Q&A on patents in India and the Novartis case

Q: Why do millions of people rely on India for affordable medicines?

A: Drugs produced by companies in India are among the cheapest in the world. That is because until recently, India did not grant patents on medicines. India is one of the few developing countries with production capacity to manufacture quality essential medicines.

By producing cheaper generic versions of drugs that were patented in other countries, India became a key source of affordable essential medicines, such as antiretroviral medicines to treat HIV/AIDS.

Drugs produced in India have been used for the country's domestic market and are also imported by many developing countries that rely on India to provide the medicines needed e.g. to run national AIDS treatment programmes. Over half the medicines currently used for AIDS treatment in developing countries come from India and such medicines are used to treat over 80% of the 80,000 AIDS patients in Médecins Sans Frontières projects today.

Q: What is the relationship between patents and affordable medicines?

A: Patents grant local monopolies to companies who hold them for a certain amount of time. This means that a company that holds a patent on a drug in a particular country can prevent other companies from producing or selling the drug in that country for the duration of the patent's term, which, according to World Trade Organization (WTO) rules is a minimum of 20 years. This in turn allows companies to charge high prices in countries where they hold patents, because there are no competitors in the market.

Competition among producers is the tried and tested way to bring prices down. Competition among generic manufacturers is what helped bring the cost of AIDS treatment down from $10,000 per patient per year in 2000 to $130 per patient per year today.

In the absence of patents, multiple producers compete for a share of the market, driving the price down as low as possible. In addition, having multiple sources helps increase the availability of drugs. Furthermore, the absence of patents in India has helped the development of, for example, three-in-one AIDS medicines and formulations for children.

Q: Why does India grant patents on drugs now?

A: As a WTO member, India has to comply with trade rules set by the WTO. One of these is the Agreement on Trade-related Aspects of Intellectual Property, or TRIPS, which obliges WTO countries to grant patents on technological products, including pharmaceuticals.

To comply with this international obligation, India changed its patent law in 2005 and started to grant patents on medicines. As a result, if patents are granted in the country, Indian generic manufacturers will not be able to produce cheaper generic versions of these medicines, which will have an impact not only in India domestically, but also on other countries that import Indian generics. Only a few new medicines have been patented in India today.

Roche obtained the first pharmaceutical patent in India in March 2006 for a hepatitis C treatment - but this is likely to increase in the future.

Currently, nearly 10,000 medicine patent applications await examination in India. If India begins to grant patents the same way that wealthy countries do - where medicines are routinely protected by several patents covering each small modification - it could mean the end of affordable medicines in developing countries.

Q: Why is Novartis suing the Indian Government?

A: Novartis applied for a patent in India on the cancer drug imatinib mesylate, which the company markets under the brand name Gleevec/Glivec in many countries. The patent was rejected in India in January 2006 on the grounds that the drug was a new form of an old drug, and therefore was not patentable under Indian law.

In other countries where Novartis has obtained a patent, Gleevec is sold at $2,600 per patient per month. In India, generic versions of Gleevec are available for less than $200 per patient per month. Novartis is therefore trying to have the patent decision overturned so that it can sell Gleevec at the same price in India as in other countries.

Novartis is also trying to challenge the Indian patent law so that patents are as easily granted in India as they are in most other countries.

Q: How is it possible for India to reject a patent that is granted in other countries?

A: There is no such thing as an international or global patent. Patent applications are examined by patent offices in individual countries, and each office deliberates whether a particular drug should be patented or not on the basis of local patent regulations.

Fortunately, India designed its new patent law so that the number of patents granted would be kept to a strict minimum. This was an effort to reward innovation, which is the rationale of the patent system to begin with. The Indian law states that patents should only be granted on medicines that are truly new and innovative.

This means that companies should not be able to obtain patents for drugs that are not really new, such as for combinations or for slightly improved formulations of existing drugs.

This part of the law was specifically targeted at preventing a common practice of drug companies of trying to get patents on insignificant improvements of existing drugs, in order to extend their monopolies on drugs as long as possible.

Novartis is challenging this part of the Indian law, which the company says violates WTO rules.

Q: Does India have the right to have this particular patent law?

A: In 2001, all WTO countries signed the Doha Declaration, which states "that the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all."

The same declaration allows countries to take measures to protect public health. India's patent law is based on this declaration. India chose to design a patent law that contains a key public health safeguard, namely the provision that only truly new or innovative drugs should be patented.

Q: Aren't patents needed to stimulate innovation for new drugs by pharmaceutical companies?

A: An increasing number of studies are showing that while patent protection has increased over the last 15 years, the innovation rate has been falling, with an increase in the number of 'me-too drugs' of little or no therapeutic gain. A survey published in April 2005 by La Revue Prescrire, concluded that 68 percent of the 3,096 new products approved in France between 1981 and 2004, brought 'nothing new' over previously available preparations.

Similarly, the British Medical Journal published a study rating barely five percent of all newly-patented drugs in Canada as 'breakthrough.'

And a breakdown of over one thousand new drugs approved by the US Food and Drug Administration between 1989 and 2000 revealed that over three quarters have no therapeutic benefit over existing products.

Q: What will happen if Novartis wins the case?

A: If Novartis wins the case and succeeds in getting the provision of Indian law changed to resemble patent laws in wealthy countries, patents may be granted in India as broadly as they are in wealthy countries. This will mean that fewer and possibly no generic versions of newer drugs will be able to be produced by Indian manufacturers during the patent terms of at least 20 years, and India will no longer be able to supply much of the developing world with cheap essential medicines.

The example of HIV/AIDS medicines is a good illustration of the problem. Even though older drugs to treat HIV/AIDS have become affordable thanks to generic competition, the availability of newer and improved drugs is crucial, as people become resistant to the drug combinations they take after a certain amount of time and inevitably need to be switched to newer "second-line" drug regimens.

Data from MSF's project in Khayelitsha, South Africa, illustrates this growing need: 17.4% of people on treatment there for five years have had to switch to a newer drug combination. Yet today, newer drugs are largely still only available from originator companies holding patents, which keeps prices high and availability low.

This is because Indian manufacturers have been reluctant to start producing these newer medicines, as they fear production would have to stop if patents were granted on these drugs in India. This in turn has led to the fact that prices for newer AIDS medicines can be up to 50 times more expensive than older drugs.