The Novartis Decision by India’s Supreme Court: A Good Outcome for Public Health

The Indian Supreme Court made a landmark decision on the   Novartis patent claim for a cancer drug. This is an analysis of that decision by the South Centre’s Special Advisor on Trade and Intellectual Property.

By Carlos M. Correa

The denial by the Supreme Court of India, on April 1, 2013, of a patent filed by the Swiss pharmaceutical firm Novartis on a particular form of an anti-cancer drug (imatinib mesylate) attracted unprecedented attention from civil society organizations, academics and the press. The decision has been hailed as a victory for access to medicines.

There is nothing noticeable in the fact that a patent application has been rejected: this is a normal outcome of the examination conducted by patent offices, when it is found, as it is often the case, that the patentability requirements are not met (for instance, only 47% of the final decisions made by the European Patent Office led to the grant of a patent in 2011). This article explores some of the reasons that explain the international repercussions of the Novartis case.

A public health perspective

Intellectual property rights need to be implemented taking the context where they apply and their possible socio-economic implications into account. In the case of public health, as stated by the Doha Declaration on the TRIPS Agreement and Public Health ( adopted by the WTO Ministerial Conference in 2001) such rights should be interpreted and implemented in a manner supportive of the countries’ right to protect public health and, in particular, to promote access to medicines for all (paragraph 4).

Some judicial decisions in several developing countries (e.g. Argentina, Kenya) have embraced this approach in litigation concerning pharmaceutical patents and the protection of test data. In India, in a 2008 decision Justice Ravindra Bhat stated that ‘…India entered into the TRIPS regime, and amended her laws to fulfill her international obligations, yet…the Court cannot be unmindful of the right of the general public to access life saving drugs which are available and for which such access would be denied if the injunction were granted…’ (F. Hoffman-La Roche Ltd. and Anr. Vs. Cipla Limited, para 85).

In rejecting the referred to patent filed by Novartis, the Intellectual Property Appellate Board (IPAB) – which is competent to hear appeals from the decisions of the Indian patent office – explicitly considered the public health implications of the high price charged for the drug by Novartis in India. The Board held that ‘… the drug … in our view is too unaffordable to the poor cancer patients in India. Thus, we also observe that a grant of product patent on this application can create a havoc to the lives of poor people and their families affected with the cancer for which this drug is effective. This will have disastrous effect on the society as well. Considering all the circumstances of the appeals before us, we observe that the Appellant’s alleged invention won’t be worthy of a reward of any product patent…for its possible disastrous consequences on such grant as stated above, which also is being attracted by the provisions of section 3(b) of the Act which prohibits grant of patent on inventions, exploitation of which could create public disorder among other things’ (p. 190).

The Indian Supreme Court has confirmed in the same case that, in interpreting and applying the patent law, public health considerations are legitimate and are a component of the context within which a decision has to be made. The court noted, in relation to the TRIPS Agreement, the concern that ‘patent protection to pharmaceutical and agricultural chemical products might have the effect of putting life-saving medicines beyond the reach of a very large section of people’ (p. 38). It further noted that ‘India had learnt from experience the inverse relationship between product patents and the indigenous pharmaceutical industry, and its effects on the availability of essential drugs at affordable prices’ and that ‘the reintroduction of product patents in the Indian patent system through the TRIPS Agreement became a cause of alarm…’ (p. 43).

These decisions show how a public health perspective can be used, in particular cases, to interpret and apply intellectual property laws in relation to pharmaceutical products and processes. Incorporating such a perspective does not mean that the substantive standards of the patent law (such as the patentability requirements) are ignored. They are implemented not merely having in view the interests of the right holder, but with the aim of reaching a fair balance between patent protection and the commitment to protect and promote public health.

Importantly, the Indian Supreme court recognized, in the Novartis case, the role that the Indian pharmaceutical industry plays as a major supplier of affordable medicines, particularly anti-retrovirals, to developing countries. It affirmed that the public health considerations did not only relate to India but to ‘many other parts of the world’ particularly the developing countries and the least developed countries (para 66). As a result, the Court of India ’has significant positive global implications. It has effectively protected the leading role of India in supplying affordable medicines to other developing countries’.

Curbing ‘evergreening’ of patents

In 2005 the Indian Parliament approved an amendment to the Patents Act that, among other changes, introduced a new provision, section 3(d) deliberately aimed at curbing what has been termed as ‘evergreening’ of patents. This is a strategy followed by pharmaceutical companies to artificially extend patent rights over drugs that have fallen or are soon to fall in the public domain.

In the words of the Indian Supreme Court: “’Evergreening’ is a term used to label practices that have developed in certain jurisdictions wherein a trifling change is made to an existing product, and claimed as a new invention. The coverage/protection afforded by the alleged new invention is then used to extend the patentee’s exclusive rights over the product, preventing competition”. ‘Evergreening’ is harmful for generic producers, as patents are used to block the commercialization of lower priced generic drugs. Most importantly, however, that practice adversely affects patients and the institutions that need to pay a high price for drugs. For instance, the European Commission estimated, for a sample of 219 drugs, losses to individuals and governments of 3 billion Euros for the period 2000-2007, resulting from the strategic use of patents to block generic competition.

In order to prevent this misuse of the patent system, the referred to section 3(d) stipulated that in case of derivatives and other forms of existing drugs, patents would be granted only if a significant increase in efficacy could be shown. ‘Efficacy’ was understood by the Supreme Court as relating to the therapeutic effect of the claimed derivative or form. When such effect is absent, there is no patentable invention.

The Novartis patent application rejected by the Indian court provides an excellent example of an evergreening strategy. The basic patent on imatinib was initially filed in 1992 on the basis of what is known as a ‘Markush claim’. This is a way of drafting patent claims to cover a large number of compounds that are deemed to share some common characteristics. This modality of patenting, very much in use in the pharmaceutical sector, allows in some cases to protect millions of compounds under a single patent. This broad coverage blocks further research on and production of any of the covered compounds during the 20-year period of exclusivity that patents generally grant.

Novartis argued before the Indian Supreme Court that, after inventing imatinib the company developed a second invention, the particular salt (mesylate) of the drug. Obtaining a patent on a salt is another typical way of evergreening. It is common knowledge in the pharmaceutical field that salts result in different solubility and, therefore, different bioavailability. The possible salts acceptable for pharmaceutical use are also well known. Hence, a patent on the salt of a particular drug would not normally meet the inventive step standard required by patent laws. Moreover, in seeking for the broadest possible patent protection, when claiming for a drug, pharmaceutical companies generally claim – as comprised of in their invention – all the corresponding salts. This is, in fact, what the Supreme Court found in the Novartis case: the original patent already covered the mesylate salt of imatinib. This was, moreover, the form under which the drug was commercialized in India and elsewhere.

In fact, the Novartis patent application did not cover the anti-cancer drug active (imatinib) as such or its salt (imatinib mesylate) – which were in the public domain in India – but a crystalline form of the drug. The patenting of crystalline forms or ‘polymorphs’ is another strategy, very popular in the pharmaceutical industry, for evergreening patents on medicines. A person with basic knowledge in organic chemistry knows that several polymorphs (i.e. different arrangements of the molecules in the solid-state structure) may exist for a single chemical compound, and that some polymorphs are more stable and have better properties than others for manufacturing a particular drug. Hence, only under a relaxed inventive step standard a polymorph could be considered as inventive and patentable. Moreover, a polymorph is a property inherent to a compound which is found, not ‘invented’, in the process of crystallizing a given compound. Although the Indian Supreme Court rejected the patent on the Novartis polymorph on the argument that an increased therapeutic efficacy had not been proven, as required by section 3(d) of the Indian Patent Act, the same conclusion could have been reached by rigorously applying the inventive step standard. Argentina, for instance, adopted guidelines for the examination of pharmaceutical patents that considers polymorphs as generally non-patentable.

Shortcomings of the patent system

The Novartis case also provides an outstanding example of the problems created by the patent system for access to drugs, and of some of its shortcomings as an incentive for innovation.

Price is a key factor in access to drugs, particularly in developing countries where patients cover most of their expenditures on medicines out-of-the-pocket. Imatinib mesylate, sold in India under the trademark ‘Glivec’, is many times more expensive than its generic version. As noted in the IPAB decision in this case, Glivec is ‘too unaffordable to the poor cancer patients in India’ (p. 191). In accordance with one source, the generic version of imatinib mesylate is up to 90% cheaper than Glivec. The reported donation of Glivec by Novartis to ‘eligible patients’ under the ‘Glivec International Patient Assistance Program’ (GIPAP) may be a palliative, but does not ensure a sustainable supply of the product to those in need. A successful strategy of patent evergreening would mean, hence, to deprive many suffering people from access to the medicine.

The high cost of research and development is the ordinary justification for the pharmaceutical industry to obtain patents and to charge high prices for the protected medicines. In the case of the imatinib, all arguments will favor, instead, commercialization of the drug at a low price. While the estimated sales of Glivec were US$ 4,6 billion in 2012, estimates for the cost of R&D of this drug are in the order of just 38-96 US$ million. In connection with Novartis’ role in developing imatinib it has been noted that ‘Novartis was not “the innovative force.” Not only was all the basic research done in academic institutions, but so were the initial clinical investigations that showed STI 571 to be specifically effective against CML[chronic myelogenous leukemia ] cells in vitro and in vivo. In fact, it took a few years for Brian Druker, the investigator most responsible for these latter studies, to convince Novartis that it should invest in a crash program to develop Gleevec and to undertake large-scale clinical trials’.

This shows, on the one hand, that patents were not the main factor in finding a new therapy for that form of leukemia and, on the other, that the social costs created by the grant of patents clearly exceeded its social benefits. This is why it would be so important, as recommended by an international expert group established by the World Health Organization, to find new mechanisms that ensure the development of new pharmaceutical products which are affordable to all patients, especially in poor countries.

A weak case

Novartis cannot certainly argue that India refused to protect a new, genuinely inventive drug. The drug as such and its salt were already known, commercialized in India and elsewhere. It cannot argue either that it has been discriminated. In accordance with the Minister of Trade and Industry, with 147 patents obtained in India, Novartis is one of the pharmaceutical companies with the largest number of patents granted in the country.

It may be surprising that Novartis chose to enter into a long legal battle in a case where the usually alleged huge costs in research and development cannot be claimed and the prices of its product are excessive, and on the basis of such a weak patent application. In the view of the Indian Supreme Court, the Novartis application appeared to be ‘a loosely assembled, cut-and-paste job, drawing heavily’ upon the basic drug patent (para 164) and ‘as an attempt to obtain patent for Imatinib Mesylate, which would otherwise not be permissible in this country’ (para 194).

The reasons for Novartis to pursue this case are probably explained by the profit expectations generated by a rapidly growing pharmaceutical market in India, and by the desire not to set a negative precedent for its patents’ portfolio. The company’s choice of the battle field was clearly wrong, but it has helped to make a strong case for the grant of patents only when a genuine invention exist, and for the implementation of the patent laws in a manner that takes important public interests, such as the protection of public health, into account.


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