[Ip-health] Novartis puts pressure on India over patent abuse

Tahir Amin tahir at i-mak.org
Mon Feb 17 15:16:40 PST 2014

Novartis puts pressure on India over patent abuse

By Andrew Ward in London and Amy Kazmin in New Delhi - Financial Times


Novartis has urged US and European governments to "apply pressure" on India
to respect intellectual property and warned New Delhi that its stance on
patents is deterring investment.

Joe Jimenez, chief executive of the Swiss drugmaker, urged India to follow
China's example and embrace strong IP rights as a way to develop its

"India is a big, important growing market but it is not a place to do
research and development," Mr Jimenez told the Financial Times. "If you do
not have strong protection of IP, you cannot invest in . . . medical

The Indian Supreme Court infuriated Novartis last year after it rejected
the pharmaceutical group's application for a patent for an updated version
of its cancer drug
Supreme Court verdict was one of several Indian court rulings that
overturned or rejected patents from Western drug companies, including Roche
and Pfizer.

"It is important for European governments and the US to ensure that in free
trade agreements India is respecting intellectual property," he said.
"Governments should apply pressure to ensure there is respect for IP."

IP rights is one of the most sensitive issues
talks over a potential trade deal between the European Union and India and
US businesses have also been lobbying for action against Delhi over alleged
protectionism and patent abuses.

Several industry groups called this month for the US Trade Representative
to designate India a Priority Foreign Country - a step towards possible
trade sanctions.

Tensions are particularly high over pharmaceuticals. In a country where 70
per cent of medical costs are paid out of pocket by the sick, or their
families, the government and courts have tended towards narrow
interpretations of patent protection for costly, life-saving medicines in a
bid to allow wider access to cheaper generics.

Drugmakers are worried that India's approach - including a law that sets a
higher standard for issuing patents than in other countries - will become a
model for other developing countries, threatening to undermine the
industry's business model in the world's fastest growing markets.

Mr Jiminez accused Delhi, which spends about just 1 per cent of GDP on
health, of using it as a pretext for boosting its generic drug industry.
"It is not about access to medicines," he said. "The Indian government . .
. spends among the least on health as a percentage of GDP in the developing

Despite the tough rhetoric, Novartis recently signalled an increase in
investment in India when it said it would be relocating around 4,000 jobs
from Europe - many to India's southern city of Hyderabad, where it expects
to move into a new campus in late 2015.

The company already has 2,300 employees in Hyderabad, a major hub of
India's generic drugs industry, working on a wide range of activities for
Novartis globally, including drug development and testing, regulatory
support and commercial back office operations.

Explaining its plans to scale up in Hyderabad, Novartis cited the city's
"highly educated labour pool with extensive pharmaceutical experience" as
an important draw. It also said it expected India, and Hyderabad, to be a
"valued partner" for Novartis global business in the future.

Rohit Malpani, policy director at Médecins Sans Frontières, the medical
charity, said India was right to clamp down on "frivolous" patent claims,
arguing that the drugmakers industry should focus on genuine innovation
rather than fighting to extend monopolies on existing medicines. "This is
not a question of India not respecting IP. They are simply trying to
eliminate abuses."

Tahir Amin
Co-Founder and Director of Intellectual Property
Initiative for Medicines, Access & Knowledge (I-MAK)
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