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JAMA Forum Archive, 2012-2019: Health policy commentary from leaders in the field
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The Clash Between Industry and Civil Society Over Generic Drugs

On April 1, India’s Supreme Court ruled against drug company Novartis regarding its claim for a patent on the lucrative and widely used cancer drug imatinib (marketed by Novartis as Gleevec in the United States and as Glivec elsewhere). To many, this high-profile 7-year legal battle, , epitomized a vexed relationship between health advocates and the pharmaceutical industry.

Civil society believes that affordable access to essential medicines is an ethical imperative, even a human right. But industry sees the intellectual property system as a vital incentive for innovation. Both positions are undoubtedly true, but they often come into tension. Companies point to the high costs of research and development in bringing a lifesaving or life-extending drug to market. But this view collides with human morality and personal tragedy when a patient cannot access a life-sustaining medication.

Lawrence Gostin, JD

In denying Novartis’ claim, the Court affirmed that India’s standard for patentability exceeds that of the United States or the European Union. In the United States, companies can often extend the patent life of a drug simply by tweaking its formula or dosage (a practice known as “evergreening”). But the Court ruled that India’s patent laws require more: it is not enough that a new compound is different; the modified drug must also improve patient treatment.

The Court’s reasoning was narrow. To comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) that is administered by the World Trade Organization, India began granting pharmaceutical patents in 2005, but only for drugs created after 1995. Novartis patented Gleevec’s original chemical form in 1993 and subsequently filed patents on modified forms of this compound. But the Court decided that Novartis did not prove that Gleevec offered “enhanced or superior efficacy” as required under India’s 2005 patent law. Gleevec can cost $70 000 annually in the United States, while Indian generic versions cost about $2500 a year. After the ruling, Novartis argued strenuously in a letter to the New York Times that Gleevec is not an instance of evergreening, insisting that its first patented compound was not viable as a medicine and that Gleevec is a transformational therapy.

What is most important about this case is that India now has a strong legal position against “me-too” drugs (making small changes to a drug to extend a patent) and that many other developing countries could now adopt a similar standard. Despite the Court’s narrow reasoning, the Novartis decision could have far-reaching implications. Multinational pharmaceutical companies are seeking strong patent protections in emerging economies, particularly given declining revenues for medications in Europe and North America. According to the New York Times, India is the world’s leading supplier of generic drugs, exporting $10 billion of generic medicines annually; together with China, it produces more than 80% of the active ingredients for all drugs used in the United States. A ruling in Novartis’ favor could have altered the global landscape in regard to access to medicines.

However, by deciding in India’s favor, the Court’s decision could embolden other emerging economies (such as Argentina, Brazil, Thailand, and the Philippines) as they debate domestic intellectual property regulation and its compatibility with their obligations under TRIPS. At the same time, developed countries are seeking stricter intellectual property protection in bilateral and regional trade agreements, such as the Trans-Pacific Partnership, which the United States is currently negotiating. The Indian Supreme Court’s decision will place pressure on richer countries to insist on stronger patent protection in future trade negotiations.

The clash between the right to health and protection of intellectual property has thwarted “north/south” relationships between developed and developing countries for more than a decade, culminating in the suspension of the Doha Round trade negotiations in 2008—with each side blaming the other. It may be that the tensions will never subside without a different formula for protecting intellectual property rights while allowing access to medicines. Proposals for tiered pricing of drugs depending on a country’s level of development would ease the tension.

Others have called for a Health Impact Fund, financed by governments, which would reward companies that register with the fund for medicines that save the most disability-adjusted life-years. The World Health Organization has been negotiating a research and development treaty to offset some of the cost of pharmaceutical research, but it is unlikely to go forward.

What seems entirely clear is that the vexing problem of access to medicines will continue to drive a wedge between developed and developing countries unless the international community finds an innovative solution. It is in all parties’ interests to seek common ground, with perhaps the most achievable progress being a negotiated agreement on tiered pricing.

About the author: Lawrence O. Gostin, JD, is University Professor and Faculty Director, O’Neill Institute for National and Global Health Law, Georgetown University Law Center, and Director of the World Health Organization Collaborating Center on Public Health Law and Human Rights.
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