The Novartis Decision: Is the Big Win for Indian Pharma Bad News for Investment?

The rejection of Novartis' patent application for a drug it developed more than a decade ago has been hailed by health care advocates. But it may spell bad news for New Delhi's attempts to lure foreign investment to the country

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Rafiq Maqbool / AP

Ranjit Shahani, vice chairman and managing director of Novartis India, speaks during a news conference in Mumbai on April 1, 2013

In a decisive victory for India’s pharmaceutical industry, India’s Supreme Court rejected Novartis’ patent application for the cancer drug Glivec on Monday, ending a seven-year battle by the Swiss drugmaker to get a patent in India on its powerful leukemia drug. The medication, which was approved for use in the U.S. back in 2001, has been produced generically by Indian pharmaceuticals for years at a fraction of the Swiss drug’s cost. The Indian drug industry’s victory, however, is being described as a stunning defeat for intellectual-property rights and may have repercussions on India’s attempts to attract foreign investment.

Nevertheless, health activists have called the top court’s decision a win for patients seeking cheaper treatment and against “evergreening,” the alleged practice of making minor tweaks to an existing drug to prolong a company’s hold on a patent and protect it from being produced by other firms as a cheaper generic version once the patent has expired. The ruling was met with enthusiasm by Indian drug manufacturers, which produce a generic version of Glivec, or Gleevec, as it is called in the U.S. market. Patients’-rights groups, who advocate for cheaper drugs to be available in countries like India where few can afford costly medication, also applauded the move. Advocates were concerned that a ruling in favor of Novartis could set a precedent that would ultimately cut off India’s vast supply of cheap generic drugs for diseases like HIV. Such medicines are exported to other developing markets. Millions of poor patients rely on them.

(MORE: How an Indian Patent Case Could Reshape the Future of Generic Drugs)

India’s generic-drug industry took off in 1970 after the government allowed for multiple patents to be granted on products with small adjustments to the process in which they were made. Today the industry is one of the nation’s biggest moneymakers, but India itself is a hugely attractive market for pharmaceutical companies. Novartis filed for an Indian patent on Glivec in 2006 and appealed after its application was rejected on the grounds that the drug had simply been amended but was not new. Novartis has argued that the drug had significant differences from earlier versions that made it eligible for a patent.

The drawn-out case has been closely watched by a global industry that, despite India’s reinstating stricter patent laws as a condition of being granted access to the World Trade Organization in 2005, is growing increasingly frustrated with the nation’s seeming reticence to recognize intellectual-property rights. Last month, the Financial Times reported that Roy Waldron, the chief intellectual-property counsel for Pfizer, said at a congressional hearing in Washington that India “routinely flouted trade rules to bolster the Indian generic industry at the expense of innovators.”

Indeed, the fact that India is creating a tough environment for global companies to continue to invest in new drug discoveries has been one of the chief criticisms of Monday’s ruling. In a statement, Novartis said the Supreme Court’s decision “discourages innovative drug discovery essential to advancing medical science for patients.” It went on to say that the company’s “primary concern of this case was with India’s growing non-recognition of intellectual property rights that sustain research and development for innovative medicines.” According to Novartis, 95% of the more than 16,000 patients who are prescribed Glivec in India today are receiving it free of charge through the company’s donation program.

The move also comes at an awkward moment for parts of the government that have been lobbying hard to convince global companies that India is friendly to foreign investors. On Monday, the same day the decision came down, Finance Minister Palaniappan Chidambaram was actively courting investors in Tokyo, telling reporters that India could handily absorb an annual $50 billion in foreign direct investment and reiterating the government’s commitment to simplify the process. Big Pharma, for now, does not seem likely to push to the front of the line.

86 comments
sagormax
sagormax

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verticalpharmacy
verticalpharmacy

Novartis is the third largest beneficiary of registered patents in India, behind Roche and Sanofi, with 147 patents to its name in the country.

AudreyGi
AudreyGi

Novartis is not the first of the pharma industry to face the case. Bayer and Roche have also seen their patents rejected by the Indian law. 

I just read another article on the same topic : http://www.cfo-insight.com/corporate-strategy/corporate-strategy/novartis-patent-defeat-means-cfos-must-rethink-ip-in-india/

I'm afraid this might lead those big pharma companies, as they said, to "invest with caution"... and will all know this means fewer R&D. Let's just hope they find a better solution.

AVGopalakrishnan
AVGopalakrishnan

It is greed by NOVARTIS which has landed them into trouble. No sovereign nation will ignore health of its Citizens and allow MNCs to fatten their wallets. NOVARTIS should have played their cards well by strategic marketing of the drug at affordable prices. The main question here is the Section 3(d) of THE PATENTS ACT, 1970. The Supreme Court has given verdict on the basis of this section which has been passed by the Indian Parliament way back in  1990s. Hence every one knew the outcome which is quite natural. Don't judge the granting of a Patent on the basis of ever greening method  as it is only to obtain the exclusive rights in perpetuity. And this would be unfair to the whole concept of granting a Patent. 

tgcyl
tgcyl

What a mischievous title for the article ! The case was not about generic industry at all.The Indian courts just upheld the law and nothing more or less. This title completely diverts the core of the case. I am surprised most western media houses talk about generic industry as the winner. It is as simple as law of the land.

arvay
arvay

This "evergreening" practice is gaming the system to avoid the investments required to develop new drugs -- which would be the logical thing for these companies to do if they want to stay in business -- innovate to make profits. So cutting this tactic off globally would be a good thing.

Capitalism is already failing us in healthcare, its ability to provide us with new cures and cost-effective treatments on the basis of the profit motive is already questionable. We need a new approach, a method of narrowing  and accelerating the profit opportunities to those options that produce social benefit along with profits to those companies and executives who are allowed to keep operating.

Kamal.Abrol
Kamal.Abrol

Kudos to the Supreme Court of india halting Novartis's attempt of profiteering through ever greening trick of patenting. Although I respect, patent rights and the rights of those invest in research, I do not support making undue profits by these businesses. There need to be a balance between right and social responsibility. Kamal Abrol

Ram2
Ram2

Why would a multinational charge  20-25 times more for the same drug  than a generic company ?.

Patent -- should be given only for true innovation, not for tweaks to existing stuff

Victor Ferreyra
Victor Ferreyra

If U.S. politicians fail conciliators or unwilling to positive results, send our troops peacekeepers White Berets Argentinas to chat with Kim Jong-Un!

momen56
momen56

And....why is it headlined  as a Big Win for Indian Pharma companies?  If an Indian pharma company can make money selling for INR 6,000/- something that an international pharma major charges INR 120,000/- for, I'm sure there's money to be had even by the latter. And the win is for the patient !

momen56
momen56

The problem with journalists today is that they are so taken in with the suits who entertain them in their plush offices that they switch their thinking circuits off. If this wasn't a one-sided story, I can't think of what it is ! Its obvious that not only has the writer not bothered to understand the other view, she hasn't bothered to read or understand the Supreme Court's ruling in detail. Its very clear that they are not against patenting new drugs, they will just not allow patents to be extended by "evergreening". And the difference it makes to a cancer patient is the fact that the Novartis drug is reported to costs INR 120,000/- for a dose, and the off patent generic costs INR 6.000/-(these figures are what I have read, and not validated).

Good show, Hon'ble Justices of the Supreme Court.

TanmayLololAnaisPradhan
TanmayLololAnaisPradhan

So the author has comments from reps from the Big Pharma industries. I am sure their comments are completely unbiased and objective. Industry stooge, how much did Novartis pay you to write this ?

TanmayLololAnaisPradhan
TanmayLololAnaisPradhan

What do you mean "alleged practice" of evergreening, dear ? Its clear whose payroll you are on. 

JosephDillard
JosephDillard

Not a word in this story about Big Pharma's  chronic lies about benefits and side effects leading to penalties in the billions, routinely absorbed as part of the cost of "doing business." And of course the practice of "Evergreening" is "alleged." This article is catbox liner in service of monopolies that are protecting their profits, not the health of human beings. If they all were nationalized, the world would applaud. 

juanmateu
juanmateu

@framibe en absoluto, más investigar y menos hacer "ingenieria legal con las patentes", los trucos para renovar exclusividad al descubierto

gkuriakose
gkuriakose

http://www.time.com/time/world/article/0,8599,1862791,00.htmlLeo Cendrowicz / Brussels

http://www.time.com/time/magazine/article/0,9171,1099499,00.htmlDaniel Williams

Time's OWN contributors have pointed out the practices of the drug industry in the above articles and yet Ms. Mahr hasn't even bothered to MENTION the other side?

If only Ms. Mahr had taken the time to read the judgement by the honourable Supreme Court of India Justices, (or even a summary of the same) she would have seen that they value both human lives & property rights. The judgement is clearly ONLY against the practice of "evergreening" (Mr. Daniel's Article will explain). The enhanced drug offered no Therapeutic benefit to the patients and was clearly an attempt at "evergreening."

If anything, the judgement only lets the Pharma industry know that it's about time they spent more money on their R&D team and less on their Lawyers. (The implication I understand from Mr. Daniels article above.)

Adebiyi Adewumi
Adebiyi Adewumi

How is that decision bad for investment?Just because capitalist vampires have just been disallowed to come in branzenly to suck the poor,suffering masses.

ehreval
ehreval

Tell me... Why is this article so one-sided? It talks so much about the possibility of lower investment in future drug research -- which is ludicrous, since India's ruling was against "evergreened" drugs -- that it's easy to forget that India's ruling could open the door to affordable live-saving drugs for billions worldwide, with 1 billion+ in India ready to reap the benefits.

azifmystery
azifmystery

@TIME @TIMEWorld Companies dont have proper cost analysis & there4 do not have a selling price with reasonable profit after considering odds

CrisRodrigoRuiz
CrisRodrigoRuiz

@3mc33Rizox el negocio farmacéutico es una mafia, tema VIH increíble, lo de India es un buen ejemplo a seguir

lezboyd
lezboyd

@TIME Gov has to prioritize saving lives over just investment. MNC pharmas can be less greedy & stop "evergreening" their patents.

Obama
Obama

One wonders how much TIME got paid to shill this article

azifmystery
azifmystery

@TIME @TIMEWorld Novartis should consider its existence in society & being a pharma co it should not behave like a profit mafia druglord.

azifmystery
azifmystery

@TIME @TIMEWorld Right 2 access to medicine is a fundamental right.Bcos u dont have price control such problem shall occur.Verdict was right

bayankaran
bayankaran

The argument of multinationals pharma companies like NOVARTIS claims the high cost of R & D for inventing new drugs for keeping up the high price. This has been debunked by the report on TIME  itself (and many other sources) which proved the same drug or treatments costs vary highly depending on who pays. 

This OPED with grave warnings on future of Indian pharma - the type of warnings issued by World Bank / IMF / West on Developing countries - basically on the lines on "do as I say, not as I do". I guess NOVARTIS marketing droids called TIME headquarters and asked them to run a sympathetic piece. We are talking about a company with $54 billion sales and $9 billion plus profit in 2012! Imagine their power. And now imagine the 'purported losses' on a few drugs going out of patent in developing countries - it will be negligible at best. 

There is no way any Indian - except for the 2-3% of the elite - can afford a $2600 ~ Rs 130000 / - cost for a month long treatment. This is a country with no health social safety net other than public medical colleges and affordable primary health care facilities and medicines. (Private Health Insurance is a new phenomenon, slowly catching on, the advantages and disadvantages we know...we have to look at USA.) 

The only argument which can be made against Indian generics - "if you can't afford the drug, why don't you suffer the consequences". I guess even the most hard nosed penny pinching corporate drone is not THAT heartless. 

Instead of fighting the generic manufacturers, NOVARTIS should create their own special generic versions and beat them on a price point. But the suits running the show looked at some powerpoint and decided, lets first fight, if we lose start making generics. 

And journalists like Krista Mahr should stop peddling the corporate line / talking points. We have been seeing this attitude from mainstream MSM for decades...time to change TIME!

Lawsenate
Lawsenate

@TIME @TIMEWorld Novartis says the SC ruling on its cancer drug patent will discourage future innovations. what you think ?

Ain Riz
Ain Riz

Shows a democratic and right move. The pharmaceuticals in east are capitalizing on poor people enhancing misery for those with debilitating diseases

sanjivsane
sanjivsane

@TIME @TIMEWorld NO IT IS AN CORRECT DECISION OF HON.SUPREME COURT OF INDIA. THE MNC CAN NOT TAKE A RIDE IN THE NAME OF PATENT.

Paul Oduye
Paul Oduye

Common sense and people's interest must always come first before financial gain; that is smart.

BobJan
BobJan

The pharma's in the U.S. have the best Congress money can buy.