Fool’s Day, 1st April, 2013, the day the Supreme Court of India passed the no bluff order in the matter of Novartis AG v. Union of India, Civil Appeal No. 2706-2716 of 2013 (“Novartis Judgement“) and the day any and everyone remotely associated with medicine or health industry, i.e., almost about everyone barring the superhumans, had the urge to understand and to have an opinion on the matter.

The matter at hand seems simple wherein a multinational pharmaceutical company claims the protection of the patent regime to an added significant improvement over one of its existing products while the claimed patent is denied protection on the basis of lack of substantial innovation. In crux this may be so, however, the brouhaha surrounding the Novartis Judgement is because of the implications, domestically and internationally, resulting from the judgement.

In order to value the opinion and the stance taken by the Supreme Court, it is pertinent to understand the product, patenting of which has been refused. Novartis AG’s (“Novartis”) Glivec is a medication used to treat certain forms of leukemia, gastrointestinal cancer and some rare tumours. Therefore, people who have witnessed any of these diseases operate on peers from a close quarter would be better equipped to appreciate the Novartis Judgement.

Novartis stressed that the original patented form of Glivec was not suitable for tabletting and it spent years developing the final chemically stable form of Glivec that allows patients to be treated easily and accordingly, in 1997 filed for its patent. In 2005, when India finally began providing patent protection to pharmaceutical drugs in accordance with its obligations under the World Trade Organization’s TRIPS Agreement, Glivec was refused patent protection.

In 2009, Novartis lost an appeal on the patent at the Intellectual Property Appellate Board (“IPAB“) which, while agreeing that the new form of Glivec was both novel and inventive, rejected the patent under section 3(d) of The Patents Act, 1970 (“Act“). Section 3(d) provides, essentially, that a new form of a known substance will not be patentable unless it results in an increased efficacy. However, Novartis’ challenge of the constitutional validity of Section 3(d) before the division bench of the Madras High Court failed and it obtained special leave to appeal to the Supreme Court against IPAB’s order.

The Supreme Court discussed the evolution and jurisprudence of Section 3(d) to analyze the appeal of Novartis. The Court observed that primarily, the said section was introduced to fulfill the obligations under TRIPS and also to meet the public health care needs of India. Secondly, the events leading to the discovery of the beta form of ‘imatinib mesylate’ (marketed under the brand name ‘Glivec’) was also considered to determine whether the claimed molecule was novel and not anticipated by existing prior art. The Court observed that, for the purposes of Section 3(d), the claimed molecule ‘imatinib mesylate’ was the ‘known form’ and not an entire innovation but only a reformulation of ‘imatinib’, a molecule whose patent had expired. On this basis, the Court rejected Novartis’ application to patent the beta crystalline form of ‘imatinib mesylate’.

As a result, the Novartis Judgement has come to be the first test of the principle of ‘evergreeing’ in India. One of the intents of introducing Section 3(d) in the Act was to control the practice of ‘evergreening’, by requiring that “new version of a drug can be patented only if it is shown to be of greater therapeutic efficacy than previous versions, whose patent has expired” i.e., preventing the patenting of minor improvements on inventions that already exist. This precludes drug companies from getting monopoly protection on updated drugs that do not represent a major advance over previous versions.

Evidently, though the Novartis Judgement is based on interpretation of the Act, it does leave enough leg space for innovators to satisfy the ‘efficacy’ requirement of Section 3(d) as the Court did not rule on the precise scope of the term ‘therapeutic efficacy’ in Section 3 (d), thus allowing a lot of room for further interpretations. Accordingly, the Court also acknowledged the importance of patents in fostering research for the development of new medications.

However, the Novartis Judgement did create immediate ripples and if rumors are to be believed may result in restricted investment on research and development by MNCs in India. This was followed by spontaneous favorable reaction from many quarters including patients and doctors worldwide as the counter-scenario. This has added fire to the debate of production of generic versions of drugs still under patent, the choice between patents and patients!

Novartis Judgement is definitely perturbing for the international innovators and drugmakers also as it establishes a limited precedent for other countries with similar laws including Philippines and Argentina and is fast garnering support from countries such as Brazil, Thailand, Australia and Canada.

The message India did make clear, being a boon for the copycat or generic drugs industry, is that at all times it will seek to uphold the right to health and profess the pharmacy of the poor i.e. prerogative will always be patients over patents.