The Madras High Court in the southern Indian state of Tamil Nadu has decided to transfer the Novartis AG's appeal against the rejection of its patent plea for the anti-cancer drug Glivec to the Intellectual Property Appellate Board.
The decision could be considered a temporary setback to the pharma multinational.
For it cannot hope for any early decision on the patent plea. The Appellate Board's ruling too can be challenged it in the courts.
To add to Novartis' miseries the technical member of the new appellate court will be none other than Chandrasekaran, former Controller General of the Indian Patent Office, who had rejected its application for Glivec patent. A spokesperson of the Novartis has already expressed concern over Chandrasekaran's appointment.
The Madras High Court has already reserved its orders on the main petition by the Novartis challenging the constitutional validity of the Section 3(d) of the Patents (Amendment) Act.
Novartis contends the amendment contravenes the trade-related intellectual property rights (TRIPS) and also Article 14 of the Indian Constitution, which ensures equality before the law.
The section 3(d) of India's 2005 Patent Amendment Act interprets the trade-related intellectual property rights (TRIPS) treaty. It prohibits patents for a new form of a known substance unless that new form has considerably better efficacy.
Novartis's Glivec was a new form of an older molecule that it first patented in 1993. The enhancement in efficacy over the old form was not large enough to warrant a patent, the Patent Controller of India held in January last year.
The company then approached Madras High Court as the Controller's office is situated in Chennai. It wanted rejection of patent application set aside. That appeal goes before the appellate board set up by the government of India for the purpose.
But orders on the Novartis' challenge of the amendment to the patents law have been reserved. They could be delivered in a month or so from now.
And if a company like the Novartis gets its step in the door, asserting its right to patent even minor modifications of existing formulations, drug prices could go through the roof.
No firm then can manufacture generic drugs, which are less expensive. As patents near expiration, manufacturers apply for permission to sell generic versions. Because those manufacturers don't have the same development costs, they can sell their product at substantial discounts. Also, once generic drugs are approved, there is greater competition, which keeps the price down. Today, almost half of all prescriptions are filled with generic drugs. Generic variations are introduced in colors, flavors, and certain other inactive ingredients.
To cite a specific example of the benefits of generic versions, the cost of patented HIV/AIDS drugs is huge whereas the generic is very cheap and affordable. Hence activists the world have raised serious concerns over the Novartis case in the Madras High Court.
The company has patented Glivec in nearly 40 countries worldwide and says it wants to ensure that it will get adequate patent protection for any drugs it plans to offer in India in the future. 'For a research-based organisation like Novartis, patents are non-negotiable, said a spokesperson for Novartis. 'This is the core of our business model and we cannot work in markets where there aren't effective patent systems. It's not about stopping generics. We are a major generics manufacturer.'
The stakes are high, say activists. 'Should Novartis succeed in its challenge, it will mark the first time that the demands of a private multinational corporation have overridden a sovereign country's right to protect the health of its people,' said Chan Park of the Lawyers' Collective HIV/AIDS Unit in New Delhi, which has campaigned against the case.