Novartis suffered a major blow Aug. 6 when an Indian court dismissed its challenge of a key government provision that blocks the company from obtaining a patent for its oncologic Gleevec (imatinib).

Specifically, the Indian High Court in Chennai dismissed Novartis' writ petition challenging the constitutionality of the government's Section 3(d) clause - a major section that Novartis says restricts important innovations in drug development. The court, however, deferred final authority to the World Trade Organization to resolve minimum standards on property rights.

"We disagree with the court's action, but our actions are advancing the debate in India," Novartis told "The Pink Sheet" DAILY. "We want to make sure India has effective systems in place for future innovations."

The court decision could add to fears among drug manufacturers that their efforts for research and development in India could be drastically hampered, a point Novartis highlighted in a same-day news release. The decision also raises questions about companies' ability to launch intellectual property rights challenges in India.

Novartis holds patents for Gleevec, a drug that treats two rare cancers, chronic myeloid leukemia and gastrointestinal tumors, in nearly 40 countries, the company said. More than 90 percent of the patients in India who are prescribed Gleevec receive it for free.

Novartis' lawsuit to gain a patent for a new formulation of Gleevec is the first legal challenge to Section 3(d) of the Indian Patent Act of 2002 which seeks to bar "evergreening" by restricting patents for minor improvements to old formulations.

While the court decision is a stumbling block for Novartis' efforts, the company said it will not challenge the ruling to India's Supreme Court.

"We await the full decision to better understand the court's position," Novartis India Limited Managing Director Ranjit Shahani said. "Our actions advanced this essential debate in India; now local and international leaders in both industry and academia recognize the inadequacies of Section 3(d) and are raising serious concerns about the deficiencies of the Indian patent system."

Formal reasons were not given for the Indian court decision yesterday because it was not published.

Drug companies have been eyeing the decision and are concerned about failing to make inroads in India, Kevin Reichelt, program attorney for the International Property Institute in Washington, said in an interview.

"India has been a huge generic maker (of pharmaceuticals) and still wants to be pharmacy for the world," he said. While patents provide "potential for innovation, India still has historical connections to the generic industry."

Focusing on attaining a patent for Gleevec, Novartis has filed a separate written petition in the Indian court seeking a new technical member of the Intellectual Property Appellate Board. The current technical member is the former Controller General of the Indian Patent Office, responsible for the original rejection of the Gleevec patent.

"We expect the appellate board to conduct an independent and impartial review of our appeal and ensure transparency of the decision-making process," said Shahani.

The WTO Agreement on its Trade-Related Aspects of Intellectual Property Rights, which India signed in June 2005, outlines minimum standards for intellectual property rights and requires member countries to create mechanisms to safeguard intellectual property. TRIPS also affords governments some flexibility to regulate intellectual property rights. WTO has been urging India to improve its intellectual property rights system the past year.

By signing on to TRIPS, India obliged itself to honor product patents, as well as make "reverse engineering" and copying Western drugs illegal for products patented after 1995. The application for the original free base form of Gleevec was filed prior to 1995, and as mandated by section 3(d), the beta-crystalline form of imatinib mesylate must show substantially more efficacy than the original free base formulation to receive patent protection (Also see "Lost In Bureaucracy? Novartis Gleevec IP Case Held Up By Indian Legal System" - Pink Sheet, 24 April, 2007.).

In January 2006, the Indian Patent Office denied Novartis a patent for a beta-crystalline form of imatinib mesylate, reasoning that it did not show sufficient efficacy improvement over the original free base form of the drug (Also see "Intellectual Property In India: Novartis Gleevec Suit Is First Challenge To Law Restricting New Formulation Patents (Part 2 of 3)" - Pink Sheet, 15 March, 2007.).

- Joe Cantlupe

This article is reprinted from "The Pink Sheet" DAILY, Aug. 7, 2007

Indian Court Hands Novartis Setback In Gleevec Patent Case

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