The current hullabaloo over the Novartis attempt to patent Glivec has created a storm in the legal fraternity as well as the International Pharma R&D and Intellectual Property Rights fraternity.
The Supreme Court judgement is an important milestone in the attempt to clarify IP laws with respect to pharmaceutical research and generic variants. It is also a major victory towards making cutting-edge pharmaceutical advances available to the poorest of the poor.
It has made it clear that pharmaceutical R&D merely to keep off generic competitors will not be rewarded.
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I: The Case for a Pharmaceutical Patent
Patents allow pharmaceutical companies to charge a high price for drugs for a limited period of time to recoup R&D investments. This boosts confidence and acts as an enabler towards significant investments in R&D. The original case for a patent was to encourage invention by rewarding the inventors. In pharmaceuticals, it results in more drugs that we currently need but less accessibility to the drugs needed.
This is especially true when we consider the huge disparity in incomes in the developing and the developed community. A drug that costs USD 70000 a year in the US will not be accessible to the poor, or even the well-off, in India, Africa and even some of the developed nations today.
The tensions over protecting confidence of the investors and boosting research through patents vs the social cost of making advancements inaccessible to the public at large has always been a point of tension in the pharma industry. One such incident that comes to mind is the international uproar over the unavailability of HIV/AIDS drugs in the South African region. It ended when MNCs funded their drugs to these regions at rock bottom prices, and allowed some local companies to produce generic variants.
II: Not approving a Pharmaceutical Patent
India issued compulsory license on Nexavar, a late-stage kidney and liver cancer drug. It was the first ever compulsory license granted by India. In essence, a compulsory license enables a company to produce a generic variant of a specified drug, without the permission of the rights-holder, by paying a specified fee to the rights holder. India is not alone in this aspect.
Indonesia recently issued a compulsory license for a treatment for liver cancer-causing hepatitis B. China and the Philippines amended their pharmaceutical patent laws to enable their governments to take similar decisions.
The reasons for such decisions are many
Firstly, diseases are outpacing medical advancements. Considering the increased longevity and increasing exposure to behavioral risks, we have an increasing number of cancer patients. And not just cancer, the number of diabetics, and victims of other lifestyle diseases are also increasing.
Second, there is the issue of access to costly medical treatments. Due to the disparity in incomes in the developing and the developed worlds, treatments for diseases that are easily accessible in the developed world are not accessible in the developing or under-developed nations. For example, cervical cancer treatment.
Third, and this is most important in the case of developing nations, these decisions are taken not only for health but also for industrial reasons. India, China and other nations constitute the major target markets for these above-discussed drugs. However, these nations simply cannot afford such drugs, and there is immense pressure on the governments to ensure the well-being of their citizens. In such a case, it is not the economy that government wishes to protect as much as the health and well-being of its human resources.
This specific case of Glivec shows us just that.
III: The Glivec Patent and its subsequent Rejection
The ruling on the case of the patentability of Glivec has come at a time when the pharmaceutical markets are tending towards oligopolisation of a sort and high prices, as was the case before 1972 when India had pharmaceutical product protection.
An economic understanding and the legal history to the case can be referred to at this editorial. It is advised that the discerning reader go through the editorial before moving forward. It will provide a specific and thorough grounding to the case. The content in the editorial will not be reproduced here but is important to understand the current situation.
‘Ever-greening’, as such, refers to the method of spurious extending the patent on a drug by making cosmetic changes to it. This is a method by which pharmaceutical companies try to extend their sole rights and protect their market share from competition by generic variant manufacturers. This case established a thorough baseline: “The Indian Patent Laws will only provide incentive to genuine breakthroughs, and not mere cosmetic changes or accidental benefits that might result from an already discovered substance.”
IV: Possible Solutions
The current scenario thus shows that developing nations like India will definitely not bow down to pressure from corporations for safeguarding the ‘ever-greening’ phenomenon. The social cost (negative externality) towards such a decision would make it a monumental blunder of epic proportions.
Hence, there are certain obvious recommendations that need to be stated here.
First, MNCs are international R&D foundations need to make research cheaper. The huge cost ascribed to failure needs to be brought down. The USD 1 billion cost ascribed to research seems unbelievable in the current scenario. A possible scenario would be government aid to R&D organisations.
Second, the huge social costs need to be recognized. International patent holders to medical advancements should initiate licensing to generic manufacturers at costs that are reasonable for the local populace while maintaining an optimum profit ratio that sustains R&D efforts.
We see that in the final analysis of this case, the current ruling can only be positive for the Indian populace. The medical advancements will be available to the local population at reasonable costs, while pharmaceutical companies will realize that simply making cosmetic changes to medical achievements does not entitle them to ever-profit making scenarios. It is important that one not forget that Glivec was a game-changing drug introduced by Novartis, the Swiss pharma. It was awarded both the Lasker award and the Japan award for contribution to Medicine and Science. However, we have to finally recognize that in the war between profits and social costs, a democratic government will always support its people and negative social costs will be eliminated, or reduced to a huge extent. It is in the best interests of the pharmaceutical companies and organizations to recognize this and take measures that focus on profit-making through ethical and legitimate means. Otherwise, they will find that the patent system can still be amended to meet the needs of its constituents – the people who need it most.
Ashish Pai 
Nice one pai…:)
Thanks Kakoli 🙂