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Novartis loses patent battle in SC

Court denies Swiss drug firm patent protection for its anti-cancer drug Glivec; domestic industry hails verdict

BS Reporter  |  New Delhi 

The Supreme Court on Monday dismissed Novartis AG’s appeal for patent protection of its anti-cancer drug, Glivec, putting an end to a seven-year battle between the Swiss drug maker, several domestic generic manufacturers, as well as patient groups fighting for affordable medicines.

A Bench of judges Aftab Alam and Ranjana Desai said in a 110-page judgment: “We firmly reject Novartis’ case that Imatinib Mesylate is a new product and the outcome of an invention… We hold and find that Imatinib Mesylate is a known substance. Imatinib Mesylate does not qualify the test of ‘invention’ as laid down in Section 2(1)(j) and Section 2(1)(ja) of the Patents Act.”

While the verdict might make multinationals like Novartis more wary of the Indian market, it could boost prospects of domestic companies, such as Natco, Cipla and Ranbaxy, manufacturing generic versions of the medicine.

About 16,000 patients in India use Glivec, a vast majority of whom receive it for free, Novartis says. By contrast, according to industry reports, the generic Glivec is used by a little more than 300,000 patients.

In its annual report, Novartis India had said 95 per cent of patients prescribed Glivec were being treated for free. So, the immediate financial impact of the judgment on Novartis is unlikely to be significant. Shares of Novartis India, however, fell sharply on the Bombay Stock Exchange after the SC judgment. It touched a low of Rs 558.10 during the day. The stock closed at Rs 587.95, down 1.8 per cent from its previous close of Rs 598.80.

The domestic industry and patient groups, fighting the case against Novartis, welcomed the decision, as they believed the judgment would not only allow the drug to be available at a price far lower than Novartis’ Glivec but also set a legal precedent against patents on existing drugs sold in India.

According to a Natco spokesperson, its generic version of the drug is priced at Rs 9,600 for a month’s therapy, as against Rs 1,10,000 for Novartis’ Glivec.

Welcoming the verdict, Cipla Chairman Y K Hamied said: “India, being the pharmacy capital of the world, can continue to produce affordable, high-quality medicines without the threat of patents for minor modifications of known medicines. This judgment will not only benefit patients in India, but also around the world.”

At the heart of the dispute was the Indian government’s contention that Glivec, which treats myeloid leukaemia and some gastrointestinal cancers, is simply a retooled avatar of a pre-existing drug — Imatinib. However, Novartis argued Imatinib Mesylate was a new salt form of an older medicine, Imatinib, and the new version represented a 30 per cent increase in the bioavailability of the medicine.

Applying Section 3(d) of the Patents Act, the apex court ruled the Novartis version of the drug was not “an invention as understood in the law of patent in India” and, therefore, not entitled to get patent for the improved version of its cancer drug, Glivec.

The court clarified in this judgment that it did not apply to all improvements in products. It said it had not barred patent protection "for all incremental inventions of chemical and pharmaceutical substances." It would be a "grave mistake" to read this judgment to mean that it prohibited all fundamental changes in a product, the verdict said.

Novartis is, however, upset with the denial of the patent and said the verdict "discourages future innovation in India".

"We strongly believe that original innovation should be recognised in patents to encourage investment in medical innovation, especially for unmet medical needs," said Ranjit Shahani, vice-chairman & managing director, Novartis India Ltd. "This ruling is a setback for patients and will hinder medical progress for diseases without effective treatment options."

The case has an acrimonious history. Novartis had filed for a patent in 1998, which was denied in 2006. Then, in 2007, the Madras High Court also rejected Novartis' plea against the 2006 order. The company also lost the case at the Intellectual Property Appellate Board, which rejected the company's appeal in 2009. Novartis then decided to take the case to the country's highest court.

With this landmark judgment coming through in favour of generics, many are also concerned that it might shunt multinationals from making further investments and launching innovative medicines in the country.

However, in a press conference held in Mumbai, Novartis Shahani said the company would continue to file for patents in India. "Novartis India will continue to invest here, but with caution," he said.

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First Published: Tue, April 02 2013. 00:55 IST