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India, Novartis, and Australia’s new patent law

April 1 — about the only thing on the internet that wasn’t a huge Poisson d’Avril was the “landmark” ruling that came from the Indian Supreme Court early on Monday. The result was delivered from a packed room, the two judges probably had to raise their voices to be heard. Poetry to the simple fact that their voices would be heard far and wide, as the story gets echoed through media outlets the world over. Landmark, in legal terms it was — in simple terms it wasn’t. What it really signified was a wake up call for Big Pharma — demonised for putting profits in front of patients (or rather patents in front of patients).

The case will begin a long overdue conversation on access to medicines. More and more we are coming to the conclusion that current models are broken. Or, if not broken, then shifted… biased.

“This is a huge relief for the millions of patients and doctors in developing countries who depend on affordable medicines from India, and for treatment providers like MSF,” said Dr. Unni Karunakara in a press release, MSF’s international president. “The Supreme Court’s decision now makes patents on the medicines that we desperately need less likely. This marks the strongest possible signal to Novartis and other multinational pharmaceutical companies that they should stop seeking to attack the Indian patent law.”

The drug is imatinib, commercially known as Gleevec. Novartis sought a patent for a new formulation — the beta crystalline form of Imatinib Mesylate. In the end, the final verdict was 112 pages long. With the last ten a nice comparison of the differences between the old and new formulations.

“In view of the findings that the patent product, the beta crystalline form of Imatinib Mesylate, fails in both the tests of invention and patentability as provided under clauses (j), (ja) of section 2(1) and section 3(d) respectively, the appeals filed by Novartis AG fail and are dismissed with cost.”

The end of Novartis’ seven year court battle. Indeed the ramifications for patients are important. The case is landmark but in no way unique.

In 2007, Thailand threw caution to the wind in a blatant affront to intellectual property rights and the considerations of pharmaceutical companies. Thailand announced that they would issue what is known as a compulsory licence to manufacture low-cost versions of already patented HIV and heart disease drugs from Sanofi Aventis, Abbott and Merck. A clear violation of international intellectual property rights. In that case, it was a technical legal grey area — exploiting a clause in the 1995 World Trade Organisation agreement on intellectual property that gives governments a large amount of freedom to bypass patents on drugs if they face any kind of health crisis. The question being what constitutes a national health crisis?

Big Pharma appealed, stating the act, although to the letter of the law, was not in the spirit of the law. Argentina and Philippines have already come under criticism for ignoring intellectual property rights. And with a global slowdown of the pharma industry, it is getting harder and harder for companies to chase profits. To put it another way — without the financial rewards that long-term patents offer there are less incentives to develop new medicines. The cost of creating that first pill is now estimated to be US$ 1 billion.

Some might dismiss the violation of intellectual property rights as the devil-may-care actions of rogue emerging states, but more and more the conversation is happening in other nations.

In October of 2012, Australia commissioned an expert panel to review the appropriateness of the extension arrangements for pharmaceutical patents. “In certain circumstances, pharmaceutical patents can be extended by up to five years beyond the normal patent term. These provisions were introduced back in 1998, and are due for review,” said Mark Dreyfus, Parliamentary Secretary for Industry and Innovation.

As a consequence, Australia’s intellectual property system has had its most comprehensive overhaul in two decades. The new law comes into full effect on 15 April 2013. Some call it a set of tough new laws that punish and privilege both sides of the equation — an attempt to “raise the bar.” The new law makes it increasingly difficult to obtain a valid patent, increasing the standards required to receive patent protection.

How the law plays out it still remains to be seen. Indeed, there seems to be a clear intention to curb the rise of “evergreening” by pharmaceutical companies — something that seems to stifle innovation and subsequent competition.

In the end there are no simple solutions in trying to balance profits on access to medicines. Big Pharma will always seek to make new drugs and market them to us. “Novartis most certainly will continue to seek patents for its innovative products in India,” said Ranjit Shahani, vice chairman and managing director of Novartis India. “We believe it is the legitimate way to go. Novartis will be cautious in investing in India especially with regard to introduction of innovative medicines.”

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4 thoughts on “India, Novartis, and Australia’s new patent law

  1. Good post, Charles. I do have some sympathy for Big Pharma because it does cost huge lots of money to get drugs on the market. Add to this that the substantial investments do not always pay off and you begin to understand their apprehension. Having said that, I do not dispute that most of them are money-grabbing bastards.

    I don’t think it’s possible to sensitise Big Pharma into adopting a new fairer policy simply because it would mean less money or more work on their part. But there are alternative routes to explore.

    One such route is Advance Market Commitments (AMCs), now sometimes employed with hope of developing vaccines for neglected diseases. Here’s a paragraph [source] which does a good job explaining what AMCs are:

    “The idea behind AMCs is relatively straightforward: donors and developing countries put out a call for a vaccine. Ahead of any research, development or manufacturing, governments commit to buying a certain amount – with the cost heavily subsidised by donors – if the vaccine meets certain predetermined standards. That guarantees the pharmaceutical company a set market and a good price for any drugs it develops. Once a fixed number of sales is reached and the pharmaceutical company has turned its profit, it is then obligated to continue selling long-term at an affordable price, or license the technology to someone who would.”

    The real power of AMCs is that it removes the risk factor from Big Pharma, placing them onto governments and especially donors. Such a strategy appears to invoke more commitment from Big Pharma.

  2. Ah, yes… the promise of the AMCs. I could write thousands upon thousands of articles on funding mechanisms that incentivise Big Pharma to make drugs and treatments for diseases they don’t deem profitable (see #NTDs). There are a number of mechanisms in place as well as AMCs. Priority vouchers, the US governments orphan disease scheme etc. Take a look at the work BioVentures for Global Health does. Some have had a good reception. And all have their good and bad points. For example, there is only one case for a priority voucher scheme working for an NTD.

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