Is Novartis ruling a watershed?


"It is a landmark judgement," Sakhtivel Selvaraj, a leading Delhi-based health economist, tells me, hours after the Indian Supreme Court's decision to reject a plea by Swiss pharmaceutical firm Novartis to patent an updated version of its cancer drug, Glivec.

Monday's decision means generic drugmakers can continue to sell copies of the drug at a lower price in India, one of the fastest growing pharmaceutical markets in the world.

For one, Dr Selvaraj says, the judgement upholds India's "progressive" patent laws that throw out frivolous patents and clearly distinguish between what is new and what already exists.

"The law sends out the signal that we don't want to encourage companies to take patents on substances which already exist."

More importantly, the decision is a major boost to cheap life-saving drugs in a country where the healthcare system cannot cope with the demands on it and most people end up buying their own medicines if they can afford to.

India spends a little over 4% of its GDP on healthcare, compared with an average of 8-9% among developed countries.

Some 70% of this spending is by individuals and households. A substantial amount of household spending in India is on medicines, government figures show. Most of that is on generic drugs as patented drugs comprise less than 10% of drug sales.

That explains how critical cheap drugs are to saving lives in India.

Also, as experts like Dr Selvaraj point out, the judgement will be happy tidings for people around the world.

India, they say, is the "pharmacy of the world".

Some 40% of the drugs produced by its $11bn pharmaceutical industry, one of the largest in the world, are exported. The majority of the exports comprise cheap generics.

Not surprisingly Novartis is unhappy with the ruling - it says the move "discourages innovative drug discovery essential to advancing medical science for patients".

The company had sounded out a warning ahead of the judgement.

"If the situation stays as now, all improvements on an original compound are not protectable and such drugs would probably not be rolled out in India," Paul Herrling, former Novartis's head of research and development, told the Financial Times.

"Why should we?" he added

Experts like Dr Selvaraj believe such warnings are specious.

"India can actually hold such a threat out to other developing countries, not the other way round. A substantial amount of its generic drug market is in Europe and the US," he says.

Also, India possibly doesn't need to worry about this decision affecting foreign investment in its drug industry, which, at less than 2%, is low.

Most foreign pharmaceutical companies appear keener to acquire Indian companies, or they trade in imported medicines.

"They make very little medicine here," Dr Selvaraj says.

Glivec, which is used to treat chronic myeloid leukaemia and other cancers, costs about $2,600 (£1,710) a month. The generic equivalent is currently available in India for just $175.

Do drugs really have to be so expensive? asks Michelle Childs of Medicins Sans Frontiers.

It's a good question.

"It is true that innovative new drugs can change the way we treat people and we need more of them," she wrote in an article on the BBC News website last week. "But innovation is of little use if people cannot access new treatments because they are so expensive."

Clearly, as Michelle Childs says, a new approach is needed.

Soutik Biswas Article written by Soutik Biswas Soutik Biswas Delhi correspondent

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  • rate this

    Comment number 105.

    Just came across an interesting article on developing countries and flouting intellectual property rights mentioning this Novartis case and other industries: - I believe the legal challenge in countries like India HAS to include some social aspect. If IPR were strictly enforced then India would be miles behind where it is right now.

  • rate this

    Comment number 104.

    Father of Glivec (the drug for which Novartis is fighting) hails SC ruling:

    The drug was actually developed jointly by, Dr Brian Druker, director of the Oregon Health & Science Univ Knight Cancer Institute, & Nicholas Lydon of Novartis. Like most other drugs, it too had some public funding.

  • rate this

    Comment number 103.

    That change in direction of policy started discouraging technocrats & scientists to become entrepreneurs themselves; quite opposite of what created some of the best or most successful knowledge based industries. Now wealth managers (not creators), venture capitalists rule the boards in big corporations.

    That changed a lot on how corporate operate, how leadership & talent is evaluated & groomed.

  • rate this

    Comment number 102.

    Watch the documentary (#101) mainly after 19 mins from the beginning. Ronald Reagan not only destroyed US higher education but also paved ways for corporate consolidation, declining innovation & competition. That tendency contributed a lot in recent financial meltdown as well.

    Lately, western culture/policies favored wealth management than creating one, unlike its own past.

  • rate this

    Comment number 101.

    West in general & US in particular don't really promote competition & innovation, but favor consolidation.

    Since Reagan era (1980s), US became more interested to manage wealth than creating. Big corporations fight more on law & lobby, than attracting talents & encourage innovation.
    Check its NPR documentary on "foodoploy'-

  • rate this

    Comment number 100.

    Either the PR brigade for pharmaceuticals is out in strength here today or the story isn't clear enough:
    - Novartis developed the drug and took a patent on the drug
    - It had a monopoly on the drug until the patent expired
    - It then took a patent on the SAME drug with only meaningless variation
    - The Indian Supreme Courth threw this second patent out because it wasn't novel

    Well done India

  • Comment number 99.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 98.

    Manufacturing edge with technician grade 'scientist', limited corporate ability & ambition would erode fast, as current trend demanding more transparency & quality shows.

    Quality of many Indian drugs are questionable. One third of drugs sold in India are fake while many miire are substandard-

  • rate this

    Comment number 97.

    Indian generic drug Cos are happy this time but they also shd be worried. They seem to forgot the lesson they should have learned in 1980s for cheaper antibiotic production. Now almost all such flourishing generic antibiotic manufacturing units are closed- went to China & other countries.

    Generic drug industry rely on (sale) volume. Almost anyone with limited technical ability can do it.

  • rate this

    Comment number 96.

    At a time of increased need for new drugs ,especially antibiotics,it seems perverse to weaken patent protection.Indian businesses will now get a free ride on another company's research.

  • rate this

    Comment number 95.

    Indian drus Cos mostly rely on cheap everything (manpower, raw materiel, cost to break laws etc) & easy to copy generic drugs than on innovation. Last drug invented in India was in 1921- .
    It's due to declining standard of education and leadership (both political & corporate).

    India & its corporate sector runs on short-term, ad-hoc basis.

  • rate this

    Comment number 94.

    @ NonLondonView (93). It's trademark and copyright issue, not patent per se (for DVD, consumer electronics etc).
    In this case it's NOT denying patent to Novartis for any 'novel' drug but 'ever-greening', which also a problem for EU, as I mentioned in #60.
    Yes, India has a serious problem to enforce any meaningful corporate governance, patent (IP) & quality control issues.

  • rate this

    Comment number 93.

    So basically India does not provide acceptable standards of product protection. If it was a pirate DVD or VideoGame or Phone Software everyone would be up in arms.
    As its a medicine it is somehow reasonable behaviour.
    How very...inconsistant...

  • rate this

    Comment number 92.

    Big Pharma tries to preserve govt-granted monopolies as long as possible; they often "tweek" some little change to gain a new patent. This raises cost of drugs. e.g. California Case, Cipro, state asserted that one brand-name pill today costs $5.30, but generic costs $1.10. Multiply that by the size of market & you have $3.5B siphoned from the sick, AND THAT'S JUST ONE DRUG!

  • rate this

    Comment number 91.

    This sounds too good to be true. The poor being helped by cheaper drugs !? Actually, some Indian pharmaceutical companies have become billion dollar multinationals from making cheaper generics and selling them in developed economies. There is a very casual and cavalier attitude to IP and Patents among the pharma community in India. There is no importance given to innovation.

  • rate this

    Comment number 90.

    Many pharmaceutical companies use the B.S. of saying their investment in research. Are we not forgetting the heavy investment of the public (through NIH, NSF, DHS, USDA, etc) on drug making? Why such investments are not counted properly? Now Google is reaping money from already available information that the government has paid for. Will the common man get a share of Google's profit?

  • Comment number 89.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 88.

    The ruling is sensible and Novartis should not get discouraged. They need to spend more money on research for new drugs and less on lobbying. This same goes to others such as Monsanto (the most hated company in India), Pfizer, Bayer, Dow, etc. Think how a Cipro tablet costs less than 10 cents in India and about $8.00 in the USA!

  • rate this

    Comment number 87.

    An American study back in 2007/2008 showed the big pharma spent more money on lobbying the American Senate than the research and development of new drugs. I think that tells you all on this subject.

  • rate this

    Comment number 86.

    Sounds like a sensible ruling to me based on what has been written about this particular drug in the article. A rational approach to patenting is needed if Monopoly should be kept under control. Striking a balance between the interests of the common man and those of the drug companies is the key.


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