The Novartis ruling does not reflect the level of research that goes into new drugs argues pharma lawyer Krishna Sarma
On 6 August 2007, the eagerly-awaited judgment in the Writ Petition filed by Novartis challenging the constitutional validity of Section 3(d) of the patent act before the Chennai High Court was announced.
Managing partner
Corporate Law Group
Novartis had actually moved the Chennai High Court on two counts through two different petitions. In the second petition, Novartis had sought to set aside a ruling from 25 January 2006 by the Patent Office denying its application for the beta crystalline form of Glivec (imatinib mesylate) on the grounds that it lacked legal or factual justification. This second petition was later transferred to the newly-established Intellectual Property Appellate Board (IPAB) where it is still pending.
At the centre of the cases is Section 3(d) of the Indian Patent Act, 1970, which was amended in April 2005.
Section 3(d) creates additional hurdles for pharmaceutical patents by requiring the demonstration of enhanced efficacy (outside the normal patentability criteria). Salts, esters, ethers, polymorphs and other derivatives of known substances are considered the same substance and not patentable, unless it can be shown that they differ significantly with regard to their efficacy.
Three issues were considered by the Chennai High Court: (1) Whether the amended Section 3(d) is in breach of Article 27 of the World Trade Organization agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); (2) Even if the said provision could not be struck down, whether declaratory relief confirming TRIPS non-compliance could be granted; and (3) whether the provision is unconstitutional because it is vague, arbitrary, illogical and offends Article 14 of the Indian constitution.
On the basis of earlier decisions, the court found that: (1) the appropriate route for challenges to compliance with TRIPS was through the WTO dispute settlement procedure, not the Indian court system; (2) Novartis is not entitled to declaratory relief; and (3) the language of Section 3(d) is not in violation of Article 14 of the Indian constitution.
Moreover, the court observed that the purpose of the act is “to prevent ever-greening, to provide easy access to the citizens of this country to life saving drugs and to discharge the constitutional obligation of providing good health care.”
While these are important policy goals, there seems a lack of appreciation that the patent act is also about encouraging innovation and that the health policy of a country cannot be addressed through the patent act alone.
The court’s observations are a clear example of a lack of appreciation and understanding of the amount of research and development that the pharmaceutical industry undertakes and a lack of knowledge of the stage of that process in which patents are normally filed.
Pharmaceutical patent applications are usually filed at the initial stage of drug discovery. It is much later in the development cycle that efficacy and safety data is generated during clinical trials. The court seems to suggest that clinical efficacy data of the substances in question – which are not necessarily the drugs themselves – should be included in patent specifications.
Furthermore, the court did not appreciate that medical progress often occurs through incremental innovation. Spectacular breakthroughs (so-called “first-in-class products” or new active substances originating from pioneering approaches) are rare. Changes to molecules that may seem trivial can bring about tremendous benefits to patients.
A new medicine developed through incremental innovation alone may provide significant advances in treating a medical condition. It may improve patient compliance through better dosage and forms of administration. It may have fewer side effects. Extending the effectiveness of an existing medicine can therefore represent a significant innovation in itself.
With the current nature of research and development taking place in the Indian pharmaceutical industry, most of the home-grown patent applications are likely to be based on incremental inventions like new dosage forms or delivery systems and not on brand new compounds.
The Chennai High Court’s ruling may set a dangerous precedent for India’s emerging pharmaceutical sector.
Krishna Sarma is managing partner of Corporate Law Group and specializes in international trade and TRIPS issues. She represents several major pharmaceutical companies.
