Of Evergreening and Efficacy, Part II

By Ryan Abbott

I wrote earlier this month about the case between Novartis and the Union of India, in which the Supreme Court of India affirmed denying a patent for Novartis’ anti-cancer drug Glivec. Adriana Benedict added an insightful post about the case last week.

In my last post, I talked about the theory behind the decision and what it means for a drug to be therapeutically efficacious. Today and tomorrow, I thought it would be interesting to focus on the practical outcome of the case. In other words, what does this case mean for the access to medicines more generally, both in India and around the world?

Judging by recent public comments, this will be a landmark case. On the Novartis website, where the company is hosting an impressive array of resources devoted to the Glivec patent case, it states that this “decision discourages innovative drug discovery essential to advancing medical science for patients.” Eric Althoff, a Novaris spokesman said, if “innovation is rewarded, there is a clear business case to move forward. If it isn’t rewarded and protected, there isn’t.” On the opposite side of the spectrum, Indian Trade Minister Anand Sharma called the ruling “a historic judgment” that reaffirmed the position of Indian law requiring substantive innovation for patent protection. The Supreme Court itself noted that the “debate took place within a very broad framework. The Court was urged to strike a balance between the need to promote research and development in science and technology and to keep private monopoly (called an ‘aberration’ under our constitutional scheme) at a minimum.”

Despite the controversy, this case won’t necessarily have a wide ranging impact. It involved some unusual elements, which require historical background in India’s patent system to understand.

At the time of India’s independence, the country’s patent regime permitted patents for pharmaceutical products. However, there was a sentiment that pharmaceutical product patents catered to multinational corporations (MNCs) at the expense of domestic companies. For example, one study found that only 10 percent of Indian patents were held by Indians or Indian companies. As a result, a series of amendments to India’s Patent Act gradually eroded patent protections for pharmaceutical products. This culminated in the passage of a new patents act which expressly excluded product patents for medicines (the Patents Act, 1970, which came into force in 1972 and replaced the Patents and Designs Act, 1911).

This scaling back of patent protection for pharmaceutical products has been partially credited with the rise of the domestic Indian pharmaceutical industry. In 1970, MNCs enjoyed a 68% market share of the Indian pharmaceutical market. In 2003, Indian companies collectively commanded a 77% market share. Moreover, this has occurred in a growing market. The domestic Indian pharmaceutical market has been projected to reach $49–74 billion by 2020. India is already the largest exporter of generic drugs in the world, and as the Supreme Court noted, India has become the “pharmacy of the world.” For instance, it supplies over 80% of HIV/AIDS medicines for the 8 million HIV-positive patents in low- and middle-income countries. India does not only export to the developing world; India’s largest export recipient is the United States.

India’s patent regime was profoundly impacted by the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) which came into force on January 1, 1995. TRIPS is a comprehensive multilateral agreement that establishes minimum levels of intellectual property protection for all members of the World Trade Organization (WTO), including India. It requires that patent protection be made available for pharmaceutical products.

India, along with a number of other developing nations, was afforded a transition period to amend its patent system to comply with the requirements of TRIPS. Specifically, India was permitted to delay application of TRIPS provisions for five years until 2000, with an additional five year delay permitted for pharmaceutical product patents. However, Article 70.8 of the TRIPS Agreement required India to adopt an arrangement called “the mailbox procedure.” This allowed applicants to file product patents that would lie dormant until the expiration of the transition period. Under this system, a product patent could not be granted on a pharmaceutical product filed before 1995, while patents could be granted for applications filed from 1995–2005 that would become effective after 2005.

That is one reason why the Glivec product case is unusual; Glivec was invented during a transitional time for the Indian patent system. Novartis filed an initial patent application in the U.S. for the drug “imatinib” (in free base form) in 1992. If that drug would have been invented today, it would have enjoyed a twenty-year period of market exclusivity in India.

Of course, even if Glivec had been patented in India in 1992, that patent would have expired last year. (In point of fact, the U.S. patent did not expire last year—the patent term was extended for 586 days to “compensate” for the delay necessitated due to FDA review). That is why, in an effort to extend patent protection for Glivec, Novartis filed a second patent application in 1997. The second application was for a specific variation (the beta crystalline form [it can also exist in alpha form or in amorphous form]) of the salt of imatinib (imatinib mesylate). That patent is due to expire in 2019 (it also received a U.S. extension). In 2001, the U.S. Food and Drug Administration approved “imatinib mesylate” for marketing. While the active ingredient of Glivec is imatinib in its free base form, capsules contain imatinib mesylate because it has greater bioavailability.

Cases involving the transition period are going to be less relevant in the future. Most of the countries that have domestic production capability are now committed to TRIPS, or even TRIPS-plus, patent protection. While the 2001 WTO Ministerial Declaration on the TRIPS Agreement and Public Health adopted in Doha (the Doha Declaration) extended the period for compliance with pharmaceutical provisions to 2016, this only applies to least developed countries (LDCs). There is limited pharmaceutical manufacturing capability in some LDCs. For example, Uganda which has the capability to manufacture active pharmaceutical ingredients (API) for some of the anti-retroviral drugs (ARV) used to treat HIV/AIDS.

Tomorrow I will make my last post on this case to wrap up my discussion on the effect of this ruling on access to medicines in India and elsewhere.

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