[Ip-health] Novartis Duplicity on Bayer Compulsory License

Baker, Brook b.baker at neu.edu
Wed Apr 18 07:47:45 PDT 2012


Frontline (India) April 21-May 04

http://www.frontline.in/stories/20120504290802800.htm

Drug and duplicity

Brook K. Baker

NOVARTIS has long been suing the Government of India to eliminate or weaken Section 3(d) of the Patents (Amendment) Act, 2005, which established strict standards of patentability in order to prevent the ever-greening of patent monopolies on medicines. Although Novartis lost in 2007 its initial efforts to have Section 3(d) declared unconstitutional and violative of international norms for national patent regimes, it has persisted in appealing and re-appealing the denial of its patent application on Glivec, a key anti-cancer medicine whose basic ingredient was invented in 1993, well before India was required to begin granting patents on pharmaceutical products.

Novartis' latest appeal before the Supreme Court of India is scheduled to be heard in July. In that hearing, Novartis will ask the court to eviscerate the existing interpretation of Section 3(d), which limits patents on new forms and versions of existing chemical entities to those rare circumstances when such routine modifications result in a significant improvement in efficacy in terms of treatment of human illness. Novartis wants minor improvements in absorption or stability of the medicine to justify an additional 20-year monopoly.

In previous press statements, Novartis India has said that it is merely seeking clarity on the unique provisions of the Patents Act and that it is not trying to undermine lawful flexibilities in India or elsewhere with respect to the promotion of more affordable medicines. It has specifically said that it respects India's rights under international and domestic law to issue compulsory licences (permission to a generic competitor to make and sell an equivalent product). That was until India actually issued its first compulsory licence on Bayer's cancer medicine, sorafenib, on March 12. There, the Patent Controller ruled that Bayer had neglected to meet the reasonable requirements of the public, that it had charged an unreasonable price ($66,812 per patient a year!) and that it had not worked the product in India by means of any local manufacture.

Following the issuance of the Bayer compulsory licence, Novartis's publicity machinery changed its tune. On March 14, in The Times of India, Novartis' local representative in India, Ranjit Shahani, wrote: “Compulsory licences are powerful rights granted to governments to deal with extraordinary circumstances such as a national health crisis and must hence be used with extreme prudence. As per TRIPS, WTO member states can grant a compulsory licence in case of national emergency, in case of public non-commercial use, in case of anti-competitive practices or in case of a dependent patent if additional criteria are met. If used injudiciously, compulsory licences will in fact work to the detriment of the patient through the negative impact they will have on future investment in innovative pharmaceuticals.”

This statement grossly misstates the operative legal standards for compulsory licences under Article 31 of the World Trade Organisation's (WTO) TRIPS Agreement, but it helps to bring to light Novartis' real position on India's right to issue compulsory licences. Compulsory licences, as made clear both in Article 31 and in the Doha Declaration on the TRIPS Agreement and Public Health, are not limited to “extraordinary circumstances”, let alone to the narrow set of national emergencies, government use, anti-competitive remedies, or dependent patents listed by Shahani. WTO member states, including India, are free to determine any and all grounds upon which compulsory licences may be issued, with explicit acknowledgement that they may do so to promote public health and access to medicines for all.

India's issuance of a compulsory licence on Bayer's sorafenib was not “injudicious”. The Patent Controller's findings were detailed and fully weighed all of the arguments advanced by Bayer. In the end, however, the conclusion was easy – pricing a medicine so that fewer than 200 cancer patients in India could access it, instead of the thousands who needed it, justified a licence to Natco, which could make and sell the same medicine at 3 per cent of the Bayer price while still making a profit and paying a 6 per cent royalty to Bayer. Health activists are hopeful that the sorafenib case will establish a strong precedent for more frequent compulsory licences on key HIV/AIDS, cancer, and psychiatric medicines, indeed, on medicines more generally.

Novartis's overzealous defence of intellectual property rights knows no bounds. It seeks to strengthen and lengthen patent monopolies and prevent the use of hard-fought flexibilities that ensure that poor people will not be left to die. Yet, it has issued pious statements in the past about its benign intentions with respect to the use of lawful TRIPS flexibilities. Now, the façade has been removed to reveal the naked greed that actually motivates Novartis' attack both on its lawful adoption of high standards for patents and on India's use of well-established flexibilities that have been recognised internationally for a century and a half.

Brook K. Baker

Professor Brook K. Baker is with Health GAP (Global Access Project), Northeastern University School of Law Program on Human Rights and the Global Economy, Boston. He is also Honorary Research Fellow, University of KwaZulu Natal, Durban, South Africa.

Professor Brook K. Baker

Health GAP (Global Access Project)
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
b.baker at neu.edu



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