Giving pharma its prescription

India, April 2 -- The Supreme Court's (SC's) verdict on Swiss multinational Novartis AG's blockbuster anti-cancer drug, Glivec, is almost a classic East versus West story and it seems never the twain shall meet over the contentious issues of drug pricing and patenting rules.

On Monday, the SC dismissed the MNC's efforts to push through a patent on Glivec after the company challenged the Indian Patent Act that prevents "evergreening" - a way of extending the patent period by marginally altering a drug without any significant change in therapeutic value.

This is a landmark judgement and the court has rightly upheld the progressive Section 3(d) that deals with "evergreening" of drugs. Under Section 3(d), incremental inventions can be patented, provided they entail demonstrable novelty and improved usefulness. But as the SC said in its ruling, Glivec is not a new medicine but an amended version of a known compound, which "did not satisfy the test of novelty or inventiveness".

A month's dose of Glivec costs around Rs. 1.2 lakh, while India-manufactured generics are priced at Rs. 8,000. Novartis as well as other pharma majors claim that rulings like these will have two major impacts on there will be a dip in research and development and foreign investment in the sector.

However, available literature shows that this claim may not be true. When it comes to drug discoveries, only 12-13% drugs are breakthrough drugs, less than 40% are moderately therapeutic breakthrough drugs and 50% are 'Me-too' drugs. The last category of drugs is structurally similar to already known drugs, with only minor differences.

Glivec falls in this category. Then as far as foreign investment in research and development is concerned, foreign companies really don't invest in India; in fact, many don't even manufacture their drugs here. They either import medicines or contract out to small-scale pharma companies.

According to the Public Health Foundation of India, the global pharma companies' claim that they spend at least $1 billion on developing a new drug is not correct, it could be one-fifth of that amount.

They earn much more from a single market like the US. In fact, many experts argue that in the backdrop of a strong patent regime, rulings like this will spur innovation because only breakthrough drugs will give companies the opportunity to recoup their investments.

As far as foreign investments are concerned, in the last four to five years, pharma investments in India have been more 'brownfield' than 'greenfield'.

The ruling has confirmed that India has a high bar for approving patents on medicines and is a clear signal for patent offices of the country that the law should be strictly applied, and frivolous patent applications should be rejected.

Published by HT Syndication with permission from Hindustan Times.