Indian Patent Law: Undermining Innovation or Deterring Evergreening?

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The decision in Novartis v. Union of India & Others provides an important model for other countries around the world.

In theory, patents promote innovation. It can cost hundreds of millions of dollars to develop a new drug. Free copying could undermine the profitability of companies that engage in research and development. 

However, patents cause especially acute problems for access to medicines in developing countries — not only because of low incomes but also because insurance and price-control systems are often absent or inadequate.

One of the first patents to be considered under the Indian Patent Act was related to the blockbuster cancer drug Gleevec (imatinib mesylate). Gleevec is a lifesaving drug used in treating chronic myeloid leukemia. As is the norm, the originating company, Novartis, sought several patents on the new therapy in the United States. In India, because the new patent law had limited retroactive reach, Novartis could file only for a single follow-on patent, covering the beta-crystalline form of the active ingredient.

The Court concluded that the patent ran afoul of Section 3(d) and adopted a strict interpretation of the provision, whereby new forms of known drugs cannot be patented in India unless the new form yields therapeutic benefits. The Novartis patent failed to meet this standard.

The immediate result of the case is that imatinib can be sold generically in India for a fraction of the price of the Novartis version. More important, the decision means that many drug patents that are granted in the United States should be denied in India.

This brings up the question: What if Section 3(d) becomes a model for other developing countries, and such countries become, as some have predicted, a much larger share of the global pharmaceutical market? Read more
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