"Glivec is not the issue, R&D protection is"

Q&A/ Ranjit Shahani

Multinational drug major Novartis' lawsuit to gain a patent for a new formulation of its anti-cancer Glivec was the first legal challenge to Section 3(d) of the Indian Patent Act which seeks to bar evergreening by restricting patents for minor improvements to old formulations. Though the company suffered a major blow earlier this month when the Madras High Court dismissed its challenge, Novartis India Managing Director Ranjit Shahani is optimistic. "Our actions advanced this essential debate in India; now local and international leaders in both industry and academia recognise the inadequacies of Section 3(d) and are raising serious concerns about the deficiencies of the Indian patent system," he told Shyamal Majumdar and P B Jayakumar in an interview. Excerpts:

Drug price, especially that of an anti-cancer drug like Glivec, is a highly emotive issue in India. Haven't you chosen the wrong drug to take on the government?

First, our fight is not on Glivec. The case raises much broader issues which go far beyond whether Novartis gets a patent for Glivec or not. These range from access to innovative medicines by patients in India, to the further direction of pharmaceutical research and ultimately to India's ability to attract investment from research-based industries.

Second, the price of Glivec is zero in India. Over 7,200 patients in India have been treated with Glivec and all of them got the drug, costing around Rs 101,000 a month, absolutely free under the Glivec International Patient Assistance Program (GIPAP). Since its launch in 2002, Glivec has actually been sold to only 45 patients in India and all of them had insurance cover. Broadly, I think the pricing issue has been built out of proportion for all drugs. The cost of pharmaceuticals makes up for only 15 per cent of the total cost of healthcare for even a serious disease like cancer, but the myth of high pricing is still being propagated.

So what's the exact problem that Novartis is facing?

One cannot negate the fact that there are and will be a few high-priced drugs. In such a case, the key factor is the cost of research. If research does not bring in returns, there is no investor anywhere in the world who will be inclined to put money into research and this will be the death knell of all research-based pharma companies. Novartis India is a local company creating wealth for its Indian shareholders and operating in India for the health of its people.

Novartis AG had challenged the decision of the Indian patent office which said that our application for patent did not satisfy its requirements for a "novel and inventive step." The cancer drug has patent protection in other 40 countries and the same should be the case in India. Our petition goes to the root of the debate about intellectual property rights, patents, innovation and patient access to medicine. The Section 3(d) provision of the Indian Patent Act is not included in any other patent regime in the world. How do you define "trivial" innovations and "genuine" innovations? The issue should be what is "patentable innovation" and what is "incremental innovation".

The charge against Novartis is that what you are trying to patent is a trivial compound and the move to patent it is an attempt at evergreening.

But this is a misconception. The term evergreening refers to the practice in which the patent holder seeks to patent trivial or useless modifications of an already existing molecule to extend its monopoly beyond the 20-year period granted by the original patent. Novartis frowns at such practices. But more importantly, calling the move to patent the beat crystalline form of imatnib mesylate as an attempt at evergreening exhibits a complete lack of understanding. It is an innovation worthy of a patent. Glivec is not a newer form of an older compound. It is a break-through life-saving medicine that has transformed the treatment of leukaemia and other rare cancers.

But Novartis seems to be waging a lone battle, without support from any other associations.

The Glivec issue is only a beginning of the legal cases to follow, unless India solves these anomalies. There are many thousands of patent applications pending with the mailbox and I am sure a majority of them will not get patent protection, causing similar litigations in future. Indian companies talk about spending 5 to 6 per cent of their turnover on R&D. How many of the products of their R&D are "patentable innovations" and will get a patent, if the same yardsticks for declining exclusive marketing rights (EMR) for Glivec are applied to their products as well? As against this, you should consider that companies such as Novartis spend about 18 per cent of their worldwide turnover "" which runs into billions of dollars "" to come up with genuine "patentable innovations". Now Section 3 (d) has become a major debate because of our case.

So why didn't you appeal in the Supreme Court?

Our action has intensified the patent debate in India. It is clear there are inadequacies in the Indian patent law that will have long-term consequences for patients. We are confident political leaders and relevant groups will now work together to ensure that India's patent system is strengthened. Novartis will continue to participate with these groups on this important discussion.

Are you saying that investments and new drugs will not come to India, unless the patent rules are changed?

It's a fact. A McKinsey report had predicted that India's clinical research business will touch $1.5 billion by 2010. So far, it is only $230 million. For moving more clinical trial business to India, the industry needs data protection. No company will undertake research in India, unless the laws are strengthened. We had so many committees to look into data protection since the enactment of the new Patent Law in 2005. Where is the Satwant Reddy Committee report?

The NGOs and others who are accusing companies such as Novartis of looting the Indian public should take up larger issues like access to medicines. The industry is willing to offer a particular percentage of production free to the government.

Will the ongoing controversy affect your plans of setting up an R&D centre in Hyderabad?

Neither Novartis AG nor Novartis India announced plans to set up an R&D centre in India. The reports that came out regarding this were actually wrong, except for our commitment announced earlier on setting up an IT backend support centre in India. A lack of respect for international intellectual property laws will serve as a limiting factor on India's desire to expand its research-based pharmaceutical industry.

Novartis prioritises investments in R&D in countries which respect intellectual property, a key factor in our decision-making. The Chinese government has made great progress in strengthening protection for intellectual property, and Novartis has announced a significant R&D centre in Shanghai. Concerning our plans in Hyderabad, Novartis reviewed options to acquire land there, but no final agreement has been signed.