India's top court dismissed Swiss drugmaker Novartis AG's attempt to win patent protection for its cancer drug Glivec, a blow to Western pharmaceutical firms targeting India to drive sales and a victory for local makers of cheap generics.
The decision sets a benchmark for intellectual property cases in India, where many patented drugs are unaffordable for most of its 1.2 billion people, and does not bode well for foreign firms engaged in ongoing disputes in India, including Pfizer Inc and Roche Holding AG, analysts said. Among the chief beneficiaries of Monday's Supreme Court ruling will be India's Cipla Ltd and Natco Pharma Ltd , which already sell 'generic' Glivec in India at around one-tenth of the price of the branded drug.
"The multinational companies will have to find new ways of doing business in India," said Deepak Malik, healthcare analyst at brokerage Emkay Global, suggesting they may consider licensing agreements with local firms to offer cheap versions of branded drugs like Glivec. Ranjit Shahani, managing director of Novartis India Ltd , the firm's locally listed unit, said it will still file patents and carry on investing in the country, but with caution, and will continue to refrain from research and development activities there.
"The intellectual property ecosystem in India is not very encouraging," Shahani told reporters in Mumbai after the ruling. Healthcare activists have called on the government to make medicines cheaper in a country where many patented drugs are too costly for most people, 40 percent of whom earn less than $1.25 a day, and where patented drugs account for under 10 percent of total drug sales. "This appears to be the best outcome for patients in developing countries as fewer patents will be granted on existing medicines," said Leena Menghaney, Medecins Sans Frontieres' Access Campaign manager for India.
Over 16,000 patients in India use Glivec, the vast majority of whom receive it free of charge, Novartis says. By contrast, generic Glivec is used by more than 300,000 patients, according to industry reports. "It's a victory for patients who take these medicines and also for the government," said M. Adinarayana, company secretary at Natco Pharma. The Supreme Court's decision comes after a legal battle that began when Novartis was denied a patent for Glivec in 2006.
Novartis had argued it was entitled to a patent for the amended version of Glivec because the original patented compound was never suitable for making into a pill. Developing the final chemically stable form took years of extra work and it was this effort that marked the real breakthrough in developing Glivec as a life-saving cancer medicine, the Swiss company said.