Novartis and the Indian patent regime – My view

I went through the good Barbarindian’s blog-post on the Novartis case and I have a few points of agreement and and a few rebuttals.

Let’s go through his points one by one:

        I The ruling stifles innovation

No, it doesn’t.  In fact, I believe, this ruling is neutral as far as innovation is concerned. In one way, it restricts the ability of Big Pharma to extend the life of its patent, thereby reducing incentive to focus on blockbuster drugs.

In another, it forces Big Pharma to cast their nets wider and look for more diseases and conditions to focus on.


       II Drug companies rely on Government research

Almost all innovation builds on some primary research done somewhere else. This is a strawman argument, not worth pursuing.

III This ruling will help the poor in the world

Let us assume RoI on health spending can be calculated as a composite of several numerators – no of lives saved/increased life expectancy/decrease inproductive days lost, upon a single denominator – Dollars spent.

  • Preventive efforts to save them from diarrhea, malaria, typhoid and dysentry
  • Neo-natal and obstetric care
  • Prophylactic usage of  preventives/vaccines to control infectious diseases

will provide a far higher RoI, than any amount of research on cancer, IMHO.

IV Novartis was trying to “evergreen” its patent

This is the elephant in the room, and the crux of the argument. What was Novartis exactly trying to do? What was the improved efficacy of the patent being sought? The whole dispute was over improved therapeutic efficacy of the new patent, i.e., enhanced ability to heal the disease. Novartis claimed therapeutic efficacy improvement was due to improved ‘bioavailability’ – i.e., the variant’s capability to be absorbed faster by the human body. The courts have decided against it.


We do not really know the additional effort/costs of work done by Novartis done on this new variant.

However, do note that the original patent filed was in ’93, during which Novartis has had 20 years to recoup its original costs. Also note that Indian companies have been restricted since ’03 from producing and distributing generics. It would not be anybody’s case to portray Novartis as a net revenue loser in this case. The fact that they have been distributing the drug to poor patients voluntarily is not germane to this issue either.

Where I really differ with Barbarindian is

a) His assertion that this will be a dis-incentive to drug companies to invest in high-end research in India.

Results of research performed in India can realistically be patented elsewhere under different patent regimes and can be sold at differential costs. Reluctance of drug companies to invest in Indian researchers is similar to reasons why auto companies and aerospace companies are reluctant to invest in India, lack of qualified talent and infrastructure.

b) If there is no incremental improvement, why not continue with the generic and avoid the new drug altogether?

This is not such a simple question. In case of critical conditions like leukemia, doctors (good ones) would face a real ethical dilemma deciding whether to avoid more expensive treatment that would fetch marginal improvements for poor patients, while going ahead with such treatment for richer patients. Can of worms here.


In conclusion, I believe the Novartis judgement is neither a blow for social justice nor a regressive judgement to restrict innovation. I, too, agree with barbarindian and realitycheckind that social arguments should not dominate a commercial argument.

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