LONDON, UK (GlobalData), 21 September 2012 - An application filed by Novartis in India for the patent protection of its tyrosine kinase inhibitor, Glivec (imatinib mesylate), has been in legal oblivion for some time. Glivec, which received US FDA approval in May 2001, is indicated for the treatment of multiple cancer types, including newly diagnosed adult and pediatric patients with Philadelphia chromosome positive chronic myeloid leukemia (CML).
The decision of the Supreme Court of India to not uphold patent protection of Glivec will not come as a shock to Big Pharma. BRIC countries have seen massive growth in healthcare spending over the last decade. Many patented pharmaceutical products in India are readily available over the counter in their respective generic forms. With the average salary in India being less than $200 per annum, many lifesaving chemotherapeutic agents would be unaffordable to the average patient. In fact, the crux of the argument raised by the Indian government is that the general population cannot afford drugs like Glivec (at a cost of $2,200 per patient per month) and this has led generic manufacturers to offer generic versions of the treatment for $170 per patient per month. Novartis’ attorney stated on the first day of opening arguments that of the 41,794 CML patients in India, 15,690 were being treated with Glivec. He further explained that of this number, 15,155 patients received Glivec under the Glivec International Patient Assistance Program (GIPAP) for free, 370 patients had received Glivec for a discount, and 165 patients had paid the full amount.
The Indian patent application for Glivec, originally filed by Novartis in 1998, expired in 2008. The case centers around the country’s patent law on new pharmaceuticals. More importantly, Indian patent protection law restricts patents for already known drugs unless the claims are superior in terms of efficacy. The purpose of the legislation is to prohibit pharmaceutical companies from ‘evergreening’ – a process commonly employed to extend a patent’s life by making minor changes. Novartis states its new formulation boasts a 30% increase in bioavailability over previous formulations and that patients who cannot afford the drug can receive treatment for free under GIPAP. Novartis further goes on to claim India’s patent law was unconstitutional and had purposely allowed generics to flourish. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, an initiative set up to provide guidance in patent law and pharmaceuticals, allows India to issue compulsory licenses for pharmaceuticals, but in the case of Glivec this will not be beneficial to Novartis. In a hypothetical scenario under the said licensing scheme, and using the recently announced compulsory license for Bayer’s drug Nexavar as an example, Novartis would receive 6% from generic manufacturers. From the 15,690 Glivec patient population, Novartis (under this scenario) would receive $1.92m in licensing fees from generic manufacturers every year. Currently, from India’s 165 paying patients, the drug is earning Novartis $4.36m per annum, which does not account for patients receiving the drug under a discount. It is therefore conjectured that Novartis is making more revenue from its 165 patients then it would under India’s compulsory license scheme by licensing the drug to generic manufacturers and treating 15,690 patients. Novartis would further increase revenue if competition from generic versions of Glivec ceased, for which it is fighting, without affecting India’s poor who receive the drug for free. If Novartis was forced into licensing Glivec to generic manufacturers, it may actually harm the poor of India, as even $170 a month would be a stretch on the budget of many Indians and under this scenario there would be no incentive for Glivec to continue delivering drugs for free under GIPAP.
The Indian government is in a balancing act between allowing patients easy access, not just to Glivec, which Novartis provides for free, but to other proprietary drugs. The government must also not deter domestic generics manufacturers whose factories provide jobs to the population on razor-thin margins.
Novartis has lobbied the courts in India for something it believes to be right and is accepted in both the EU and the US. However, pharmaceutical companies watching closely want to see the outcome of the case as it will set a precedent for future drugs. For Novartis, it may be more ethical and economically viable to continue GIPAP. Even if Novartis does win, Glivec would still not be protected as generic versions of Glivec have been on the market before 2005 and thus are protected under the ‘grandfather clause’ of Indian patent law. On hearing the first day of opening arguments, the Supreme Court of India asked Novartis to reduce the cost of Glivec for patients. However, this course of action could have dire consequences for the international pharmaceutical market. Developing nations and the BRIC consortium of countries have aggressively asked for lower cost pharmaceuticals; however, mature markets such as Spain, Ireland and Greece could also ask for similar reductions. This could also lead to a cascade effect in the economic downturn of larger economies such as the UK, who are also in talks to reform the National Health Service and likely to ask for similar considerations.
Related research: Chronic Myelogenous Leukemia (CML) Therapeutics - Pipeline Assessment and Market Forecasts to 2019
This expert insight was written by Irfaan Dawood, GlobalData's analyst covering Oncology. For more information, or to enquire about an interview, please contact the press office on the details below.
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