The Novartis Decision- What Does it Portend for India?
In my last post, I had given a concise primer to the Novartis patent saga and listed the broad reasons of the Indian Supreme Court for rejecting Novartis’s patent application on its anti-cancer drug Glivec. In this post, I’ll discuss only the most salient legal finding of the Supreme Court given that it is an extremely technical matter requiring extensive analysis of the law. For a detailed analysis of the decision, interested readers may visit the blog “The Demanding Mistress“. I’ll also discuss in brief the implications of the decision for India in general, and its innovation regime in particular.
One of the cardinal grounds for rejection of patent to the drug Glivec by the Supreme Court was its (drug’s) failure to satisfy the requirement of “enhancement of known efficacy” under Section 3(d) of the Patents Act. Before discussing the findings of the Court, it is important to first read the relevant provision itself:
3. What are not inventions: The following are not inventions within the meaning of this Act–
…(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or 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.
Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;
The purpose of this provision is to prevent any party from making minor changes to an existing drug or substance or apparatus, and claiming a patent for it, when such change does not in fact result in “enhancement of known efficacy”. Importantly, this provision prevents parties from making minor changes to a patented drug, and again seeking patents for such an altered drug, thereby effectively extending the patent term of the original drug. As stated in my last post, Section 3(d) was introduced in 2005 to prevent mischief by pharma product patent owners.
In applying this provision to the Glivec patent application, the Supreme Court was required to first circumscribe the meaning of “efficacy”. Following were the observations of the Court on the definition of “efficacy”:
“180. What is “efficacy”? Efficacy means “the ability to produce a desired or intended result”. Hence, the test of efficacy in the context of section 3(d) would be different, depending upon the result the product under consideration is desired or intended to produce. In other words, the test of efficacy would depend upon the function, utility or the purpose of the product under consideration. Therefore, in the case of a medicine that claims to cure a disease, the test of efficacy can only be “therapeutic efficacy”.
The question then arises, what would be the parameter of therapeutic efficacy and what are the advantages and benefits that may be taken into account for determining the enhancement of therapeutic efficacy? With regard to the genesis of section 3(d), and more particularly the circumstances in which section 3(d) was amended to make it even more constrictive than before, we have no doubt that the “therapeutic efficacy” of a medicine must be judged strictly and narrowly.”
Clearly, according to the Court, “efficacy” in the Act was a reference to “therapeutic efficacy” i.e. ability of the drug to treat a condition or a disease. Efficacy does not therefore include or relate to any other beneficial property of the drug which has no relation to the efficacy of the drug.
In other words, if innovation results in better storage capabilities of the drug, or increased thermodynamic stability, but none of this results in increasing or enhancing the know efficacy of an existing drug, such a drug would attract Section 3(d) and hence become ineligible for grant of a patent.
In the case of Novartis’s application which claimed beta crystalline form of Imatinib Mesylate, the Court held the following based on relevant technical literature:
Imatinib Mesylate was already known prior to Novartis’s patent application;
Beta crystalline form of Imatinib Mesylate did not exhibit enhanced efficacy over and above the parent drug Imatinib Mesylate.
Consequently, Section 3(d) applied squarely to the facts, according to the Supreme Court.
Implications of the Decision
A cursory perusal of news reports point to contrasting reactions- jubilance on the part of health activists and nervousness on the part of global pharma majors operating in India. Novartis itself has said that it will now “cautiously” invest in India.
The common accusation of pharma majors is that the Indian Judiciary takes an activist approach when it comes to pharma patents. But let’s ask ourselves this question- Was the decision of the Supreme Court influenced by extraneous “activist” concerns which have no relation to merits?
The answer is a resounding no, because the Hon’ble Supreme Court has applied the law to the facts of the case and decided it on merits. True, every issue can have two possible conclusions, but that by itself does not render the Novartis judgment an unreasonable one. It may also be true that this is not the perfect judgment, but for anyone who reads the decision, it would be evident that the judgment is the consequence of a judicial process, and not an arbitrary executive/government action.
Therefore, in so far as this case is concerned, the rule of law has been certainly adhered to. Consequently, the judgment certainly cannot be the basis for any unwarranted generalization that India does not respect the Intellectual Property Rights of foreign investors.
Will the judgment result in reduced foreign investment in India in the pharma sector and in general? Although only time shall tell, global pharma majors cannot ignore India and react in a knee-jerk fashion to the decision. That said, the Novartis case apart, there is a pervasive sentiment that Indian Patent establishment is reluctant to enforce the rights of patent owners in general, more so if they happen to be non-Indians. Before this sentiment takes firm root and undermines the ostensible non-partisan nature of the Indian establishment, it would help to address at least some of the legitimate concerns of right holders, regardless of their nationality.