Info Service on Health Issues (Apr13/02)
Debunking Pharma's Cant Against the Novartis Judgment: Myth and Fact
Brook K. Baker, Senior Policy Analyst Health GAP
Novartis, its fellow Big Pharma multinationals, Chambers of Commerce, and PhRMA have all roundly denounced India's Supreme Court's decision invalidating Novartis' patent application for Glivec (Gleevec in the United States) and its affirmation of strict anti-evergreening standards of patentability and inventive step in India. As usual, Big Pharma cannot tell the truth about what India has done, what international intellectual property rules require, and what the impact of this decision will be on product introductions in India and innovation of new medicines. Because journalists continue to carry Pharma canards and since observers are anxious to understand whether India's decision is legal or purely instrumental to advance industrial policy in favor of Indian generics, I debunk the major myths with what I hope are convincing facts.
Myth 1: India was obligated to issue a patent on Glivec because it is a superior medicine and because 40 other countries have done so.
Fact: Prior to the effective date of the WTO TRIPS Agreement (January 1, 1995), there was no provision in international law whatsoever requiring any country in the world to grant patents on pharmaceutical products. None. Accordingly, India lawfully adopted a patent law in 1970 that refused to grant patents on pharmaceutical or food products.
When India signed the TRIPS Agreement and became a member of the WTO, it was not required to retroactively grant patents on pharmaceutical products that had been invented before the effective date of the TRIPS Agreement (subject only and arguably to a 1-year grace period for filing after a first application elsewhere).
The initial patent on the active pharmaceutical ingredient in Glivec, imatinib, had first been filed in the U.S. in in April of 1993. That application was later withdrawn and a second application was filed on April 28, 1994, but it had a so-called priority date back in 1992. Accordingly, India was under no obligation whatsoever to recognize this first application, not only because a patent application on it was never filed in India but because India had lawfully declined to grant pharmaceutical product patents at the time of invention.
Thus, it is completely irrelevant that other countries granted patents on the first Glivec patent application. Likewise, it is irrelevant that that Novartis continued to research and modify that compound and that Glivec is an excellent cancer medicine. Everyone agrees it's an excellent cancer medicine, but that doesn't mean it is automatically or retroactively entitled to a patent monopoly.
Myth 2: India was obligated to issue a patent on Glivec's "improved beta crystalline form of imatinib mesylate" discovered/invented in 1997 because it was a new medicine and 40 other countries granted a patent.
Fact: This is the crux of the Indian Supreme Court's decision upholding the strict standards on inventive step and standards of patentability that India adopted in section 2(1)(j) and (ja) and section 3(d). India had flexibility under Art. 1.1 of the TRIPS define strict standards for novelty, inventive step, and industrial applicability. It chose to limit evergreening of pharmaceutical patents by preventing patents on new form, uses, dosages, formulations, and combinations of known medicines or know substances. The "beta crystalline" patent application that Novartis filed in India in 1998, with a 1997 priority date, fell squarely in the middle of the prohibited category. It was purportedly a "new form" of the previously invented substance imatinib and its salt imatinib mesylate.
Even if the beta-crystalline form was the optimized active pharmaceutical ingredient in Glivec (a fact that Novartis did not claim either to the Food and Drug Administration in the United States nor drug regulatory authorities in India), that does not make the modification of the previously known substance patentable.
Novartis claims in its press statements that because Glivec was never marketed using imatinib in its original form and that its beta crystalline form was not a modification of an existding medicine is specious. The Indian Patent Act section 3(d) refers to modification of "known substances," not just known existing medicines.
Myth 3: Novartis' new and improved beta crystalline form of imatinib mesylate showed increased efficacy ¬ it was a "better" drug.
Fact: As the Indian Supreme Court confirmed, section 3(d)'s standard of enhanced efficacy requires that the revised medicines show significantly enhanced therapeutic efficacy when involving a medicine that treats human disease. Novartis only offered evidence of better flow properties, improved temperature stability, and reduced hygroscopy. None of these physical features affect treatment as such. Similarly, Novartis offered some after-the-fact evidence on increased bio-availability but it did so in comparison to imatinib only not imatinib myselate, the appropriate comparison. Even then, increased bioavailability does not directly equate, on its own, with enhanced therapeutic efficacy.
Accordingly, contrary to its claims, Novartis offered no relevant evidence whatsoever that its secondary patent application on Glivec showed enhanced efficacy as required by section 3(d).
Myth 4: India is just favoring its generic industry by this ruling.
Fact: Of course, this ruling will benefit Indian generic companies because they are fulling capable of manufacturing generic imatinib mesylate to global standards. However, this ruling also means that companies in countries where Glivec is not patented could also manufacture and export to India. Novartis claims that its patent in Glivec is protected in 40 countries, but that means it does not have a patent in many others. With no patent bar in a country of production and no patent bar in India, a generic company in any of those countries could also benefit from the denial of the India patent on Glivec.
Myth 5: This decision means that India does not respect intellectual property rights and that it is impossible to get a patent on a medicine in India.
Fact: Contrary to this claim, India's Patent Act clearly allows patents on medicines that are either brand new (don't involve a known substance) or are modified sufficiently to offer enhanced efficacy in the treatment or prevention of human illness. Studies show that there have been hundreds of patents on medicines in India since it revised its Patent Act in 2005. In fact, those studies show that India has probably been too lenient in grating weak patents and that it has not properly been applying section 3(d) to weed out evergreening patents. In sum, it is not impossible to get a patent on medicines in India, you simply have to meet lawful strict standards on what is inventive and patentable.
Myth 6: Neither Novartis or other drug companies will patent their medicines in India or bring new medicines to the market.
Fact: Novartis officials made this sad-face prediction on April 1 but by April 2 they had withdrawn this claim and clarified that they would still seek patents in India. And every other Big Pharma company will do so both to gain access to the world's third largest market by volume (one that is growing at an annual rate of 15-20% and that will have $49-$74 billion a year in sales by 2020) and to block Indian generic companies from producing either for the domestic market or the export market (where India is now the largest volume exporter of generics in the world). Big Pharma companies will continue to seek patent monopolies on truly novel medicines and those with major therapeutic improvements - full stop. They will seek to sell to India's growing middle-class and to middle¬classes in other countries that Indian generics might otherwise supply.
What Big Pharma won't be able to do is to file new patent applications over and over again on minor modifications and thereby gain many added years of monopoly protections and supra-competitive profits. They'll still make money, but not as much as they had hoped for.
Myth 7: Pharma won't do any future research and development in India or invest in India.
Fact: Big Pharma doesn't site its research and development facilities based on whether there is a maximalist patent regime there or not. Big Pharma does R&D for a global market, not for a particular country. For example, drug companies don't do diabetes research for Indian diabetics in India and for British diabetics in the UK. They site their research facilities where there are good scientists, good infrastructure, favorable taxes, etc. Moreover, Big Pharma companies are buying up Indian generics, contracting manufacturing, and doing clinical trials in India hand over fist. Maybe they're not currently siting their latest greenfield R&D facilities in India, but you can't bet such decisions havenothing to do with India's patent regime.
Myth 8: The Novartis decision undermines the global search for new medicines.
Fact: Of all the canards, this is probably the most ludicrous. Big Pharma makes the vast majority of its profits on sales to rich patients in rich countries. Nearly 75% of global drugs sales by dollar volume in 2011 was in Europe, North America, and Japan. Indian sales comprised less that 2% of global sales. Drug giants do not make R&D decisions or shut down promising drug candidates because they didn't squeeze a little extra profit out of small market.
To the contrary, drug companies waste a lot of research dollars now trying to evergreen existing medicines instead of focusing on truly innovative medicines. They spend nearly 2 1/2 times on marketing and administration as they spend on R&D. Despite the "risks" of R&D they still retain more in profits than they actually spend each year on R&D.
In sum, the Novartis decision will have little or nothing to do with Big Pharma's R&D efforts. But this doesn't mean that continuing innovation isn't important. Nonetheless, it makes little sense to hold poor patients and poor countries hostage for 20 years selling monopoly protected medicines at prices they can't afford. We need a better system for investing in therapeutically targeted innovation, with a variety of push and pull mechanisms, and a better system for sharing global R&D costs that is delinked from the market for selling "generic" medicines at low-cost with minimal mark-ups.
Myth 9: India is engaged in other unlawful IP practices such as issuing compulsory licenses.
Fact: India has issued one compulsory license on an extraordinarily expensive cancer medicine sold by Bayer. Some other high-price cancer medicines are under review to see if India wants to issue government use license (licenses that will leave the lucrative private sector to Big Pharma). However, TRIPS Article 31 specifically allows for compulsory licenses as does the 130 year old Paris Convention as does the 2001 Doha Declaration on the TRIPS Agreement and Public Health. Virtually all countries, including the United States, have compulsory licensing rules on the book. Such licenses are not limited to emergencies or infectious diseases, despite what Pharma officials say (and the press uncritically reports). Such licenses can even favor local producers.
Myth 10: Novartis was litigating on principle - all that Big Pharma wants is a fair chance to earn enough money to make the next generation of life-saving medicines.
Fact: Big Pharma and its enablers in Europe and the US are ruthlessly trying to expand its patent and data monopolies through court suits, free trade agreements, diplomatic pressures, and biased technical assistance. The US in its Trans Pacific Partnership Agreement negotiations is trying to mandate patent standards that would require patents on new forms, uses, and formulations of existing medicines - in essence outlawing section 3(d). It is also trying to obtain separate monopolies on clinical trial data and win mandatory extensions of patent terms. The EU sought many of the same terms in direct free trade negotiations with India but has not been successful in most of its efforts. But it is still seeking investor right and IP enforcement rules that will strengthen Pharma's hand. For example, investor clause rules in NAFTA are currently being used by Eli Lilly to extort $100 million from Canada from having revoked a patent on an ADHD medicines pursuant to well-established national law. Eli Lilly, through private non-reviewable arbitration, is claiming that its reasonable expectations of monopoly profits are being frustrated and that Canada has to have US style levels of protection. It's important to note in this regard that investor¬state dispute resolution, if adopted in India, would have permitted Novartis to bring the same kind of claim against India regardless of what the Supreme Court had ruled.
Pharma does not want an even playing field. It wants longer, broader, and stronger monopolies. It persists in promoting medicines off label, hiding adverse results, bribing foreign regulators, and funding Congress and the executive to fight its battles and to expand its empire.
These ten myths, in one form or another, are creating a fog-bank of disinformation in the wake of the historic Novartis decision. In sum, the Indian Novartis decision is both legal and wise ¬ it reduces the risk of unwarranted patent monopolies and speeds access to low cost generic medicines of assured quality, both in India and elsewhere. The panicked reaction of Novartis, Big Pharma and their apologists is the tantrum of a bully who is frustrated because it wanted freedom to steal more candy on the playground. The press should do a much better job directly confronting Pharma's myths or at least soliciting opposing views.