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'3(d)' Effect: The Novartis-Glivec Case

The appeal of the multinational drug major Novartis in the Supreme Court against denial of patent protection to its anti-cancer drug Glivec will decide whether Indian courts uphold a "precautionary principle" with regard to the right to health and life or the demands of intellectual property rights must take priority. Either way, this case will have major ramifications for public health and the ability of sovereign countries to enact laws to protect their citizens.


‘3(d)’ Effect: The Novartis-Glivec Case

Rajshree Chandra

the Cancer Patients Aid Association (CPAA) and some other non-governmental organisations (NGOs), which provided this drug to cancer patients for treatment, had to withdraw their medical support. The CPAA even went to the Supreme Court against granting of EMR to Novartis.1

The appeal of the multinational drug major Novartis in the Supreme Court against denial of patent protection to its anti-cancer drug Glivec will decide whether Indian courts uphold a “precautionary principle” with regard to the right to health and life or the demands of intellectual property rights must take priority. Either way, this case will have major ramifications for public health and the ability of sovereign countries to enact laws to protect their citizens.

Rajshree Chandra (rajshreechandra@yahoo. com) teaches political science at Janki Devi Memorial College, University of Delhi.

Economic & Political Weekly

september 10, 2011

he Novartis patent claim for its anticancer drug, Glivec enters round four with the Swiss pharmaceutical giant appealing to the Supreme Court (Appeal No 20539-549 of 2009) against the decision of the Intellectual Property Appellate Board (IPAB) to deny its patent claim over Glivec. The case has been contentious to say the least and Novartis has fought a long and hard legal battle which began in 2005 when its patent application for Glivec came up for review in the Chennai Patent Office.

The Glivec Case

Glivec (imatinib mesylate) is crucial in prolonging the life of patients suffering from chronic myeloid leukemia (CML). Since imatinib mesylate controls the cellular action that allows the cancer to grow but does not cure the disease, patients must take it for the rest of their lives. While it is produced and marketed internationally by Novartis, various Indian g eneric producers like Cipla, Ranbaxy, Natco and Hetero sell generic versions. Novartis sells Glivec at approximately Rs 12 lakh ($26,000) per patient per year. Generic versions of Glivec in the I ndian market are priced at approximately Rs 97,000 ($2,100) per patient per year. Novartis therefore charges 12 times more for the same drug.

Novartis’ battle to secure a patent for Glivec has been long and unprecedented in patent history. In 2003, Novartis secured exclusive marketing rights (EMR) for Glivec under the 1994 Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement of the General Agreement on Tariffs and Trade, forcing Indian generic companies to withdraw the production and sale of generic versions of the drug for the d omestic market and export to other developing countries. With the consequent massive price increase of this drug’s generic versions,

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Novartis’ patent application on Glivec came up for examination in 2005. Armed with the provisions of Section 3(d) of the Indian Patent (Amendment) Act, 2005, pre-grant opposition was filed by Natco Pharmaceuticals, Alternative Law Forum (ALF) and Lawyers Collective on behalf of the CPAA, in September 2005 against N ovartis’ patent application, claiming that it was only a modification of an already existing drug and that it was violative of the health rights of the CML patients (Writ petition No 24759 of 2006 in the High Court of Madras: 12).

These considerations became the background for the rejection of Novartis’ patent claim by the Chennai Patent Office (in 2006), the Madras High Court (in 2007) and the IPAB (in 2009) as Novartis relentlessly persisted. The two central and shared grounds for these three rejections were:

  • (a) That the patent claim was only for a tweaked version of a pre-1995 imatinib mesylate (for which there are no patent obligations as TRIPS itself came into force in 1995). The drug did not meet the criterion of inventiveness as laid out in Section 3(d) of the Indian Patent Act.
  • (b) Because the Novartis drug was priced beyond the reach of the ordinary citizen (Rs 1,00,000/month), the non-availability and non-affordability of any form of i matinib mesylate to CML patients was v iolative of their right to life under Article 21 of the Constitution.
  • Many apex courts all over the world read the right to health as a derivative of the right to life itself, especially in those countries where there is no separate constitutional right to health. Thus, a need was expressed to forestall patent claims for drugs which are marginally improved or “evergreened” so that the cheaper generics remained available in the market. The intellectual property offices and the court both expressed commitment to the fact that “the laws of this country have a


    c onstitutional duty to provide good healthcare to its citizens by giving them easy access to life saving drugs”.

    What enabled these rulings is a unique but contested piece of legislation – Section 3(d) of the Indian Patent (Amendment) Act, 2005. The Act provided for patent protection for pharmaceutical inventions, instating the concept of “product patents” in this category for the first time. International criteria of patentability (novelty, non-obviousness, utility and adequate disclosure) were retained, but the Act had included restrictions as to what would be regarded as patentable inventions by adding clause (d) to Section 3.

    The Efficacy Standard

    Section 3(d) of the Act stipulates that a new form of a known substance is excluded from patent coverage, if it does not show significantly enhanced efficacy compared to the known substance. The enhancement in efficacy was further qualified in the explanation to the subsection.

    Explanation to Section 3(d):

    Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.

    Thus, the dividing line between being an eligible subject matter to be considered for grant of a patent and not being patent eligible became its efficacy. Section 3(d) therefore makes it clear that a number of technical creations are not inventions, unless they present a significant increase in efficacy. This statute of India is therefore relying on utility to transform non-patentable i nventions into patentable ones. The critical part here is that the novelty is derived from the use, not the product (Colston and Middleton 2005: 163-64).

    Besides serving as a technical requirement delineating grounds for patentability of pharmaceutical drugs, Section 3(d) also functions as an important public health safeguard. The objective of the 3(d) patentability criteria is to prevent “evergreening” and tweaking of old formulations to e xtend patent claims. These exceptions are signi ficant, for they seek to make patent claims for new drugs conditional on the n ovelty and the efficacy of the new innovation, thereby ensuring that patents for drugs are not claimed for mere incremental improvements over existing drugs. The term efficacy is being construed in a “drug regulatory” sense. In effect 3(d) delimits claims of patentability thereby ensuring the continued supplies of generics at cheaper prices.

    Article 30 of TRIPS states that members may provide limited exceptions to the exclusive rights conferred by a patent. Section 3(d) can be viewed as providing limited exceptions to pharmaceutical patents. The Doha Declaration, 2001 too affirmed that the TRIPS agreement can and should be interpreted and implemented in a manner supportive of World Trade Organisation (WTO) members’ rights to protect public health and, in particular, to promote a ccess to medicines for all.

    A second argument, and the one that needs to be underscored on the eve of the Supreme Court revaluation of the case, however, would seek to locate the terms of the debate outside the legitimating principles and provisions of TRIPS. This would mean that we do not conceptualise the l egitimacy of this legislation in terms of permitted exceptions by TRIPS. Legislations and safeguards related to health cannot be located only within the spaces provided by TRIPS. If health is recognised in countries as a right, either as a derivative of the right to life (India) or as a constitutional right (South Africa) it needs to move beyond and encompass the many and varied duties that flow from the recognition of these rights. Health-related duties cannot expand or contract in relation to the rights of innovators. Rather, the rights of innovators must be integrated within the framework of these fundamental human rights.

    Precautionary Principle

    Foremost in the minds of the drafters of S ection 3(d) was not compliance or noncompliance with TRIPS, although some concerns with TRIPS compatibility were expressed in the Indian parliamentary debates in early 2005 (XIV-IV Session – 25 February24 March 2005) which took place in the context of Patent Amendment Act 2005.

    The parliamentary debates anticipated the fact that the product patent regime that India was becoming a part of would have significant implications for public

    september 10, 2011

    health and importantly, for the supply of affordable drugs to the rest of the world. The concern was based on the fact that over a period of time Indian drug companies would lose the opportunity to develop processes for patent protected drugs in the country and therefore would cease to be suppliers of affordable generic drugs to millions across the world. Consequently, the need for safeguards was felt keeping in mind both India’s pharmaceutical export potential and public health concerns.

    Why did India feel the need to limit the patentability of incremental innovations? Are there not already TRIPS criteria which reserve patentability for “new inventive step”, for something that is “novel” and “nonobvious”? The biochemical-pharmaceutical sector has made it difficult to determine a clear demarcation for the fulfilment of these criteria. For example, it has been pointed out that between 1995 and 2003, only 274 new chemical entities had been granted marketing approval by the United States’ Food and Drug Administration (USFDA). This implies that an overwhelming majority of new applications were for “incrementally modi fied drugs”. The number of new molecular entities approved by the USFDA drastically declined since the mid-1990s (from 53 in 1996 to a minimum of 17 in 2002).

    Obviously, there has been a parallel system devised to beat the criteria of inventiveness either to claim new patents, or to renew patents when they approach expiry. Tweaking of drugs to claim novelty (Novartis’ Glivec, Merck’s Efavirenz, Gilead Sciences’ Tenofovir and Amprenavir, Roche’s hepatitis drug Pegasys) and combining pre-1995 drugs to create a “new” drug (Abbott’s Kaletra and Aluvia) are some examples of the rampant practice of tweaking novelty itself!

    There is therefore a critical need to expand the interpretative framework of pharmaceutical patents. Section 3(d) is an attempt in this direction. The value of 3(d) is not in settling the debate on what constitutes invention, what is novel, and what is useful. If at all, it perhaps complicates the issue by adding a nebulous dimension, of what could constitute “novel”. But what 3(d) does, and what the Glivec judgment based on this section does, is to incorporate a precautionary principle into the current dialogue on ways to protect human health.

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    Economic & Political Weekly


    There could indeed emerge more clarity; “efficacy” and “significant enhancement” could develop more precise guidelines but answers can only be successful if we know the full range of questions that need to be asked. The questions need to locate the debate outside the spaces provided by WTO and TRIPS. As a precautionary principle, 3(d) combines considerations which are technical in nature as well as those that locate themselves outside the TRIPS framework in health concerns. This principle, formalised at the 1992 UN Conference on Environment and Development, emphasises that the discipline of precaution be carefully exercised to avoid potential harm and unforeseen and unintended consequences. This principle requires that precaution should prevail whenever questions of human and environmental health are involved. It mandates restraint until cause and effect relationships are properly understood.

    So the contention here is that the potential harm of patents on incremental drugs could be so tremendous that a precautionary measure needs be employed to prevent the damages before they occur. As a precautionary principle 3(d) is expected to prevent a health emergency, which could arise out of removal of affordable, life-saving generic drugs from the market and thereby, limiting access to these drugs. This is where this principle scores over the compulsory licensing provision implied in Article 31C of TRIPS which provides measure of addressing health emergencies and not preventing them.

    Implications for Drug Access

    At stake in the Glivec case is not just the fate of the Indian generic drug industry but the life and well-being of hundreds of millions of users of generic drugs the world over. “We have opposed patent applications for crucial AIDS drugs”, says Elango Ramchandar, president of Indian Network for People with HIV/AIDS. “Our survival depends greatly on winning these patent oppositions. Novartis is a test case for us” (Bidwai 2007). This case also has huge implications for the supply of affordable medicines not just in India but in African countries and other parts of the developing world that rely on medicines exported from India. The ramifications of this case are wide and multidimensional. It is for this reason that it has become the face of the global campaign to save generic production of drugs in India.2 Ninetyone organisations and personalities from around the world also made a call to Novartis to drop the case in an open letter in October 2006 to Daniel Vasella, chair


    man and CEO.

    India has, over the years, become a very large player in the production and exports of generic medicines the world over, justifiably earning the designation of “the pharmacy of the developing world”. Some figures compiled by Médecins Sans Frontières (MSF) on India’s role show that, while 67% of medicines produced in India are exported to developing countries, 70% of the drugs for treatment for patients in 87 developing countries, purchased by UNICEF, International Dispensary Association, the Global Fund (GFATM) and the Clinton Foundation since July 2005 has come from Indian suppliers (Chandra 2010: 218).

    By excluding generics, essential drug patents have the potential to undermine access to medicines for HIV/AIDS, for heart disease, for diabetes, in fact for every “new” medicine needed by the poor in developing and poor countries. In every case generic prices present an opportunity for cost savings.


    Pharmaceuticals ought to constitute a different field within the larger domain of intellectual property rights. Incrementally improved drugs, tweaked or evergreened to beat the nebulous criterion of novelty, threaten to infringe upon the access rights of millions. While the world today is not at liberty to discard pharmaceutical patents there is an urgent need and a space, as Section 3(d) has demonstrated, to devise more stringent criteria to prevent evergreening of drugs and to induce a measure of balance between the intellectual property rights of the innovators and human rights like the right to health.

    With Novartis appealing to the Supreme Court, the case is critically poised. If an interpretative ambiguity of Section 3(d) is exploited, or Article 14 comes into play, Novartis may well have the last laugh. But that will be disastrous for the supply of affordable generic life saving drugs the world over and for national legislations to assert their sovereign right to protect critical health concerns that override TRIPS. Se


    tion 3(d) of the Indian Patent Act, therefore, should not be assessed in terms of its compatibility with TRIPS, for TRIPS does not have the normative core which can benchmark the realisation of core fundamental rights like the right to health.


    1 CPAA also contested the fact that there were only around 7,000 CML patients, 99% of who were covered by Novartis’ drug donation (GIPAP) and provided Glivec free of charge. According to CPAA there are 30,000 CML patients detected every year most of who are not covered by Novartis drug donation program.

    2 Ed Sliverman, “India’s Glivec Ruling Is Bad News for Other Drugmakers Too”, Pharmalot, http://www. Also see, Lawyers Collective and their AMTC campaign reports at ^amtc/^Patent_Oppositions/introduction.asp

    3 Available at


    Bidwai, Praful (2007): “High Stakes in Attack on Indian Patent Law”, One World, (last visited 14 August 2011).

    Berne Declaration (2006): “Novartis Files Case in India Challenging Patent Controller’s Order and Patent Law”, available at html#note1#note1 (last visited 1 September 2011).

    Chandra, Rajshree (2010): Knowledge as Property: Issues in the Moral Grounding of Intellectual Property Rights (Delhi: OUP).

    Colston, Catherine and Kristy Middleton (2005): Modern IP Law (London: Cavendish Publishing).

    Decision of the Controller, Chennai Patent Office, available at Patent-office-Order-India-Glivec (last visited 5 September 2011).

    Declaration on the TRIPS Agreement and Public Health, Doha, 9-14 November 2001 WT/MIN(01) /DEC/W/2, tripshealth.pdf (last visited 9 September 2011).

    Nag, Manabendra Kumar (2004): “Indian Constitution, Tipped by the GATT, the TRIPs and the Indian Patent Law” in Shiv Sahai Singh (ed.), The Law of Intellectual Property Rights (New Delhi: Deep and Deep Publications).

    Novartis Case (2007): 4 MLJ 1153, 5.

    Text of the Writ petition No 24759 of 2006 in the High Court of Judicature at Madras Text of the Decisions in Novartis AG vs Union of India: http://judis.nic. in/judis_chennai/qrydisp.aspx?filename=11121 (last visited 4 September 2011).

    EPW Index An author-title index for EPW has been prepared for the years from 1968 to 2010. The PDFs of the Index have been uploaded, year-wise, on the EPW web site. Visitors can download the Index for all the years from the site. (The Index for a few years is yet to be prepared and will be uploaded when ready.) EPW would like to acknowledge the help of the staff of the library of the Indira Gandhi Institute for Development Research, Mumbai, in preparing the index under a project supported by the RD Tata Trust.

    Economic & Political Weekly

    september 10, 2011 vol xlvi no 37

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