[Reader-list] Novartis Case and related aspects

[A. Mani]

(From PD)
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Supreme Court Judgment on Novartis Case

Vindication of Left’s Principled Position in 2005



Amit Sengupta



Section 3(d) states: “The following are not inventions within the
meaning of this Act -- the mere discovery of a new form of a known
substance which does not result in the enhancement of the known
efficacy of that substance or the mere discovery of any new property
or new use for a known substance or of the mere use of a known
process, machine or apparatus unless such known process results in a
new product or employs at least one new reactant.



Explanation.: For the purposes of this clause, salts, esters, ethers,
polymorphs, metabolites, pure form, particle size, isomers, mixtures
of isomers, complexes, combinations and other derivatives of known
substance shall be considered to be the same substance, unless they
differ significantly in properties with regard to efficacy.”



ON December 26, 2004 the then UPA-1 government promulgated an
ordinance – The Patents (Amendment) Ordinance, 2004. The ordinance was
issued by the government to change the then existing Indian Patents
Act in order to make it conform to the agreement on Trade Related
Intellectual Property Rights (TRIPs), that India had signed as part of
the World Trade Organisation (WTO) agreement in 1994. The Amended Act
contained in the ordinance was to replace the earlier 1970 Act that
had been widely recognised as a key reason why India had become a
centre for production of affordable versions of new drugs – prompting
many to term India as the ‘pharmacy of the South’, which supplied
low-cost affordable drugs to a very large number of low and middle
income countries in Asia, South America and Africa.



The ordinance had to be ratified by parliament within six months. If
the Indian parliament had done so, we would not have been discussing
the recent judgment by the Supreme Court of India against the claim of
a patent on an important anti-cancer drug (Imatinib), manufactured by
the Swiss Multinational, Novartis. Instead of ratifying the ordinance
the Indian parliament introduced, in 2005, several measures to
safeguard continued production of new medicines by Indian companies,
even in cases when in other parts of the world, MNCs had patented
these drugs and held a monopoly over their production and sales. One
of the important clauses introduced by the Indian parliament was a new
section – section 3(d). This section lies at the heart of the
litigation that Novartis has been pursuing for seven years, and it is
this section which has been instrumental in the refusal of the patent
by the Supreme Court of India.



The recent Supreme Court judgment is the fourth time that Novartis has
been refused a patent on Imatinib in India – initially by the Patent
office in 2006, and subsequently by the Patent Appellate Board and the
Chennai High Court. Before we trace how these events unfolded, the
story of how the parliament managed to enact provisions that
safeguarded public health to some extent in spite of the constraints
of the TRIPS agreement needs to be told again.



THE STORY OF PATENTS

AMENDMENT ACT OF 2005 RETOLD

The Patents Amendment Ordinance of 2004 was a public health disaster.
It was drafted keeping in mind the interests of multinational
corporations and was clearly aligned to the neo-liberal economic
policies of the government. If ratified by parliament it would have
made it impossible for Indian companies to continue producing cheaper
versions of new drugs. Interestingly, the ordinance had not been
drafted by the UPA-1 government – the government of the day had merely
introduced a draft originally drafted by its predecessor, the BJP led
NDA government! So in the end of 2004 there was a consensus between
the principal bourgeois parties – the Congress and the BJP – as
regards how Indian’s Patent Act would be amended. Given that the
Congress led UPA-1 government had merely reproduced the earlier BJP
government’s draft, there were obvious reasons to believe that the
ordinance would sail through parliament. In the then political
spectrum only the Left Parties stood firmly against the 2004
ordinance, but they were not – on the basis of their own strength – in
a position to defeat the designs of the Congress-BJP combine.



The situation changed dramatically in early 2005 for reasons that had
nothing to do with the issue at hand. In early 2005, the BJP was
engaged in a bitter tussle with the Congress in Bihar and Jharkhand
over formation of ministries in these two states. The BJP did a volte
face and announced that it would not support the passage of the
Patents Ordinance of 2004 in parliament. This ploy of the BJP was not
a consequence of any principled opposition to the ordinance, but was
clearly an attempt to embarrass the government. But the BJP’s
opposition to its own draft (!) provided the Left with an opportunity
to intervene decisively. The Congress was now forced to seek the
Left’s support in parliament. It is this conjuncture of circumstances
that provided the Left the opportunity to introduce several amendments
to the 2004 ordinance. The recent Supreme Court judgment refers to
this process and states: “As the deliberations were going on in
Parliament, negotiations were also held between the ruling party and
some of the opposition parties, in course of which certain amendments
were suggested in the Bill”. The negotiations between the Left and the
government were long and tortuous, with the government trying to
obstruct at every step the introduction of progressive pro-health and
pro-people amendments. In the face of such strong resistance, the Left
was able to force the inclusion of several changes in the 2004
ordinance. At the end, twelve important amendments were made to the
2004 ordinance, including the insertion of section 3(d), mentioned
earlier.



The Left was able to force through these changes not just because of
the opportunity it seized in March 2005, but also because of the
consistent position it had adopted on the issue since the 1980s. While
MPs belonging to the Left were negotiating with the government in
2005, Left mass organisations were engaged in protests and
demonstrations on the issue all over the country. It was the combined
strength of the Left’s principled position inside parliament and the
mass mobilisation on the issue that took place outside, that forced
the government’s hand.



MISPLACED ALLEGATIONS OF

SELL-OUT BY THE LEFT IN 2005

There was another curious side to the events that led to the
parliament adopting the new Patents Act of 2005. When the Act was
adopted in 2005, a section of  NGOs – including some influential
international NGOs involved in the Access to Medicines Campaign –
accused the Left of having sold out! They argued that the Left should
not have allowed any amendments to the 1970 Patent Act (the 1970 Act
did not recognise Patents on medicinal products at all). While this
came across as very radical posturing, what it did not take into
account was that it was only the Left that had firmly opposed the
TRIPS agreement under the WTO since the 1980s. The international NGOs,
and their counterparts in the country, have played an important role
in mobilising against use of patents by MNCs to restrict access to
life saving and essential medicines in the past decade and a half.
Unfortunately they were nowhere part of the debate when India and
other developing countries signed the TRIPS agreement in 1994. The
actual sellout took place in 1994, and at that time it was only the
Left in India – which made common cause with the domestic industry –
which had taken a consistent position against a global patent system
that forced countries like India to change their Patent Act. It was
not an accident that India was the only country of significance that
used the entire ten year transition period before changing its law.
The ten year transition period was available to all developing
countries, meaning they were allowed the option of finally amending
their act by December 2004, though the TRIPS agreement came into force
in December 1994. However countries such as Brazil amended their act
right after the TRIPS agreement and did not wait till 2004 to do so.
That India was the last hold out was a consequence of the consistent
position and its mobilisation on the issue, that started right from
the start of the Uruguay round of negotiations in 1986. It is
interesting that many of the same NGOs and some of their vocal
spokespersons now claim the 2005 Patents Act as a victory for ‘civil
society’ and the Indian Act as a model Act. The Left has never claimed
that the present Indian Act is ideal, but it can legitimately claim
that it was the best that it could achieve given the political
circumstances in 2005.



NOVARTIS AND ITS BATTLES

IN INDIAN COURTS

Let us now turn to the Novartis judgment and its significance today.
Imatinib Mesylate has been patented in many countries by the Swiss
MNC, Novartis, which sells the drug under the Brand name of Glivec. In
India, the initial patent application for the medicine was rejected by
the Patent Office in 2006. Novartis persisted in its efforts to get a
patent and appealed to the Patent Appellate Board. When the Board
rejected Novartis’ application again, the company challenged the
decision in the Chennai High Court. It also challenged section 3(d) of
the Indian Patents Act – a provision that had been cited by the Patent
office while rejecting the Glivec patent application. The Chennai High
Court rejected both the appeals, which led to Novartis bringing its
appeal to the Supreme Court of India.



The original patent on Imatinib was filed by Novartis in 1993 for the
‘amorphous free base’ molecule of the chemical, Imatinib Mesylate. An
amorphous substance is what exists in nature and is usually a mixture
of different variants. In 1998, Novartis filed a patent application in
India for the Beta crystalline variant of the molecule, which is
derived from the amorphous substance that they had earlier patented.
They also claimed that the Beta crystalline variety is better absorbed
by the body. The 1993 patent was not recognised in India as at that
time Indian law did not allow patenting of medicines. When the law was
changed in 2005, Novartis pressed for acceptance of its patent
application for the Beta crystalline variety of the salt. The patent
office rejected the patent and held that the invention claimed was
anticipated by prior publication; that the invention claimed by
Novartis was obvious to a person skilled in the art; and further that
the patentability of the alleged invention was disallowed by section
3(d) of the Indian Patent Act.



Novartis’ subsequent appeals in the Patent Appellate Board and Chennai
High Court were rejected. The appellate board, while rejecting the
patent again said: “Since India is having a requirement of higher
standard of inventive step by introducing the amended section 3(d) of
the Act, what is patentable in other countries will not be patentable
in India. As we see, the object of amended section 3(d) of the Act is
nothing but a requirement of higher standard of inventive step in the
law particularly for the drug/pharmaceutical substances.” Novartis
also challenged Section 3(d) of the Indian Act in the High Court,
claiming that it was in violation of India’s obligations at the WTO.
The Chennai High Court pointed out that domestic courts cannot be
asked to give an opinion regarding international treaties and
obligations, and Novartis should take its complaint to the dispute
settlement mechanism in the WTO. Novartis, has never done so and
clearly Section 3(d) does not violate international obligations.



In the Supreme Court, Novartis challenged the interpretation of
Section 3(d). This section stipulates that trivial changes in existing
molecules cannot be candidates for fresh patenting. Such trivial
patenting (known as ‘evergreening’) is an old ploy used by drug
companies to extend their monopoly. Companies first apply for a patent
for the basic molecule and then attempt to extend the life of their
monopoly by subsequently applying for fresh patents after a few years
on as slightly different version of the original molecule. Such
changes do not qualify for a patent under the Indian Act as they would
have been anticipated (would have been obvious) to a person skilled in
the art – thus it does not constitute real innovative activity.



In its appeal to the Supreme Court, Novartis argued that section 3(d)
is not being properly interpreted. The section says that minor
variations in an existing molecule cannot be patented unless there is
a ‘significant’ enhancement in efficacy of the medicine. Novartis
claimed that since the Beta variant is better absorbed – ie, it has
better ‘bioavailability’ (by about 30 per cent) it constitutes a
significant therapeutic enhancement. It is interesting to note here
that the patent office, while rejecting the company’s patent
application, had stated that anybody trained in chemistry would know
that an amorphous salt is made up of different variants, and it is
common knowledge that the variants are likely to have slightly
different properties.



THE SUPREME COURT

JUDGMENT AND ITS IMPLICATIONS

The Supreme Court in its judgment opined: “The subject product, that
is, beta crystalline form of Imatinib Mesylate, is thus clearly a new
form of a known substance, i.e., Imatinib Mesylate, of which the
efficacy was well known. It, therefore, fully attracts section 3(d)
and must be shown to satisfy the substantive provision and the
explanation appended to it”. The judgment further goes on to say: “In
whatever way therapeutic efficacy may be interpreted, this much is
absolutely clear: that the physico-chemical properties of beta
crystalline form of Imatinib Mesylate … may be otherwise beneficial
but these properties cannot even be taken into account for the purpose
of the test of section 3(d) of the Act, since these properties have
nothing to do with therapeutic efficacy”. The judgment also addressed
the claim of increased bio-availability by stating: “No material has
been offered to indicate that the beta crystalline form of Imatinib
Mesylate will produce an enhanced or superior efficacy (therapeutic)
on molecular basis than what could be achieved with Imatinib free
base….”.



Novartis has consistently played the victim in the Glivec case. It
continues to say that it was not fighting the case to make money but
to uphold the principle that it deserves credit for the investment it
has made in research to develop the drug. What Novartis does not tell
us is that Glivec was granted ‘orphan drug’ status in the United
States and was therefore eligible for tax rebates equal to half the
cost of clinical testing (the major cost for drug development). Brian
Druker, one of the scientists involved in developing Imatinib while
working in Oregon Health and Science University Cancer Institute wrote
in a signed article in Livemint in 2007: “Many scientists, if not most
of those I have collaborated with in these settings, are engaged in
research primarily motivated by the pursuit of knowledge as a means to
help patients. For many of these scientists it is, therefore, of great
concern that the results of their efforts can’t reach patients and
save lives because of pricing strategies and patent policies such as
‘patent evergreening’ (minor changes to existing molecules designed to
extend patent monopolies) used by partners further down the drug
development process”. Druker has again reiterated this position
recently (in a comment to the Times of India) in the light of the
Supreme Court judgment.



Novartis had challenged a very important part of the the Indian Patent
Act and its attempt to balance the rights of patent holders with the
needs of the Indian people for access to treatment that is affordable.
Section 3(d) of the Act has been used several times by the Indian
patent office to deny patents for other trivial inventions, especially
in the case of HIV/AIDS medicines. If Novartis’ appeal was upheld
applicability of section 3(d) would have been seriously compromised,
leading to the possible reopening of a number of rejected patent
applications. It could also have opened the door for a flood of
applications, many of which were not filed by companies because of the
existence of Section 3(d). The Novartis judgment, thus, has
implications for access to medicines not just for leukemia patients
but for a whole range of patients – located not just in India but in
over a hundred countries in Asia, Latin America and Africa – who are
today able to access cheaper drugs made by Indian companies.


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Best

A. Mani




--
A. Mani
CU, ASL, AMS, CLC, CMS
http://www.logicamani.in