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The Supreme Court verdict dismissing the appeal of Novartis AG and ruling that the cancer drug Gleevec (Glivec) cannot be patented has wide-scale ramifications for multi-nationals operating in India. Meanwhile, the verdict will also benefit Indian generic drug producers and cancer patients in the country.
The drug, dispensed to treat cancer and certain types of tumours, is a chemical compount callled Imatinib Mesylate.
For cancer patients, the treatment would cost $2,600 (Rs 1,41,800) (exchange rate of Rs 54.30/dollar) while the generic version of the drug costs around $175 ( Rs 9,502) per month. Indian drug companies such as Natco Pharma and Cipla that manufacture generic version of Glivec will benefit the most from the apex court verdict.
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"More than the positive impact on Indian generic drug producers, the verdict on the said patent is negative of multinationals operating in India. This verdict comes at a time when India emerging as one of the largest manufactuging hub for global pharma industry," said Surya Patra, senior pharma analyst at Systematic Shares.
The decision also sets a benchmark for several intellectual property disputes in India, where many patented drugs are unaffordable for most of its 1.2 billion people, 40% of whom earn less than $1.25 a day.
India's domestic drugs market is the 14th largest globally, but with annual growth of 13-14% and the world's second biggest population, it has massive potential at a time when traditional developed markets have slowed down.
The apex court applied Section 3(d) of the Patents Act and ruled that the new version of the drug was not an ‘invention’. The provision says that the claim of invention cannot be made by “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”.
Applying its interpretation of the provision, the judgment said that the drug was not “an invention as understood in the law of patent in India.”
The judges, after a detailed analysis of the chemicals and their efficacy, added that there was no material to show that there was increased efficiency in the use of the new version of the medicine.
Novartis India share ended down 1.8% at Rs 588 while Cipla gained 1.2% to end at Rs 384 and Natco Pharma surged 5.4% to end at Rs 452 on the Bombay Stock Exchange.
