The Novartis Decision: “Evergreening” and the future of Generics

16.04.2013

On April 1, 2013, India’s Supreme Court rejected Novartis’ Patent Application for the cancer medication- Gleevec (spelled Glivec in India). This high-profile case, not only ended Novartis’ seven-year battle in India, but also represented a bigger battle over generic drugs both overseas and in the U.S. The Novartis case, has divided once more health activists who claims excessive pharmaceutical patenting stifles generic competition that makes life-saving medication accessible to patients around the world; and defenders of intellectual property rights demanding India protect patented medication.

In 2005, as a requirement of admission into the WTO, India reenacted patent protections for intellectual property. Until that change in India Patent Law, Indian pharmaceutical companies produced freely medicines pioneered by foreign drug companies at a fraction of the cost. Nevertheless, the Indian patent office stated earlier this year that generic manufacturers are entitled to make their own versions of a patented medication and pay a royalty to the patent holder, given the patented medication is not made available at a reasonable price in the Indian marketplace.

Novartis Gleevec’s U.S. patent expires in 2015, meaning that other generic-drug manufacturers will be joining the Indians soon enough in their ability to produce Novartis’ medication. Anticipating this, Novartis has already engaged in “evergreening”, by which pharmaceutical companies introduce new drugs that are just slightly modified formulations of older drugs in order to effectively maintain patent protection. India’s Supreme Court rejected Novartis’ “evergreening”, on the basis that the formulation was not significantly different or better than previous drugs on the market. Meaning that, the modification made by Novartis did not satisfy the standard of inventiveness required under Indian patent law. As a result, Indian pharmaceuticals may continue producing generically Novartis’ medication and sell it in India at a fraction of the Swiss drug’s cost. Novartis claimed that there was a misconception suggesting Gleevec is an incremental improvement or “evergreening” rather than a novel drug. Per Novartis, This confusion was based on a patent for the synthesis of the molecule of imatinib, that was granted in 1993. However, this molecule represented only the first step in the process to develop Gleevec as a viable treatment for cancer.

 

 

Secondary patents such as Novartis’, add, on average, between six and seven years to the patent life of the original compound. Some claim, that India’s Supreme Court decision may prevent such filings for minor innovations, at the expense of breakthrough innovation. On the other hand, Novartis and companies alike claim the decision discourages innovative drug discovery. One of the primary concerns of this case, was with India’s growing non-recognition of intellectual property rights that sustain research and development for innovative medicines and may have repercussions on India’s attempts to attract foreign investment.

In its 2013 Special 301 Report, the U.S. Trade Representative’s (USTR) critiqued the ruling by India’s Supreme Court in the Novartis case. One result, was the USTR decision to retain India on its “Priority Watch List” for the present year. That decision, was based on India’s limited progress in improving its Intellectual Property Regime and enforcement system. The USTR also expressed concerns regarding the effect of limiting the patentability of potentially beneficial innovations. Such claims were also made by the WTO, and have led to a lot of protest by pharmaceutical companies.

Prior to the Novartis decision, India had begun compelling pharmaceutical companies to issue licenses to domestic generic companies to make their patented drugs. Now, the Supreme Court’s decision will set an important precedent, which may change foreign drug companies’ perception of India. In the short term, patents may not guarantee foreign drug companies profit. Nonetheless, without patents, or with weak ones, no new and innovative medicines for untreated diseases would be developed and there would be no new generics, in India and other developing countries. Meaning that, later on the cost of lost investment will begin to outweigh the public health advantages.

 

 

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