Isaac Asimov was a biochemist. He once sent a story to his editor and it was returned, with C(4)H(9)SH written on the copy. That molecular formula stood for butyl mercaptan and is a chemical compound that gives the skunk its smell. Thanks to Asimov, non-chemist science fiction readers learnt about this obscure compound. Something similar is happening with CGP57148B or STI571, imatinib mesilate. Most anti-cancer drugs inhibit division of cells. Imatinib mesilate inhibits tyrosine kinase enzymes (catalysts). As an anti-cancer drug, it belongs to a slightly different category and can be used to treat leukaemia, tumours and other malignancies. Novartis chemists, particularly Brian Druker, identified imatinib in the late nineties and, having obtained US FDA approval in 2001, Novartis markets imatinib as Gleevec in the US and Glivec in Europe and Australia. In 1998, Novartis filed a patent application for

Gleevec/Glivec in India. Then, because we used 10-year transitory provisions of TRIPs (trade-related intellectual property rights), India didn’t have product patents for pharmaceuticals. But we had a system of exclusive marketing rights (EMRs) and Novartis got an EMR in November 2003. There were delays in changing legislation and the first amendment to Indian Patents Act was in 1999, with a second amendment in 2002. The third amendment, with a complete product patent regime, was in 2005.

There are various strands in the tangled web floating around. First, patent protection, or intellectual property protection (IPR) in general, is about temporary monopolies granted to persuade inventors to place information about inventions in the public domain, so that there is access to information and frontiers of human knowledge can be pushed forward by others. Contrast this with a situation where information about inventions is retained in the private domain. The temporary monopoly, qualified by the existence of substitutes and use of competition policy instruments, is reward. More importantly, there is a trade-off between short-term static objectives and a long-term dynamic ones. If a patent regime is lax, short-term prices will be lower. But, in the long-term, there won’t be research and development, investments or supply-side changes that would have kept prices in check through new drugs and substitutes. TRIPs agreement only sets minimum standards of protection that every WTO member has to satisfy. Beyond the threshold, one can do what one wishes. It is difficult to dispute that the US went overboard in granting patents and progressively weakened criteria in gauging whether something was patentable. What do you expect in a country where the right to patent/ copyright is enshrined in the Constitution (Article I, Section 8)?

Second, although TRIPs is largely modelled on US law, what the US does should be irrelevant for our public policy purposes. One mentions this because US Supreme Court’s April 2007 decision figures in our Novartis debate. The US Supreme Court effectively made it more difficult to obtain “obvious” patents. However, what we do beyond the TRIPs’ threshold should be determined by our priorities, not by what some other country does or wishes us to do. This is equally true of pro-Novartis arguments that imatinib patents exist in 40 other countries. That can inform our decision but shouldn’t determine it.

Third, let’s not confuse broader public health issues with the limited issue of anti-cancer treatment. If we have Novartis in the blue corner, in the red corner we have assorted NGOs (not just Cancer Patients Aid Association) and domestic pharmaceutical companies that produce generic versions of imatinib. NGOs are rightly concerned with the state of India’s health. However, our health outcomes are functions of clean drinking water, sewage treatment, sanitation, immunisation, iron supplements and assorted preventive healthcare elements. These public services are inefficiently delivered. Drugs account for a small share of costs. And even when they do, patented drugs have an even smaller share. After the Madras High Court judgment, now that Novartis has apparently lost the fight, celebrations on account of public health will be unwarranted. India won’t be any closer to Millennium Development Goals on health.

What has the fight been about? The Novartis patent application was pending and after the third amendment in 2005 the application was turned down (by the Chennai patent office) in 2006 on the grounds that imatinib was only a new form of an old drug. There was no inventiveness. The reference is to Section 3(d) of Indian Patents Act, where we are talking about incremental innovation.

Fourth, patent offices usually don’t know when there is an innovation, incremental or otherwise, and this is where the role of pre-grant third party opposition becomes important. This is what prevented the Novartis patent in 2006. But don’t jump to the conclusion that opposition was for altruistic reasons. Domestic pharmaceutical companies are in it for money just as Novartis is. One element of the Novartis fight was about the case in Madras High Court, where Novartis challenged TRIPs-compatibility of Section 3(d). I haven’t understood the rationale for Novartis filing this writ petition in the Madras High Court. Surely, this was outside its jurisdiction and is a WTO dispute settlement issue. Indeed, that’s precisely what the court has said.

We also have a patent cell in the Intellectual Property Appellate Board and in the second element of the fight, Novartis has challenged the patent refusal decision there.

Fifth, we shouldn’t confuse pricing decisions where fixed costs have to be recouped with those where there aren’t significant fixed costs. Exaggerating a bit, that’s like comparing the costs of making a new Bollywood film with making a DVD. Of course, generics are cheaper and it makes a difference to 7,000-odd Indian patients who use imatinib. Incidentally, if there is a patent, generic manufacturers won’t have to close down, unlike the pre-2005 scenario. Because of a grandfather clause inserted in 2005, they can continue to produce, except that they have to pay reasonable royalties to Novartis.

Sixth, in this heat and dust, we are missing the core issue. Not because of external pressure but because of endogenous reasons and strengths in pharmaceutical research, does India want to protect incremental innovation? As the Technical Expert Group on Patent Law (Mashelkar Committee) pointed out, incremental innovation is not the same as ever-greening. It is bizarre that an IPR report should be withdrawn and go out of circulation because of alleged IPR violation. And we are still ducking the core issue. Do we want to protect incremental innovation because it is good for us, regardless of what WTO, Novartis or the US believes?