Closing the Pharmacy of the Third World? : India’s Battle with the International Pharmaceutical Industry

Friday, October 5, 2012 by Lauren Powers

India, considered by many to be the “Pharmacy of the Third World,” has built a reputation for manufacturing cheaper generic versions of expensive branded pharmaceuticals.  Following the amendment of its patent laws in 2005, India has been forced by multinational pharmaceutical companies to reconsider the strictness of these laws, and Novartis AG v. Indian Patent Office serves as the first case based on the new laws heard in the Indian Supreme Court. Because this suit is a case of first impression for the Indian Supreme Court, it possesses the potential to drastically alter international patent law, which would have a particularly large effect on India and other developing countries.  Since the origins of the suit in a regional High Court, critics of the current Indian patent regime have argued over whether it should be amended, but proponents and critics of the patent laws have predicted consequences in stark contrasts of each other. If India does not make a decision in this case, it should prepare the courts for an onslaught of similar litigation in the coming years.  India would benefit most from balancing domestic and international interests in generic drugs following the wake of Novartis AG v. Indian Patent Office in the fall of 2012 and other potential future cases like it.

India would benefit most from balancing domestic and international interests in generic drugs following the wake of Novartis AG v. Indian Patent Office in the fall of 2012 and other potential future cases like it.

Indian patent officials claim that they drafted the controversial portions of the amendments to the India Patents Act with the intention of preventing “evergreening,” a process that occurs when pharmaceutical companies file new patents on miniscule changes in their pharmaceuticals that produce no real alteration in efficacy in order to extend the lives of their patents.  Understandably, India claims to have drafted the amendments to prevent evergreening by pharmaceutical companies trying to extend the lives of their patents, but a reasonable argument can be made that the law also inhibits incremental innovation, the process by which pharmaceutical companies legitimately attempt to increase the effectiveness of patented drugs.

Initially, the regional Madras Patent Office rejected Novartis AG’s Glivec patent application because the examiner postulated that the form of Glivec proposed should be considered prior art because of Novartis AG’s previously granted international patents for the free base imatinib form of Glivec. Additionally, he believed that the new beta crystalline form of imatinib mesylate did not meet the “enhanced efficacy” requirement found in §3(d) of the amendments based upon a 30% increase in bioavailability from the free base version of the drug.

India should clarify its “enhanced efficacy” requirement in §3(d) of its 2005 amendment of the Patents Act in order to avoid any wastes of resources for both the Indian Patent Office and inventors seeking Indian patents.  Firstly, no other WTO country has included this rigid of an efficacy requirement or its equivalent into its patent laws. While the WTO does not require India to abide by the laws or guidelines of any other WTO nations, India should reasonably consider modifying its laws to better meld with other internationally established laws in order to permit less room for argument from inventors and particularly from the multinational pharmaceutical companies.  Secondly, given the unpredictable nature of chemistry and pharmaceutical production, the Patent Controller’s rejection of a 30% increase in bioavailability does not seem to adhere to India’s own requirement for a demonstration of enhanced efficacy. Therefore, Novartis AG had to significantly alter Glivec in order to produce a 30% increase in bioavailability, so it appears reasonable for Novartis AG to consider this alteration to constitute “enhanced efficacy” under §3(d).  Therefore, Novartis AG has reasonably argued that, as it currently stands, §3(d) of the Indian Patents Act lacks enforceability due to ambiguity.

By examining the public outcry based on India’s current predicament regarding its patent law system, it appears that India cannot remain idle and figure out solutions to challenges to its patent system as they arise.  While the majority of India’s domestic generic pharmaceutical industry would prefer for the laws to remain in their current embodiments, this approach does not ultimately benefit India’s economy or the international protection of intellectual property rights as they related to pharmaceuticals.  Ultimately, if the Indian Supreme Court determines that a reworking §3(d) of the 2005 amendment to the India Patents Act and permitting Novartis AG to receive a patent on Glivec has become necessary this Fall, these actions will not create the myriad problems that opponents of the change anticipate, particularly if India adopts laws that assuage the consternation of both sides of the argument by encouraging incremental innovation while simultaneously stimulating its booming generic pharmaceutical industry.