. Section 3(d) of the Indian Patent Act, prevents companies from gaining patents on modifications to existing drugs, in order to gain indefinite, interminable monopolies, reported Doctors without Borders.

India is still a developing country, and there is large population in the country who are in need of such intervention and medication. A major battle has been won in this context following the Novartis verdict. But now the danger is from the multinational drug companies, as they will try to push in fresh agendas through other strategies. Like the one they are currently trying - by means of bilateral trade agreement. Eternal vigilance seems to be the only solution in this battle to save millions of lives.

Before India was compelled to comply with the Trade-Related (Aspects of) Intellectual Property Rights (TRIPs) by January 1, 2005, the so-called pro-market economists, while trying to calm our frayed minds, wrote little about the situation in the US, the epitome of capitalism. They didn’t let us know that the Americans were gasping under skyrocketing healthcare costs, attributed to the rising prices of prescription drugs. There was debate all over the US on the legality of drug re-importation from Canada. The news on the high costs of HIV/AIDS drugs in countries of sub-Saharan Africa, with HIV infected people constituting more than 25 per cent of the adult populations, where people were — and are — dying despite the medicines available for the disease’s treatment, was being played down. Pro-market Indian economists were; instead, trying hard so that the pharmaceutical and biotechnology companies, guilty of monopolizing life-saving drugs, don’t appear like villains.

Non-governmental organization Oxfam, in late 2002, had staged a protest outside of the WTO headquarters in Geneva in which an African woman with pneumonia, who was taking a generic medicine intravenously, had her ’generic lifeline’ cut by trade delegates representing industrialized countries and drug companies. Why were incidents like this, howsoever melodramatic, reported only through snippets in India?

Because pro-market economists were then — after the Madras High Court rejected Novartis AG’s plea to declare Section 3 (d) of the Indian Patents Act as incompatible with TRIPs, they have tempered down their rhetoric — as starry-eyed about anything American just like Marxist economists are still romantic about anything Soviet. Full explanations of the implications of the US law on patents would have at least made Indians desist from the delusions of a balanced regime post-2004. The law grants the patent owner "the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States" for a period of 20 years beginning from the filing date of the patent application.

This means time-bound monopoly on the patented invention. The inventor can collect monopoly rents on sales of his product until the patent expires. And this inefficiency is justified with the law’s logical converse: The inventor says, "If you don’t protect my invention, I will simply not invent."

Agreed, bringing certain medicines to the market may need a massive capital investment, especially for R&D. A lot of money that is spent can’t be ’seen’: To know that a new drug works and is safe on patients — human beings can’t be treated like guinea pigs — they must be subjected to extensive laboratory tests and costly clinical trials. Further, whenever an experiment fails, all the money that went into it is, in a way, wasted. Given this scenario, a businessman can’t be expected to invest in a project like this without being assured of a Government-granted cushion of, at least, a limited monopoly. But then, such scientists-turned-entrepreneurs must stop the pretension of serving science and humankind.

Of course, the 1970 Indian Patent Act cannot be supported absolutely either. It simply prohibited the granting of patents on pharmaceutical products. In a country where academic education is still about cramming and passing exams, this law further guaranteed intellectual lethargy. Between 1970 and 2004, some 16,000 copycats sprouted all over the country to develop generic versions of medicines that were painstakingly invented abroad. They reverse-engineered — that is, determined how the drug compounds were made by foreigners — and rehashed the ingredients for mass production. Since that entailed minimal R&D, the Indian versions became, obviously, dirt-cheap.

But eventually the Uruguay round of the General Agreement on Tariffs and Trade (GATT) giving way to the World Trade Organization (WTO), and India’s membership thereof, played spoilsport. India and other developing countries were served the deadline of January 1, 2005, to adopt an intellectual property regime that mimicked the corresponding system of much of the developed world, including, most important of all, the 20-year patent rights on pharmaceutical products.

The other half-truth capitalists forwarded was that the prices of some drugs would fall as much as those of others would rise. We know now that only the second happened. Let alone ’rich man’s diseases’, the laidback Indian industry did not even try to cure malaria and tuberculosis, which affect mostly the poor in large numbers, with any new medicine.

The allaying of fears of drug prices shooting up was faulty to start with. First, product patents mean that generic companies are no longer able to market a drug simply by developing a new manufacturing method. Naturally then, there is no competitive pressure on a drug until its patent expires. Without competing brands, therefore, the drug prices can only increase.

And what was the fault in the argument that the drugs whose prices would drop would shockproof those that shot up? Well, India could not be forced to amend the Patent Act with retrospective effect. Therefore, drugs those were already patented elsewhere and were being produced generically before the Amendment of the 1970 Act, remains unprotected by patent in India. Medicine for pneumonia was one such case. But the population of pneumonic patients is minuscule as compared to that of malaria and tuberculosis patients. This statistic underscores the blunt truth that the capitalist economists were manipulating laymen’s minds.

Further, the West already had decades of experience of playing in the patents market. They have the clout to remain the masters of the market, and thus dictate drug prices at will.

That does not mean that January 1, 2005 was a quantum jump into an unknown regime for India. Though Articles 27-34 of the WTO Agreement made compliance to TRIPs mandatory for us as a signatory country, before allowing product patents, we had an Act permitting exclusive marketing rights for new products between 2000 and 2005. That statute, despite making India comply with Articles 70.8 and 70.9 of TRIPs, did not prevent the marketing of generic copies under different names. The Government also put in place a ’mailbox provision’ for the filing of product patent applications during the transitional period of 1995-2005; such applications could be filed during this time, but patents was not being granted on these inventions until 2005. This means that the Indian firms in slumber, too lazy to innovate, were not jolted out of their sleep into a new world suddenly on January 1, 2005 morning. They knew they had this coming for 10 long years.

Finally, it is the plight of patients that must count. It may have become unfashionable to dispute the ’legitimate right’ of the market to dictate our lives after the ’Chicago school of economics’, as it has come to be known, gained popularity about two decades ago. But for once we must put our foot down. The desire of a human being to live is not consumerism. It’s a stronger argument than the market’s ’legitimacy’, of which the drug monopolists themselves refuse to be a part.

This is one field where Government intervention is a must — not to pamper lazy Indian pharmacists, but to save poor Indians from dying without treatment. When India had passed the Patent Act in 1970, it also instituted a Drug Price Control Order (DPCO). Then having observed the unfairness of controlling the prices of all drugs, it started deregulation. Yet, the prices of about 75 essential allopathic compounds remained under Government control. This regulation must be extended to new drugs that are patented and approved for sale after 2005.

Not only will this prevent unscrupulous companies from cashing in on a dying person’s desire to live, it will also serve a notice to the lazy Indian biotechnology industry. To allay the fears of innovative foreign companies, the Government must, at the same time, assure them that the drugs whose prices are regulated for the developing countries will not be allowed to sneak into Europe and the US to be sold with huge profit margins.

And yes, this policy must apply only to emergency situations, covering fatal diseases like cancer and AIDS.

Many organizations in India strongly support the Supreme Court decision to uphold access to essential medicines and deny patent protection to dummy innovations as claimed by Novartis. Novartis had sought a patent for Imatinib (brand name Gleevac or Glivac) which noted lawyer and UN Human Rights Commissioner Anand Grover said was the same molecule with little 'tweaking'.

The cost of this drug is INR 120,000 per month for blood cancer (leukemia) patients. After Supreme Court ruling, the price of the drug may fall steeply from INR 120,000 to perhaps INR 8000 – this is a huge step forward in terms of advancing access to essential medicines and also in protecting public health from interference from profit-driven corporations and markets.

According to MD Ranjit Shahani of Novartis, “The decision taken by the Supreme Court of India will discourage innovative drug discovery. We give 95% of Glivec free to patients prescribed for CML (chronic myeloid leukemia) in India and the balance 5% are on a generous co-pay programme. The greatest loss here is to patients who suffer from life-threatening illnesses and are in need of new treatment options. India can have a much more powerful future if only we foster an environment that encourages innovation. Patents are the lifeblood of innovation and medical science will not progress if we destroy that. Patents, in fact, are the lifeline of generics. Without innovation there will be no new medicines, and without new medicines there will be no new generics.”

Further he added, “This ruling is a setback for patients and will hinder medical progress for diseases without effective treatment options. We should be more worried about what impact this will have on patient well-being and the ability to address the challenge of unmet medical needs. Meanwhile, all R&D investments in any case have moved to China with seven global companies having invested billions of dollars after the patent law was promulgated in India. These are Novartis, Roche, Sanofi, Pfizer, GSK, Astra Zeneca and Eli Lilly. Not a single investment came to India - that speaks loudly about the innovation ecosystem we have here.”

According to a news network the Pharma giant hails the supreme court judgement in the US.The pharma lobby railed against the decision but the overwhelming sentiment, from physicians to politicians, from academia to media, particularly in a country groaning from the high cost of health care, was that the Indian judiciary did good by workaday people -- not just by the poor in the developing world but also those struggling in the developed world.

Sometimes the behavior of large multinationals seems to be similar to organized crime gangs. They are willing to go to any extent to extract maximum benefits. I was watching TV news and one group from abroad was telling the news channel that Indian Supreme Court didn't understand meaning of innovation and patents. Such fools should be told that we understand innovation and patents but we fail to understand the profiteering that companies like Novartis are engaging in. Spending a few million dollars on drugs (that too, many drugs are simply minor modifications of old medicines) and then extracting billions of dollars in profits from poor patients is the trademark of these companies. Supreme Court of India must be praised for taking a clear stand on this case.

Many more players may enter the Indian market. There may be additional executive pressure to segment among the big drug manufacturing companies. Therefore, production may not be able to keep up proportionately with internal demands. Neither the prices may remain stable.

The fact is that India is first of all not China where the MNC patents are more or less protected. India’s SC cannot so overtly deny a patent to a MNC no matter how urgent internal situation be. The fact is that it is possible if and only if all get benefited. Otherwise, the White House and 10 Downing Street may put executive pressure on 7 Race Course. But they don’t do because theirs and other Western population also get benefited. The price is lower for all consumers. The particular company Novartis may suffer some losses but not all drug manufacturing MNCs.

The fact is that if the law be applied consistently the SC verdict is not a wrong decision as it lets the big becoming bigger. Surely in rarest of examples the SC verdict does not make small any smaller. The middle classes and poor may get some reprieve but if Indian laws are understood then the enhanced quality of treatment would require more money. On the flip side the verdict may result in more production of fake drugs all around the world but particularly in India. The rich would get world class treatment, poor not much and the middle class may come somewhere in between. This is the story of all of the Rest—class divisions would grow with time. The value of moolah would increase.

It is a lesson for every company which wants to indulge in ever-greening of patents. No doubt the credit has to be given to the company which has strived hard in research and development and produced answers to some of the dreadful diseases. However, the companies should also understand that it is wrong to continue to have the patent rights forever. And should not claim rights for small changes .

Ever-greening of patents is a complex issue where one can talk for or against the motion hours together. Finally, it is up to the law to decide. It is wrong to say that companies would not come forward to do research in India just because a case or two. I think the companies are smart enough to identify the rightful way to conduct research and churn money out of it.

Apart from all, things like Education and Health Care etc. should not go purely in commercial terms. It should have the charity spirit. Governments and organizations like W.H.O. should have lead in all aspects of welfare subjects like Education and Health Care etc ; unlike the Commercial organizations. Novartis like companies cannot be allowed to justify the huge gap between price for its Imatinib mesalyte (Glivec) and the generic drugs produce by Indian pharma in the name of funding research and extending charity in its style. The said judgment of Supreme Court of India may be viewed as statesman like act, as the governments and its heads supposed do for its poor citizens. In the contrary the governments being roped in by the provisions of World Trade Organization and imposed Intellectual Property Rights laws etc. are acting as facilitator for such greedy commercial corporations, who are marching ahead towards their goal to put the whole world under Economic Imperialism in the name of DEVELOPEMENT.

Siddhartha Shankar mishra,

Sambalpur , Odisha