The Indian Supreme Court has recently rejected an application by Novartis, a Swiss pharmaceutical company, to patent a drug used to treat cancer. This ruling received widespread approval from aid agencies worldwide.

The case
The drug involved in this patent dispute is Glivec. In 2006, Novartis attempted to apply for a patent for an updated version of Glivec, claiming that it was easier to be absorbed by the body. This application was rejected by India’s patent authority, as they believe that the changes made to Glivec were only minor, and was an attempt by Novartis to obtain a fresh patent to protect its monopoly to produce the drug, a practice known as “evergreening”. Should the patent be granted to Norvartis, it would ensure that it can extract maximum profits from its sale as there would not be any competitors to undercut its prices. In India, evergreening is prohibited by its patent laws.

Protest against Novartis . Source: http://timesofindia.indiatimes.com
Protest against Novartis . Source: http://timesofindia.indiatimes.com

Novartis immediately challenged the ruling and lodged a case at the Madras High Court. The Madras High Court rejected the case but Novartis appealed against the court ruling, thus bringing the case to the Indian Supreme Court, where the court again ruled against Novartis, denying the firm the patent for Glivec.[1]

Implications
At the heart of this dispute is the accessibility and affordability of patented drugs for patients in the developing world. By patenting the drugs needed by millions of poor patients, pharmaceutical companies are able to maintain a monopoly over the production and distribution of these drugs for 20 years, thereby raising the prices of these drugs. This would prevent poor patients in the developing world from using these drugs for their medical treatment due to the excessive costs involved.

In India, a month’s course of Glivec costs US$ 2,600, putting it out on reach for many ordinary Indians. Generic drug manufacturers are able to provide identical copies of the drug at less than one-tenth of the price of the branded Glivec, but this would not be possible if a patent is granted to an exclusive pharmaceutical company for the drug.

Such generic medicines are a boon for the patients and doctors in poor, developing countries as it provides cheap, life-saving medicines for the masses. The pharmaceuticals industry in India, the third largest in the world by volume, is worth US$28 billion. It supplies a fifth of the world’s demand for generic medicines, and 70% of generic medicines given to poor countries through aid organisations. Mr. Anand Grover, a lawyer for the Cancer Patients Aid Association, said that “Poor patients everywhere from Africa to Latin America will benefit once access to generic drugs increases”.

However, pharmaceutical companies argue that the reason why generic drug companies are able to provide copies of medicines at such low prices is because they do not have to bear the research and developmental costs of inventing and producing the drugs. The process includes aspects like discovery and clinical trials, and it can cost between US$100 million to US$800 million.[2] Therefore, pharmaceutical giants have to obtain a patent to protect their drug inventions to ensure they can recoup their costs incurred in developing the drugs for medical use.

Conclusion
The verdict of the Novartis trial in India is a victory for generic drug manufacturers in India and the developing world, as well as the millions of patients who need cheap access to these otherwise expensive drugs to treat their illnesses.

However, there are concerns that the denial of patents to protect the inventors of medicines could curb the discovery of new drugs. Without patents to protect the drugs from copycat manufacturers, the inventors of the medicines would not be able to receive any rewards for their money put in to develop the drugs. In the absence of such incentives, new discoveries and innovations in drugs will slow down, if not stop completely, which would complicate medical treatments. Already, in response to the results of the trial, the head of Novartis India, Ranjit Shahani, has said that the “company would not invest drugs research and development in India in the future”.[3]

Thinking questions
  1. Is it justified for drug companies to charge high prices for patented drugs that are needed by the poor for medical treatments? Why?
  2. What are some other models or methods that can be used to protect the interests of drug developers and the millions of patients in the developing world who need cheap access to drugs?


[1] Novartis: India rejects patent plea for cancer drug Glivec,
http://www.bbc.co.uk/news/business-21991179
[2] Landmark ruling will send ripples across the drug industry
http://www.straitstimes.com/the-big-story/asia-report/opinion/story/landmark-ruling-will-send-ripples-across-the-drug-industry-2
[3] Novartis boss: Drugs investment 'will cease in India'
http://www.bbc.co.uk/news/business-22062850