Of Evergreening and Efficacy: the Glivec Patent Case

An important case  was decided this month that may have a significant impact on access to medicines for patients in developing countries. India'€™s high court rejected an appeal by the pharmaceutical company Novartis to grant a patent for its anti-cancer drug Glivec.
In the aftermath of this case, it is more likely other countries will follow India's lead.


 Of Evergreening and Efficacy: the Glivec Patent Case


by Ryan Abbott*

   Associate Professor of  Law at Southwestern Law School, Los Angeles


An important case [1]  was decided this month that may have a significant impact on access to medicines for patients in developing countries. India’€™s high court rejected an appeal by the pharmaceutical company Novartis to grant a patent for its anti-cancer drug Glivec.

Judging by recent public comments, this will be a landmark case. On the Novartis website [2], where the company is hosting an impressive array of resources devoted to the Glivec patent case, it states that this “€œdecision discourages innovative drug discovery essential to advancing medical science for patients.”€ Eric Althoff, a Novartis spokesman said, if “€œinnovation is rewarded, there is a clear business case to move forward. If it isn’€™t rewarded and protected, there isn’€™t.”€ On the opposite side of the spectrum, Indian Trade Minister Anand Sharma called the ruling “€œa historic judgment”€ that reaffirmed the position of Indian law requiring substantive innovation for patent protection. The Supreme Court itself noted that the “€œdebate took place within a very broad framework. The Court was urged to strike a balance between the need to promote research and development in science and technology and to keep private monopoly (called an ‘€˜aberration’€™ under our constitutional scheme) at a minimum.”€

Despite the controversy, this case won’€™t necessarily have a wide ranging impact. It involved some unusual elements, which require historical background in India’€™s patent system to understand.

At the time of India’€™s independence in 1947, the country’€™s patent regime permitted patents for pharmaceutical products. However, there was a sentiment that pharmaceutical product patents catered to multinational corporations (MNCs) at the expense of domestic companies. For example, one study found that only 10 percent of Indian patents were held by Indians or Indian companies. As a result, a series of amendments to India’€™s Patent Act gradually eroded patent protections for pharmaceutical products. This culminated in the passage of a new patents act which expressly excluded product patents for medicines (the Patents Act, 1970, which came into force in 1972 and replaced the Patents and Designs Act, 1911).

The rise of the domestic Indian pharmaceutical industry has been partially attributed to this scaling back of patent protection. In 1970, MNCs enjoyed a 68% market share of the Indian pharmaceutical market. In 2003, Indian companies collectively commanded a 77% market share. Moreover, this has occurred in a growing market. The domestic Indian pharmaceutical market has been projected to reach $49-€“74 billion by 2020. India is already the largest exporter of generic drugs in the world, and as the Supreme Court noted, India has become the “€œpharmacy of the world.”€ For instance, it supplies over 80% of HIV/AIDS medicines for the 8 million HIV-positive patents in low- and middle-income countries. India does not only export to the developing world; India’€™s largest export recipient is the United States.

India’€™s patent regime was profoundly impacted by the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) which came into force on January 1, 1995. TRIPS is a comprehensive multilateral agreement that establishes minimum levels of intellectual property protection for all members of the World Trade Organization (WTO), including India. It requires that patent protection be made available for pharmaceutical products.

India, along with a number of other developing nations, was afforded a transition period to amend its patent system to comply with the requirements of TRIPS. Specifically, India was permitted to delay application of TRIPS provisions for five years until 2000, with an additional five year delay permitted for pharmaceutical product patents. However, Article 70.8 of the TRIPS Agreement required India to adopt an arrangement called “€œthe mailbox procedure.”€ This allowed applicants to file product patents that would lie dormant until the expiration of the transition period. Under this system, a product patent could not be granted on a pharmaceutical product filed before 1995, while patents could be granted for applications filed from 1995-€“2005 that would become effective after 2005.

That is one reason why the Glivec product case is unusual; Glivec was invented during a transitional time for the Indian patent system. Novartis filed an initial patent application in the U.S. for the drug “€œimatinib”€ (in free base form) in 1992. If that drug would have been invented today, it would have enjoyed a twenty-year period of patent-based market exclusivity in India.

Cases involving the transition period are going to be less relevant in the future. Most of the countries that have domestic production capability are now committed to TRIPS, or even TRIPS-plus, patent protection. While the 2001 WTO Ministerial Declaration on the TRIPS Agreement and Public Health adopted in Doha (the Doha Declaration) extended the period for compliance with pharmaceutical provisions to 2016, this only applies to least developed countries (LDCs). LDCs generally lack significant pharmaceutical manufacturing capability.

The primary legal issue in the case, however, went beyond issues specific to the transition period and involved challenges to Section 3(d) of India’€™s patent act, which stipulates that “€œthe mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance”€ is not eligible for patent protection. It is designed to prevent evergreening, a term used to label practices where a small change is made to an existing product and claimed as a new invention. When Section 3(d) was enacted in 2005, it was unique to India – €”there was no analogous provision in any other country.

Even if imatinib had been patented in India in 1992, that patent would have expired last year. (In point of fact, the U.S. patent did not expire last year – €”the patent term was extended for 586 days to “€œcompensate”€ for the delay necessitated due to Food and Drug Administration [FDA] review). That is why, in an effort to extend patent protection for Glivec, Novartis filed a second patent application in 1997. The second application was for a specific variation (the beta crystalline form [it can also exist in alpha form or in amorphous form]) of the salt of imatinib (imatinib mesylate). That patent is due to expire in the U.S. in 2019 (it also received an extension). In 2001, the U.S. Food and Drug Administration approved “€œimatinib mesylate”€ for marketing. While the active ingredient of Glivec is imatinib in its free base form, capsules contain imatinib mesylate because it has percent greater bioavailability.

In the Glivec patent case, one of the central questions before the court was whether the “€œnew”€ drug form qualified for a patent under Section 3(d). The court ruled that it did not.

To arrive at this conclusion, one of the more interesting issues the court had to resolve was how to define efficacy. It elected to define efficacy as therapeutic efficacy, but even within that definition the court was presented with multiple visions.

On the one hand, efficacy could be thought of as the capacity of a drug to produce an effect. That is, the property of a drug that causes a stimulus at a receptor site, as distinct from characteristics such as affinity, potency, and bioavailability. A broader conception of efficacy would include considerations such as improved safety or reduced toxicity.

Theoretically, I suspect a more holistic approach is justified. At the extreme end of the spectrum, a new drug could cure multiple sclerosis yet be so toxic it kills more patients than it helps. If a new form of the drug is discovered that is not better at treating multiple sclerosis but that doesn’€™t cause any side effects, it would be hard to argue that it isn’€™t a leap forward in efficacy.

The broader question is where in the development chain someone should be entitled to a patent. Not too long ago, the U.S. Patent and Trademark Office required significant evidence of clinical efficacy for pharmaceutical product patents to comply with the utility requirement. In re Brana (Fed. Cir. 1995) changed that, when the Court of Appeals for the Federal Circuit decided it would deter innovation to require FDA approval or even Phase II testing to find a compound useful within the meaning of the patent law. Amgen Inc. v. Hoechst Marion Roussel, Inc (Fed Cir 2006) went further and held that therapeutic utility is not dependent on a product having an effect in a living being, such as curing disease.

Now researchers try to patent compounds at the earliest available opportunity, a trend which is only going to intensify in the U.S. with last month’€™s transition from a first-to-invent system to a first-to-file system under the America Invents Act. For good reasons the pharmaceutical industry is involved in a competitive race, but there is no great philosophical reason that the finish line for patentability should be closer to the moment a new compound is generated. The proposition that a new form of a drug should be more effective to get a patent isn’€™t that radical.  It would mean researchers would spend less time racing to invent compounds, and more time discovering what compounds do.

On a doctrinal level, the Indian Court’s decision is consistent with U.S. Supreme Court decisions that set limits on patentability and intellectual property protection. For example, just last month in Kirtsaeng v. John Wiley & Sons the U.S. Supreme Court ruled that the first-sale doctrine applies to lawfully made works manufactured abroad and imported into the U.S.

Novartis had at one point tried to argue that Section 3(d) was unconstitutional under the Indian constitution and non-compliant with TRIPS, but those arguments were rejected by the High Court at Madras in 2007. Novartis did not appeal those decisions. The High Court rejected the TRIPS claim because in India private plaintiffs may not challenge a national law based on its compatibility with an international agreement. However, the court also referred to the Doha Declaration, which affirms that “€œthe TRIPS Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’€™ right to protect public health and, in particular, to promote access to medicines for all.” This means that WTO members can set their own standards for patent protection within the bounds of TRIPS. Section 3(d) establishes a higher standard for an inventive step, which means that drugs patentable in other countries won’€™t necessarily be patentable in India.

Narrowly then, in India, there are a number of pre-grant opposition cases currently being appealed by pharmaceutical companies. If the Supreme Court had weakened the interpretation of Section 3(d), it could have allowed denied applications to be granted on appeal. Aside from that, it’€™s possible that this decision will have limited impact given that it involves issues fairly specific to India.

Yet some other countries, such as Argentina and the Philippines, have already incorporated provisions similar to Section 3(d). As a consultant for Health Research for Action in 2009, I coauthored a report [3] recommending to Caribbean nations that they adopt provisions like Section 3(d). In the aftermath of this case, it is more likely other countries will follow India’€™s lead.

More importantly, India’€™s victory in this case may be a signal regarding changing political attitudes toward the demands of MNCs. Historically, MNCs have taken a hard line against “€œlax”€ patent protection for pharmaceutical products. Even as recently at 2006 and 2007, Thailand faced retaliation after issuing compulsory licenses for two on-patent HIV/AIDS drugs and an antiplatelet drug. Abbott, the maker of one of the HIV/AIDS drugs, subsequently withdrew all applications to register medicines in Thailand. The United States Trade Representative (USTR) then placed Thailand on the 301 Report’€™s Priority Watch List and threatened to terminate Thailand’€™s export privileges.

India is becoming increasingly assertive with regards to IP protections. Last year, India’€™s Patent Office issued its first compulsory license to a generics manufacturer for an on-patent medicine. The Indian company Natco is now licensed to produce and sell a generic version of the Bayer anti-cancer drug Nexavar. India also revoked Pfizer’€™s patent for its anti-cancer drug Sutent. Both companies are appealing.

These actions may portend a shift in North-South dynamics if the pharmaceutical industry fails to significantly change its model. Glivec and Nexavar can both cost $70,000 a year in India, where the average person makes $1,500 annually. Those economics are simply unworkable, even though Novartis and Bayer both provide free distribution programs for certain cancer patients.

Roy Waldron, the Chief Intellectual Property Counsel for Pfizer, stated [4] last month that, “€œIndia has taken steps that call into question the sustainability of foreign investment and the ability of American companies to compete fairly. In fact, the Global Intellectual Property Center’€™s International Intellectual Property Index [the GIPC is part of the U.S. Chamber of Commerce], ranked India dead last in terms of overall protection of intellectual property. Despite being a member of the World Trade Organization, and an important global trading partner, India has systematically failed to interpret and apply its intellectual property laws in a manner consistent with recognized global standards.”€ He concluded the U.S. government should signal such actions are not condoned, and that the U.S. should pursue a robust trade agenda. MNCs and developed countries such as the U.S. continue to push for higher levels of intellectual property protection in bilateral and regional free trade agreements, and in multinational agreements like the Trans-€Pacific Partnership Agreement (TPP).

Still, there is no way MNCs will make good on threats to withdraw innovative medicines from India. First, because with the possible exception of certain biological drugs, Indian generics companies could domestically produce just about any drug MNCs fail to introduce. Second, India’€™s pharmaceutical sector is booming; the domestic market is expected to experience double-digit growth this year, and it is among the top five pharmaceutical emerging markets. India’€™s pharmaceutical sector attracted foreign direct investments worth $4.9 billion in 2000-€“2011. It is unlikely that anyone’€™s business model will call for exiting that market on the basis of a legitimate patent law interpretation.



* Ryan Abbott, M.D., J.D., M.T.O.M., is Associate Professor of Law at Southwestern Law School. He has served as a consultant on health care financing and regulation, intellectual property, and public health for international organizations, academic institutions and private enterprises including the World Health Organization, World Intellectual Property Organization and University of California, Los Angeles. Professor Abbott has published widely on issues associated with health care law and intellectual property protection in legal, medical, and scientific peer-reviewed journals.

Professor Abbott is a licensed physician, attorney, and acupuncturist. He is a graduate of the University of California, San Diego School of Medicine and the Yale Law School, as well as a Summa Cum Laude graduate from Emperor’s College (MTOM) and a Summa Cum Laude graduate from University of California, Los Angeles (BS). Professor Abbott has been the recipient of numerous research fellowships, scholarships and awards, and has served as Principal Investigator of biomedical research studies at University of California. He is a registered patent attorney with the U.S. Patent and Trademark Office and a member of the California and New York State Bars.


[1] http://www.scribd.com/doc/133343411/Novartis-patent-Judgement

[2] http://www.novartis.com/newsroom/product-related-info-center/glivec.shtml

[3] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1909978

[4] http://waysandmeans.house.gov/uploadedfiles/pfizer_testimony31313.pdf