The Glivec Case and Patent Wars
For the past two days, whenever I could scrape together a little free time, I have been pouring over obscure little books on intellectual property rights and patent violations which I, uh borrowed, from my dad’s shelf of law books. The reason being the news in the papers about the Glivec patent being rejected by the Supreme Court and Novartis pulling out its R&D center from India. There has been a lot of debate and fury over the issue- with lawyers from both sides arguing threadbare about whether the section 3-D of the patent act was applied correctly or not. The entire media coverage has dealt with the issue only in its legal sense, splitting hairs on legalese, rather than taking a holistic view on what it means for the society in general. And thats the reason I am writing this post.
Glivec or Imantinib mesylate is a drug which acts on cancer cells. As we know cancer cells are cells which grow at an abnormal rate. For any cell to grow, it requires certain substances called growth factors to boost its growth. Glivec acts by stopping these growth factors- epidermal growth factor and platelet derived growth factor (EPF & PDGF) from helping the cancer cell grow. The cancer cell starved of these growth factors stops growing and dies. That’s how this drug works. To use a simple example, it’s like using a fire extinguisher on a burning fire where the wet foam cuts off the flame from surrounding oxygen in the air and the fire dies without getting the oxygen it needs to continue burning.
This drug was first introduced more than 20 years ago and the company got a patent for it in the USA. As per international patent rules (WIPO or the world intellectual property organizations patent law) the exclusive right to manufacture the drug by Novartis alone expires at the end of the 20 years after which time other companies too can make the same drug at cheaper prices. But the company Novartis tried to be too clever by half (or their lawyers did, which is the same thing in the end). They changed the composition of the drug by altering it slightly from alpha form to beta form and tried to file a new patent for 20 more years claiming this is a new drug as it has new properties. And this was where the controversy arose.
As per Indian patent law- Sec 2- a patent is given for anything which is
But the beta form of Glivec failed both tests- it is neither novel nor newly useful because the same drug has been there for twenty years and there is no improvement in how it works
Which brings us to the controversial section 3-D which clearly specifies what all can be patented and what cannot – for example you cannot patent plants or animals or human beings as per this section. When it comes to food and medicines this clause clearly states that no new forms of the same drug can be patented and neither can new use for a new disease be claimed for a patent. Let’s see this with an example – Minoxidil was a drug which was first invented for treating High BP (hypertension). But it did not reduce the BP much -so was considered a failure drug. But the patients who took minoxidil for high BP also said that they had a new experience- their hair fall had stopped and new hair was growing in a previously hair loss area. So the company smartly changed Minoxidil from a BP drug into a Hair growth drug and launched it in the market as a cure for hair fall. Minoxidil is now the no.1 drug for hairfall in the market and the company has made profits of billions from what was once thought a failed drug. But the original patent is still for the high BP cure and not for the newly discovered side effect of hair growth.
Let’s see another example. A few years ago a company invented a drug called Sildenafil for heart attack patients in whom the drug was supposed to increase blood supply (and oxygen) to the heart by acting on the nitrous oxide receptors of blood vessels. There was nothing new about this drug for many other heart attack drugs in the market have the same effect, but what made the difference in this drug was that the increase in blood flow to the heart also resulted in increase in blood flow to other parts of the body- especially to the penis, resulting in bigger and harder erections. And Viagra was born. The company stopped selling it as a heart attack drug and started selling it as a drug for erection problems and the rest is history.
When Viagra was originally invented it was made in the form of Sildenafil Citrate and a patent was got for it. After 20 years with the expiration of the original patent, the company changed the formula to Sildenafil Nitrate and got a new patent in the USA claiming that this worked better than the original form of citrate. Novartis tried to use the same technique for its cancer drug Imantinib in India. But the Indian Patent laws are different than the US laws and as per Section 3-D, no new form of the same drug will be given a patent under the Indian Laws. Even though the company tried to confuse the issue claiming that the beta form was absorbed better than the original drug, the judges interpreted the section correctly to reject this claim by saying that under Indian Law the good of the poor people is more important than any patent rights which lead to monopoly profits. And hence Novartis not only lost its patent claim, it also lost face and gained a lot of negative publicity for being too greedy and charging too much for the drug from cancer patients who were dying without it. And the company immediately responded by announcing it would pull out its R & D division from India because Indians don’t respect research and innovations.
Like every researcher who works on the hope of making a difference to scientific knowledge someday; I am a supporter of patent rights and believe it helps support innovation and research. Historically, there have been gentlemen researchers like Alexander Fleming of the penicillin discovery and Jonas Salk of the polio vaccine discovery who didn’t believe in patenting their rights but gave it all away for the good of mankind. But those days are long past us. The days of gentlemen researchers working in a lonely little laboratory in the basement of their house and finding out life altering stuff is long dead.
Research nowadays is purely done based on computer simulations. You need access to supercomputer and programming power, more power than you can get individually if you want to find out anything now. Most research labs nowadays have not only gene sequencers and latest laser devices but also racks and racks of computing power and storage servers. Without such massive memory banks and computing power it’s impossible to do research nowadays and hence research is dependent on big bucks, which is usually provided by big pharma companies and hence they need patents to make back the money they pay out as incentives to discovery.
I see nothing wrong with the idea of the company which funded the research making money out of research as under current patent laws- they have a monopoly over the product for a 20 year period; that is no one else can commercially manufacture or sell that product for 20 years except the original founder and parent company. But sometimes the pharma companies do not stop with the idea of getting a legitimate profit for their investment. In their greed to maximize their profits they overreach themselves inviting the inevitable backlash. Which is exactly what happened in this case too.
The price of the drug Glivec in the open market, as manufactured by other companies which don’t have a patent on it – is from eight thousand to ten thousand rupees for one month’s dose. The price of the same drug as manufactured by its original inventor and patent holder Novartis is one lakh and twenty thousand per month. That is an approximate profit level of over hundred times the manufacturing price. And this is the only reason that the company Novartis is now facing such a backlash.
Check out the math yourself: (for one months supply only)
Glivec by others = 10,000
Glivec by Novartis = 1,20, 000
Profit Margin – 1, 10,000 or 110%
Profit is good; the economy is dependent on it. Companies exist on profits to their shareholders. But profiteering is bad. Bad for consumers, bad for the economy and bad for the companies themselves in retrospect, for nowadays image alone matters and Novartis has by its excessive greed in pricing this drug has lost the public relations war. When other companies can make and sell the same drug at a fraction of the same price, then why can’t the original patent company do so is the question asked and rightly.
And in this heated debate about the greed of Novartis the fact that the other companies have no right to manufacture the drug which was invented by novartis is totally lost. If you price yourself out of the market naturally piracy will arise to fill the gap. Like Apple Co. first discovered to its cost with the i-phone which it priced at an astronomical rate for its many innovations and simultaneously Chinese companies launched cheap i-phone rip-offs with the same features but a fraction of the price. Greed is good said Gordon Gecko in Wall Street the movie, but the same Gordon goes to jail for his greed at the end of the movie.
Well, if that’s the story of the Greed of MNC’s, lets come to the story of the greed of the Indian pharma companies next. Most of these companies utilize a legalized fraud in the name of India’s poorest of the poor to justify their profit margins got by exporting drugs which do not belong to them. As I said, Novartis with its unbelievable profit margin of 110% has lost out on its legitimate complaint against legal piracy of the Indian kind where Indian pharma companies which have never heard of the word R&D (name any drug invented by any Indian company?) exist by manufacturing in bulk (using sweat shops of cheap labor) the most innovative and bestseller drugs for which other international companies hold the patent and not only sell them cheap inside India but also export them in bulk to other countries worldwide thereby destroying the patent rights of the original inventors.
This legal stealing of others patent property is justifiable when it is for the good of the poor people of India (as per the provisions of the patent law- for the common good/public good) but is it also justifiable when these same companies which make these drugs in the name of the Indian poor export it to Europe and America as bulk generics? There is a gray area in the law on this issue. But if we can be sure of one thing it is this, if suppose a new law was passed tomorrow that every Indian pharma company should manufacture only their own inventions, the entire pharmaceutic industry of India would shut down their shops and disappear overnight. My sincerest wish is that the Indian government should pass a law which makes the invention of a new drug by every single pharma company mandatory – that will boost investment in Indian R&D like nothing else will and we will finally shed the tag of being just copy-cat imitators.
In the final analysis we see the whole issue is a mix of greed, corporate shenanigans and gaming the system by utilizing lax laws. No one comes out clean whether it’s the pharma companies themselves or the governmental regulations. As such this is exactly like how it should be- there are no clear cut winners or losers and everything is nuanced. Just like life itself.
P.S. Credit goes to Outlook.com which has the entire original Supreme Court judgment on its website (the first time I ever read a judgment). Do read it if you have the time, it makes a fascinating read.