Global Insider: India’s Novartis Ruling Sets a Precedent for Brazil, South Africa

Global Insider: India’s Novartis Ruling Sets a Precedent for Brazil, South Africa

On April 1, India’s Supreme Court concluded a protracted legal battle between the Indian government and the pharmaceutical company Novartis, ruling that Indian companies could continue to produce low-cost generic versions of a drug the company had sought to patent. In an email interview, Sudip Chaudhuri, an economics professor at the Indian Institute of Management in Calcutta specializing in patents and the pharmaceutical industry, explained the background and likely impact of the ruling.

WPR: What effect will the decision have on companies’ evergreening, or repatenting products after minor changes in their makeup, of pharmaceutical patents in India?

Sudip Chaudhuri: Using the flexibility built into the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, India amended its patents act to insert a new section to conform to TRIPS. Under this section, new forms of known substances are not patentable “unless they differ significantly in properties with regard to efficacy.” The Supreme Court has interpreted efficacy to mean therapeutic efficacy. In the recent case, the Swiss pharmaceutical company Novartis was denied a patent for a new form (beta crystalline) of a known substance (imatinib mesylate) because Novartis could not demonstrate that the new form enhanced the therapeutic efficacy of the drug. The court rejected Novartis’ claims of better bioavailability and better physical characteristics such as stability of the compound, saying that these do not necessarily improve the therapeutic effect. With this simple but strict criterion of efficacy, evergreening of patents will be more difficult -- pharmaceutical companies will not be able to get a new patent and effectively extend the patent term just by modifying an existing drug.

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