Earlier this week, the Indian Supreme Court ruled against
) in a patents case involving its cancer drug Glivec. The impact
of the judgment is seen as far reaching for it and could
determine the future of patent protection in India.
Novartis first received a patent for Glivec in 1993, a version
which was later discarded during development. Later it discovered
a new "beta crystal" form of the drug which it claims is more
effective than the earlier formula. In 2006, it applied for a
patent of this version in India. This move was taken despite the
fact that Indian patent law does not recognize such minor
This practice known as "evergreening" by patient groups and "life
cycle management" by the pharmaceutical industry is fairly common
in the U.S. In fact the U.S. FDA approved 1,035 new drug
applications from 1989 to 2000. Only 15% were treated as a
"highly innovative drug."
The pharma industry believes that the problem may be essentially
India centric. For instance, the new kind of Glivec has been
granted patents in around 40 countries, which includes U.S.,
Russia and China.
The U.S. industry trade group Pharmaceutical Research and
Manufacturers of America has said that the Supreme Court ruling
indicates that the atmosphere for innovation in India is poor. An
industry analyst was quoted as saying that the future of branded
drugs in India is uncertain.
But the Indian market's potential is difficult to ignore. Even
though it is at number 14 globally in terms of size, it is
growing at an annual rate of 13 to 14%. Additionally, India is
the second largest country in terms of population. At a time when
mature economies are sluggish at best, it is a market which
offers great promise for the pharma sector.
Meanwhile, India has become a major producer of cheap generic
drugs. Not only does it cater to a country where drug sales
amount to $13 billion a year, it has also emerged as a major
supplier to emerging markets. But the Indian judicial system and
patent legislations continue to make things tough for patented
The latest addition to such measures is compulsory licensing.
Last month, the controller general of patents authorized an
Indian pharma company to produce and sell a patented cancer drug
from Bayer AG. A low priced version of the drug called Nexavar
will be produced by Natco Pharma Ltd.
In Nov 2006, Natco and GM Pharma Ltd successfully contested a
patent held by
) on its lung cancer drug Iressa. This ruling was upheld in Nov
2012 by India's Intellectual Property Appellate Board.
Roche Holding AG
) lost patent protection on hepatitis C drug Pegasys during the
same month. And
) patent on cancer drug Sutent was revoked last year. Sutent was
being sold by the company in India since 2007.
Following these developments, Pfizer urged the U.S. government
to take additional measures to protect patents in India. Jon
Lechleiter, CEO of
Eli Lilly and Company
) expressed concern not only about compulsory licensing but also
about the Indian patent regime itself.
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The status of patents in India has meant that the likes of
Novartis are diverting investments to other markets such as
China. However, even China is now taking steps to change its laws
to enable domestic manufacturers to produce cheaper versions of
patented drugs. Meanwhile, the pharma sector will need to address
further challenges to patent protection in other nations like
Argentina, the Philippines, Brazil and Thailand.
Gilead Sciences Inc.
) has already adapted to the situation. It has granted Indian
generics manufacturers licenses to produce its cutting edge
drugs. They will now be made available to the Indian market at
far lower prices. Whether others follow suit or reduce research
and development activities in India will determine the future of
pharma majors in that country.