x Abu Dhabi, UAEFriday 19 January 2018

Indian court ruling might boost cost of vital drugs

India is a major source of generic drugs for developing countries, but a landmark court case threatens to choke off that vital supply.

NEW DELHI // "I used to know the undertaker's phone number off by heart," says Loon Gangte, remembering the dark days of the 1990s when he worked in a care home for HIV-Aids patients in Delhi.

Mr Gangte, a wiry 45-year-old, runs Delhi Network of Positive People, a support group for people with HIV.

He knows what it feels like to be given a death sentence.

"I was diagnosed in 1997. In those days, the only thing the doctor could say was 'Think positive and pray to God'," he says.

Medicines to control HIV then cost more than US$10,000 (Dh.36,700)  a year. In India, where per capita income is still about US$760 (Dh.2,800) a year, there were few customers. That changed in 2000 when the first generic drugs for HIV began to appear. Mr  Gangte now pays about $230 (Dh840) a year for treatment. "It's thanks to those drugs that I'm alive today, and my wife and baby boy are negative," he says.

India is a major source of generic drugs for developing countries, treating everything from tuberculosis to cancer. But a landmark court case threatens to choke off that vital supply.

The Swiss pharmaceutical giant Novartis is demanding the right to patent a cancer medicine called Glivec. If they win, they would have a 20-year monopoly and India could no longer produce its generic equivalent at a tenth of Novartis's US$2,600 (Dh9,500) price. Health workers fear other big drugs companies would follow suit.

"If they win, it will open the floodgates for other companies to seek patents on all kinds of existing medicines," said Leena Menghaney, a Delhi-based access campaigner with Medecins Sans Frontieres.

A victory for Novartis would undermine a key clause in India's patent laws – known as Section 3d – which aims to protect the generic drugs industry.

Across the developing world, more than six million people are being treated for HIV-Aids today, and 80 per cent of their medicine comes from generic drug labs in India.

Medication once far beyond the reach of the world's poor can now be purchased by governments at a fraction of the price charged by companies in the West.

Novartis has already lost twice in lower courts, which ruled that Glivec was a new version of an existing drug, imatinib, and therefore not covered by India's 2005 Patent Act. It now has a final hearing due in the Supreme Court on March 28.

The company argues that Glivec is more than a minor improvement on an old drug because it is absorbed into the bloodstream 30 per cent more effectively.

Its opponents say that improving absorption – or "bioavailability" in the industry jargon – is easy for drug companies and does not require clinical trials, the most expensive part of drug development.

The Oregon University scientist who invented Glivec, Brian Druker, agrees. He feels "considerable discomfort" about the prices charged by Novartis for his discovery.

"Pharmaceutical companies that have invested in the development of medicines should achieve a return on their investments," he wrote in a 2007 article for India's Mint newspaper.

"But this does not mean the abuse of these exclusive rights by excessive prices and seeking patents over minor changes to extend monopoly prices."

Without Section 3d, generic companies would also be blocked from copying new ways of delivering drugs, many of which are vital to patients in the developing world.

One example is lopinavir-ritonavir, a second-line HIV treatment. The US company Abbot is fighting for a patent on its new tablet version of the drug, which, unlike the original gel version, does not require refrigeration.

"Most homes in India don't have a fridge and there is no cold-chain infrastructure for transporting drugs, so it is vital that we have the new tablet version," said Ms Menghaney. "Abbot is applying for a patent that would give them a monopoly until 2027."

Drug companies justify their patents and exorbitant prices on the grounds that developing new drugs is high-risk and extremely expensive.

A spokesman for Novartis said: "Patents provide an incentive to the pharmaceutical industry to invest in the development of new medicines.

"Without patents there will no research and without research there will be no innovator drugs which in turn will mean no generics."

Critics respond that the majority of research in the West is publicly funded. Glivec resulted from decades of university research, funded primarily by public bodies such as America's National Cancer Institute.

Drug companies are famously secretive about the amount they spend on research and development. A 2010 study published in Nature put the average cost of bringing a drug to market at US$870 million (Dh.3.2bn), though this has been hotly contested in both directions.

In any case, the pay-off is huge. Novartis made US$4.3 billion (Dh.15.7bn) in profits last year from Glivec alone.

The broader question is why Novartis needs patents in India, given that the vast majority of its profits come from developed countries, who can restrict imports on unpatented products.

Novartis declined to give information on how much money they make in different countries, but with many patents from the 1990s due to expire in the coming years, many companies are looking at ways of increasing revenue in new regions.

A possible compromise could involve royalty payments paid by generic companies.

"India requires a pragmatic licensing system," said Y.K. Hamied, chairman of Cipla, a Mumbai-based generics company.

"Science has to be rewarded, but it has to be equitable and there should be no monopoly. The third world can't afford monopolies."

The issue is not about Glivec in particular, which Novartis already provides free of charge to around 15,000 Indians under its patient assistance programme.

But for the millions who rely on the rest of India's generic drug industry – and the liberal patent laws that underpin it – the repercussions of a Novartis victory are ominous.

"It's very simple," said Mr Gangte. "If they win this case, we will be back in the pre-2000 era where the rich live and the poor die."