Indian patent case driving R&D to China

Swiss drug major Novartis has warned of a shift in the industry's R&D priorities away from India towards China, following the recent failure by the firm to challenge the country's patent legislation (Marketletters passim). In a recent court decision, the Chennai High Court ruled that the 2005 legislation which restricts patent applications for incremental inventions is not unconstitutional and that it did not have the jurisdiction to rule on whether the 2005 Patent Law's Section 3(d) contravened the World Trade Organization's agreement on Trade-Related Intellectual Property Rights (TRIPs). Novartis argues that the law under which its oncology product Glivec/Gleevec (imatinib mesylate) was denied a patent on the grounds of being merely an "incremental" medical advance is incompatible with India's treaty obligations.

A High Court hearing on whether a member of the Intellectual Property Appellate Board should be excluded for conflict of interest was due to resume on September 10, after the Marketletter went to press. Once that matter is resolved, the IPAB is due to resume deliberations about the refusal to award a patent for Glivec. Novartis argues that its legal action is not about making money from Glivec in India, where at present only 75 people pay for it and the firm donates the drug free of charge to about 7,500 people.

Daniel Vasella, Novartis' chief executive, was reported in the Financial Times as stating that "we will not discontinue activities, but India is forgoing opportunities for future investment." A spokeswoman for the firm told the Marketletter that the difference between India and China at present is the latter "has been making progress in IPR protection." The question for India was whether there was "the aspiration to move the drug industry there up a level," from the existing powerful generic sector to one that involved the added-value of R&D. She noted that, last year, Novartis opened a research facility in Shanghai, China.