Insider Analysis: The Glivec Patent Saga – Effectuating “Efficacious” Patent Norms In India

By: Shamnad Basheer

Indian patent law recently landed itself in the eye of a “TRIPS” storm on account of the rejection of a patent application covering Novartis’s famed anticancer drug, Glivec (imatinib mesylate). The rejection stemmed, inter-alia from a unique section in the Indian patent regime (section 3(d)) that prohibits the patenting of new forms of existing pharmaceutical substances that do not demonstrate significantly enhanced “efficacy.”

Not only did Novartis appeal the patent office decision, but in a rather controversial move, it challenged the TRIPS compatibility and constitutionality of section 3(d). The Madras High Court recently ruled that section 3(d) was constitutional.[1] More importantly, it also stated that it did not have jurisdiction to rule on the TRIPS issue.

It is therefore an opportune moment to examine section 3(d) and more importantly, the broader policy issues surrounding pharmaceutical innovation and patents in India. A lot would depend upon how section 3(d) is interpreted. This article argues that given India’s status as a technologically proficient developing country, section 3(d) ought to be interpreted in a manner that gives due consideration to the innovation incentives of pharmaceutical majors in India such as Ranbaxy and Dr Reddy’s.

SECTION 3(D): CREATING MORE “EFFICACIOUS” NORMS

Section 3(d) has no statutory parallel anywhere else in the world. It is interesting to note in this regard that it is derived, in part, from a European drug regulatory directive. (Article 10(2)(b) of Directive 2004/27/EC).

As one can appreciate, blindly transposing a provision that operates within the context of a drug regulatory regime to a patent regime poses problems. For one, it makes it more likely that the term ‘efficacy’ would be construed in a drug-regulatory sense – consequently, the requirement would be a difficult one for most patent applicants to satisfy.

Pharmaceutical companies generally file patent applications at the initial stage of discovery of a drug; it is only much later in the development process that clinical studies are conducted to gather information pertaining to the therapeutic efficacy of the drug. Requiring information on ‘efficacy’ at the stage of filing a patent application is therefore a very onerous requirement.

This is not to say that the requirement should be interpreted in a very liberal manner, wherein any kind of trivial improvement merits patent protection. This would only exacerbate the problem of ever-greening — the very problem sought to be eviscerated by section 3(d). Therefore the standard ought to be somewhere in between — and to this end, the government needs to evolve guidelines that capture such middle ground. My attempt in this article is to highlight some issues that ought to be borne in mind whilst evolving such guidelines.

The ambit of section 3(d) would depend on how the terms “efficacy” and “significant difference in property with regard to efficacy” are interpreted.

The Madras High Court judgment relied on a medical dictionary definition to hold that the term "efficacy" in section 3(d) meant "therapeutic" efficacy. Under such a definition, the kind of derivatives that qualify for protection are likely to be severely limited. For instance, increased "bio-availability" (the “advantage” that Novartis claims for its beta crystalline form) may not count as "therapeutic" efficacy.

The court makes this clear by stating that an increase in the potency of the drug does not amount to an increase in efficacy. However, Novartis could easily challenge the court’s assumption that section 3(d) is limited to drugs and that therefore “efficacy” ought to be construed as “therapeutic efficacy”. A plain reading of section 3(d) would make clear that the section also applies to other “chemicals” such as agro-chemicals. A pesticide or fertilizer cannot be tested for patentability on the basis of whether it enhances a “therapeutic” effect on the human body!

If Novartis does not challenge this portion of the Madras High Court judgment, and if the IPAB follows this dictum (as to whether the IPAB is bound by this ruling of the Madras High Court is a moot issue), then Novartis effectively loses the case. It may as well withdraw its appeal from the IPAB.[2]

Even otherwise, ought section 3(d) to be limited to therapeutic efficacy? A narrow construction of the term “efficacy” would also exclude from patentability salt forms that provide more stability and enable the drug to remain on the shelf for longer or to be transported to various parts of rural India without refrigeration. If the intention behind section 3(d) is to provide incentives to new forms of pharmaceutical substances that come with genuine advantages, then ought not drugs with significant increased bio-availability and stability to qualify?

A high patent threshold will harm the interests of domestic producers such as Ranbaxy and Dr Reddy’s, who are now extensively involved with incremental innovation, such as new heat stable forms, drug delivery systems, extended-release capsules, etc. Illustratively, under a restrictive efficacy standard, Ranbaxy’s incremental innovation that enabled Bayer’s famed anti-anthrax drug, Cipro, to be taken just once a day, would not gain patent protection.[3] 

It is important to note in this context that India is a technologically proficient developing country. And given this status, it will be foolish to adopt an excessively restrictive efficacy standard. In other words, if the intention is to incentivize incremental invention, then India ought to encourage all kinds of incremental inventions and not just inventions limited to “therapeutic efficacy.”

In this regard, it is important to strike a distinction between the grant of a patent and the regulation of its ‘use.’ The ex-post effects of a patent in the form of high prices, etc., can be addressed via measures such as price control or compulsory licensing.[4] However, it is unwise to peg patentability criteria at arbitrary levels to achieve these purposes, particularly when such an action will adversely impact the innovation incentives of Indian pharmaceutical companies. Given the recent opportunities for R&D collaboration with multinational pharmaceutical companies, the levels of patent protection ought to be at a fairly reasonable level to induce such investment.

Therefore, the term efficacy should not be restricted to only therapeutic efficacy, narrowly defined. Rather, it should include clinical efficacy (such as increased bio-availability) as well as other advantages, such as heat stability.

We now come to an even more pressing issue: What level of “efficacy” ought to suffice to make a drug patentable? The Explanation to section 3(d) stipulates that there should be a “significant difference in properties with regard to efficacy.” Will a 10 percent increase in efficacy amount to a “significant difference in property?” Or will it have to be higher?

This is a complex issue for which there is no ready answer. A quantitative increase of 5 percent in non-hygroscopicity may cause one substance to improve so much that it can finally be converted to a drug form, whereas with another drug, it would hardly amount to much. Perhaps this is something that should be left to be decided on a case-by-case basis. Perhaps, after a substantial body of case law has been generated, the government can evolve certain rebuttable presumptions – for example, only an increase in 30 percent bioavailability would amount to a significant increase in efficacy.

CONCLUSION

The term “efficacy” is a very useful policy lever and India ought to ply with it very carefully. This becomes ever more pertinent now that there are more cases at the patent office that hinge on section 3(d), and several countries that are seeking to emulate it.

As a first step, the government should begin engaging with patent experts and other stakeholders to determine the optimal level of protection under section 3(d).

Shamnad Basheer is a research associate at the Oxford Intellectual Property Research Center (OIPRC). Until recently, he was the Frank H. Marks Visiting Associate Professor of IP Law at the George Washington University Law School in Washington, D.C.

ENDNOTES

1.  Novartis AG & Anr. v. Union of India & Othrs. (Mad HC) 2007.
2.  Shamnad Basheer, “Why Novartis Needs to Challenge the Madras High Court Judgment”, SpicyIP (21 October 2007).
3.  The invention, sold as Cipro-OD, enabled a patient to take the medicine just once a day (OD) and was successfully licensed to Bayer AG.
4.  Shamnad Basheer, India’s New Patent Regime: Aiding Access or Abetting Genericide 8 International Journal of Biotechnology 5 (2006).