Novartis, India face off over patent-protection future there

It is the moment of truth for Novartis ($NVS) and its widely watched patent fight with India. But while this case is over its groundbreaking cancer treatment Gleevec, it will define what kind of intellectual property world drug companies will face there going forward.

The two sides go before India's Supreme Court on Wednesday. The battle has been going on since 2006, when India's patent officials deemed Gleevec unworthy of market exclusivity. Novartis sued, saying India was violating World Trade Organization agreements over patent protections for companies doing business there. The case not only determines the fate of Gleevec and other branded medications--and the patients who need them--but could affect access to HIV drugs and other treatments now produced and sold at low cost.

Drugmakers have been rushing to profit from the exponential growth of the Indian drug market. The Wall Street Journal, citing PricewaterhouseCoopers, says the India drug market is expected to grow to $74 billion by 2020 from $11 billion last year. But the industry has found itself increasingly treading in uncertain territory there. In March, India for the first time invoked its compulsory licensing rules. It gave to domestic drugmaker Natco Pharma the right to make and sell a version of Bayer's cancer drug Nexavar--despite the fact that Nexavar is still on patent. Natco will pay a 6% royalty, but given it charges only $170 a month, compared with Bayer's $5,000 a month price, Bayer stands to earn very little. Cipla has said it will offer a version of the drug at $130 a month.

On the flip side of the battle, advocates for getting cheaper generic medications to the poor majority worry that if Novartis wins, it will mean patents will resume for many HIV medications, yanking them from the grasp of poor Indians. Generics producers there have helped drive the cost of HIV medicines down from $10,000 per patient a year to $150--and now supply 80% of the HIV drugs that the country uses.

But Novartis contends that if drug companies have no protection for their intellectual property they won't bring groundbreaking drugs to India, ultimately hurting the population more.

Both Gilead Sciences ($GILD) and Roche ($RHHBY) also have cases under appeal, The Wall Street Journal reports, over similar patent issues. 

- read the WSJ story

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