India's Supreme Court rejected drug maker Novartis AG's attempt to patent a new version of a cancer drug Glivec, in a landmark decision that healthcare activists say ensures poor patients around the world will get continued access to cheap versions of lifesaving medicines. (Rafiq Maqbool/AP)

India’s Supreme Court on Monday rejected a Swiss pharmaceutical company’s effort to patent an updated version of its cancer drug, a decision aimed at boosting a domestic generic drug manufacturing industry that supplies cheap versions of lifesaving cancer and HIV medicines for much of the developing world.

In a case closely watched by global drugmakers, Switzerland’s Novartis AG has been fighting since 2006 to patent its leukemia-treating drug Glivec in India on the grounds that it is a newer version. India revised its patent protection law in 2005.

The company challenged a clause in the Indian patent law that restricts multiple patents for a drug and denies such protection for newer versions of a “known substance” in already patented medicines unless they are significantly more efficacious.

Patents for amended versions of drugs can be granted in the United States.

But in a landmark judgment that is likely to set a legal precedent for future patent claims, India’s Supreme Court said the beta crystalline form of the salt called imatinib mesylate in the drug fails the test of “invention and patentability.”

“The Supreme Court has said that product was known prior to 1995, and a new patent cannot be granted because it is just a little modification on the old one,” Pratibha Singh, a lawyer representing three Indian drug companies in the case, told reporters in New Delhi. “This means that patents would be granted for only genuine inventions, and repetitive patenting will not be allowed. The court held that merely because it [the new version] is more soluble or more stable, it doesn’t qualify by itself for patent protection.”

Many international drug companies have said that the Novartis trial was crucial to addressing the rapidly growing perception around the world that India’s patent protection system for drugs is weak. Such perceptions, many patent advocates say, will adversely affect foreign investment in India, especially by global drug companies that are eyeing the huge market in this nation of 1.2 billion people.

The U.S. Chamber of Commerce said the ruling casts doubt on future innovation and investment. India ranked last in indicators for intellectual property environment worldwide in a study conducted by the U.S. Chamber’s Global Intellectual Property Center.

In recent months, other Western pharmaceutical companies have been facing similar patent-related setbacks in India.

Last month, an Indian patent appeals panel allowed an Indian company to sell a cheaper, generic version of Bayer AG’s anti-
cancer drug Nexavar. Last year, India revoked a local patent granted to Pfizer’s cancer drug Sutent, and the company is seeking to have the decision reversed.

In a statement, Novartis said Glivec has never been granted an original patent in India. The drug is patented in nearly 40 countries, including China, Russia and Taiwan.

“We will continue with our investments in India, even though cautiously,” Ranjit Shahani, managing director of Novartis India, said at a news conference. He said the company in 2005 moved its investment in drug research to China, where manufacturers find conditions more favorable.

“This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options,” Shahani said.

The issue of affordable medicines is politically sensitive in India, where 90 percent of the drugs sold are generic versions.

Health activists and Indian drug companies have argued that most Indians cannot afford expensive patented drugs such as Glivec, which costs more than $2,200 per patient for 30 tablets a month. The generic version sold in India costs about $175 for the same dosage.

Novartis said about 16,000 Indian patients received Glivec free under the company’s assistance program.

The verdict is a huge boost for India’s $26 billion generic drug industry because Indian firms produce 20 percent of global generic drugs. Health activists say that 80 percent of the world’s nearly 8 million HIV-infected patients rely on Indian generic medicines. India is often called “the pharmacy of the developing world.”

Y.K. Hamied, chairman of the Indian generic drug company Cipla, said the decision represents a victory for patients in India and abroad.

The international medical aid group Doctors Without Borders said the decision prevents companies from abusing the patent system to “block price-busting generic competition” on lifesaving drugs.

“The verdict means that India can actually have safeguards against abusive patenting practices like evergreening, where companies keep seeking patents for the same drugs using arguments like new dosage and pediatric versions,” said Leena Menghaney, an Indian campaign manager for Doctors Without Borders.

“Indian companies will now have the freedom to produce cheaper drugs without fear of constant lawsuits from Western pharma companies,” she said. “This verdict will have a chilling effect on secondary patents and suits. If we had lost this case today, the question before us was how many drug companies would go back and reopen their cases for patents.”

When the Indian Parliament discussed the patent law in 2005, some lawmakers called for the introduction of a clause that would deter the “evergreening” of patents by drug companies. Lawmakers even cited Glivec to bolster their demand for such a measure.