Indian Courts to Hear Drug Patent Case Final Arguments

Final arguments will be heard this week in the case between pharmaceutical company Novartis AG and the Indian patent office. A patent for a cancer drug called Glivec was rejected by India’s patent office because it believes that the new drug was an amended version of a known compound. The final ruling is important because it will determine what constitutes a drug innovation that warrants a patent, thus protecting the drug from being made as a generic until the patent runs out. India’s massive generic drug market will be significantly affected by the decision.

Reuters explains:

The case has rekindled tensions between Big Pharma and India, following a decision by the patent office in March to strip Germany’s Bayer AG of its exclusive right to sell another costly cancer drug, Nexavar, because most Indians cannot afford it.

The hearing involving Novartis starts on Wednesday. It is expected to last several weeks, with a verdict a month or two later.

Western firms see huge potential in India’s rapidly growing economy but are wary of lax protection for intellectual property. They argue India is failing to recognize valuable medical innovation.

Their critics – who include international aid groups and Indian generic drug manufacturers – say a win for Novartis would jeopardize the supply of cheap medicine to hundreds of millions of people in India and around the world, since India is the world’s biggest exporter of cheap generic drugs.

“The stakes are very high on both sides,” said Leena Menghaney, a manager in New Delhi for Medecins Sans Frontieres (MSF), which relies on Indian-made generic drugs to treat AIDS and other diseases in Africa and many poor countries.

Novartis’ drug was approved in 2001 in the United States, where it is sold under the trade name Gleevec and can cost $70,000 a year. Patients take one or two pills a day, depending on the dosage.

Discount programs mean it is available for a lot less in poor countries and in India more than 95 percent of patients receive it free of charge under a company donation scheme, according to Novartis. Indian generic versions, meanwhile, cost about $2,500 a year.

Indian generic companies can produce drugs at a fraction of the cost of originator firms like Novartis or Bayer because their costs are lower and they do not need to plough money back into future research.

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A loss for Novartis in the case would not have a big financial impact, since India is never likely to account for more than a small fraction of Glivec’s global sales, which totaled $4.7 billion last year. The real concern for the industry is that a rebuff would confirm India as a country where patents are exceptionally hard to secure.

Gilead Sciences Inc is also fighting a patent rejection on its HIV/AIDS medicine Viread in an Indian court, while Roche Holding AG is battling to defend its cancer drug Tarceva from cut-price generic copies.

At the heart of the Glivec case is dispute over what level of innovation is needed to secure a patent in India, where section 3(d) of the Indian Patent Law sets strict restrictions on multiple patents for one drug.

Novartis has been fighting since 2006 to get a patent on an amended form of Glivec, which oncologists view as a major advance in treating chronic myeloid leukemia and some gastrointestinal cancers.

Its bid has been rejected because an older version of Glivec was granted a patent in 1993 in some markets, although not in India where drug patents were not applicable at the time.