TRADE: High Stakes in Attack on Indian Patent Law

By IPS Correspondents Reprint | | Print |

Praful Bidwai

NEW DELHI, Feb 1 2007 (IPS) - As a legal battle launched by the Swiss pharmaceuticals multinational Novartis against India’s patents law warms up, health activists are gearing up to mount a campaign against drug monopolies and the people’s right to medicines at affordable prices.

As a legal battle launched by the Swiss pharmaceuticals multinational Novartis against India’s patents law warms up, health activists are gearing up to mount a campaign against drug monopolies and the people’s right to medicines at affordable prices.

At stake is not just the fate of the Indian drug industry, described as “the pharmacy of the developing world”, but the life and well-being of hundreds of millions of users the world over.

Novartis was one of the 39 companies which took the South African government to court over five years ago to prevent it from importing cheaper AIDS medicines. It recently moved the Madras High Court, which has posted the next, substantive, hearing for Feb. 15.

Novartis’ present challenge focuses on Section 3(D) of the Indian Patents Act 1970, amended in 2005, which disallows patents for marginally modified drugs, which do not constitute a novel molecule or original invention.

The company is appealing against the rejection by the Indian Patents Office of its application for a patent on a particular form of a cancer drug (brand name, Gleevec/Glivec). It has also challenged the validity of Section 3(D) on the ground that it is unconstitutional because it is incompatible with the Trade-Related Intellectual Property Rights agreement (TRIPs) under the World Trade Organisation (WTO).

Novartis prices Gleevec/Glivec at Rs 120,000 (2,719 US dollars) per dose, while Indian companies sell it at Rs 8,000 (181 dollars). If Novartis is granted a patent on the drug, tens of thousands of Indians, whose per capita annual income is only a fifth of the cost of a single dose, will be deprived of life-saving treatment.

The Novartis judgment will have far-reaching implications for generic drugs used for the treatment of countless diseases and disorders, including anti-retroviral vaccines for HIV-AIDS, as well as medicines for cancer, asthma, heart disease and mental illness.

Indian-made generic drugs cost only a fraction of the same chemical entities manufactured in the West, which enjoy monopolistic privilege through strict product patents.

Currently, nearly 10,000 drug patent applications await examination in India. If India grants patents for them the same way that many developed countries do, that would spell the end of affordable medicines in developing countries.

India is a leading manufacturer of generic drugs and has successfully developed cheap but high-quality medicines thanks largely to the Patents Act 1970, which did not grant product patents, but only process patents.

“This law ensured that a local manufacturer could innovatively make an existing patented drug by using a different process”, says S.P. Shukla, India’s former chief negotiator at the WTO’s predecessor, General Agreement on Tariffs and Trade, and convenor of the Indian People’s Campaign against the WTO. “The Patents Act discouraged profiteering by multinational corporations and created access to reasonably priced drugs for the poor.”

Over half the medicines currently used for AIDS treatment in the developing countries come from India. Indian-made products are also used to treat over 80 percent of the 80,000 AIDS patients in Medecins Sans Frontieres projects.

“We have opposed patent applications for crucial AIDS drugs”, says Elango Ramchandar, president of Indian Network for People with HIV/AIDS. “Our survival depends greatly on winning these patent oppositions. Novartis is a test case for us.”

India had to amend the 1970 act because it signed TRIPS, but it built certain safeguards in the amended law to discourage monopolies, profiteering and frivolous patent applications claiming me-too versions and different salts of the same chemical entities as new drugs worthy of protection.

The 2005 amendment was extremely unpopular. Following a robust public debate in which acronyms like TRIPS, GATT and WTO became household words, the government offered public assurances that the rights of Indian patients and the interests of the domestic drug industry would be protected.

Novartis’s challenge puts those assurances, and the public interest, in jeopardy. Many analysts believe that the challenge is legally unsustainable.

Says Amit Sengupta, joint convenor of the People’s Health Movement (PHM): “It is utterly bizarre, indeed outrageous, that a multinational company should question the Indian government’s sovereign power to enact its own law.”

Sengupta said that it ‘’makes no sense to argue that an Indian law can be rendered invalid because it differs from the provisions of an international treaty. Besides, the new Patents Act is compliant with TRIPS. The 2001 Doha Declaration on TRIPs and public health reiterates the rights of governments to include pro-public health clauses in their patent laws”.

Novartis contends that the Act violates Articles 51A and 253 of India’s Constitution. But Article 51 belongs to the non-enforceable chapter of the Constitution on “Directive Principles of State Policy”.

And Article 253 only states that Parliament has the “power” to make laws for “implementing any treaty, agreement or convention with any other country or countries”. It does not compel Parliament to do so.

Says Sengupta: “Novartis is using the present litigation to ‘test the waters’. If it gets a favourable judgment, that would be a major victory for it, but consign tens of thousands of leukaemia patients to penury or death or both.”

He adds: “If Novartis loses, it would have still succeeded in focusing attention on the Indian Patent Act. This will be watched by other MNCs who have never been happy with the safeguards introduced in the Act”.

There is no guarantee that the Indian courts will interpret the Constitution and the Patents Act in the right spirit. In recent years, India’s higher judiciary has handed down numerous judgments that restrict the fundamental rights of citizens while creating new rights for corporations or expanding their privileges.

Novartis has also opened a public relations front. It says it is fighting for a principle (patents), not for pricing medicines high. It claims it magnanimously supplies Gleevec/Glivec free to patients who cannot afford it. But Sengupta points out that this is not voluntary: “Novartis was ordered by court to give medicines free to all those whose income is less than Rs 360,000 (8,159 dollars) a month.”

“Novartis may appeal to the Supreme Court against an unfavourable High Court verdict”, says Shukla. “It will drum up the issue and try to derive the maximum mileage from it. The government of Switzerland or the U.S. might take the matter to the WTO’s Disputes Settlement Body on its behalf. That’ll be a tough battle.”

To counter Novartis, says Shukla, “the People’s Health Movement and other NGOs including the National Working Group on Patents and Allied Matters, must launch a vigorous public campaign.”

In the past, these organisations set up three commissions of experts on TRIPS and related issues, which forced the government to incorporate changes into the Patents Act 2005.

Shukla believes another commission is now necessary: “The pressure of public opinion is all-important. That is the best guarantee against capitulation by the judiciary or the administration to lobbying and litigation by powerful multinationals.”

Clearly, a lot is at stake in the Novartis case: the people’s right to affordable medicines, preventing unethical monopolies in the healthcare system, and sovereignty of national decision-making.