Novartis as a Multinational Pharmaceutical Company - Essay Example

Novartis India Case India’s newly amended patent law received its first challenge when Novartis international AG, a multinational pharmaceutical company whose headquarters is in Basel, Switzerland filed a case in the Indian high court. This came after Novartis’s patent application received a rejection to manufacture Glivec in India on grounds that it did not pass the valuation test (lee 2). Glivec is a new drug invented by Novartis capable of curing chronic complications such as leukemia and cancer. The fact that India is the fastest growing state economically, it is also one of the poorest states because almost 70% of its residents live on less than $2 per day (Lee 2).The Indian patent law draft, implemented in 2005 fully complies with standards of organizations such as TRIPS and WTO (Lee 2). The essay will shed more light on the Novartis AG’s patent issue with the Indian regime, whether drug companies should have multiple patents and if the court’s ruling was called for. In 2006, cancer patients, lawyers and non-governmental organizations convened at the Novartis offices in India, hailing the court’s move of rejecting Novartis’ case where the company had sued Indian patent offices for declining its application to manufacture Glivec drugs (Lee 6). This is because according to health official, by granting Novartis a patent, the drug would become expensive for many people not only in India but also in the entire world. Novartis’ move was not only an appeal against Indian patent offices but also aimed at TRIPS who according to Novartis have an incompatible and unconstitutional section 3(d), a statement that the high court refuted vehemently (Basheer & Reddy 5). Section 3(d), which according to the patents Act states that new substances ought to show greater efficacy to be patentable (Basheer & Reddy 5). Novartis on its part argues that the section be redrafted because some words such as “efficacy” are too general and entail clear definition for better understanding (Basheer & Reddy 5). According to researches so far conducted, Glivec is one of the best drugs ever manufactured by Novartis. Its main role is to treat Chronic Myeloid Leukemia (CML), a disease known to affect approximately 5,000 people in the United States annually (Lee 18). The drug works much better compared to others because it not only dissolves faster but also targets cancer proteins besides being ten times faster and effective (Lee 18). In 1993, Novartis applied for patents in many states globally but not in India because the nation’s 1970 Act never allowed patenting of pharmaceutical products (Lee 18). However, in 1995, after India joined WTO Novartis applied for the patent. Later in 2002, Novartis began to supply Glivec to India freely to patients through the patient-assistance program because most of them could not afford it (Lee 18). Unfortunately, the program was short lived because soon Indian companies began manufacturing their own version of Glivec, which was cheaper than Novartis’. In 2006, Indian patent offices declined to issue a patent to Novartis on grounds that the drug was different from the previous one; hence, the company failed the novelty test (Lee 18). This move prompted it to seek legal address. Novartis filed a case in the high court where it sued India’s patent office for denying them a patent saying that this was not only denying cancer patients a chance to receive proper medication but it also demoralizes ambitions for future inventions. The company also stated that through patients- assistance program, almost 99% of patients in India access the drug without charge (Lee 19). Pharmaceutical companies should not hold multiple patents .This is an inconvenience to other drug manufactures that have to wait for more than two decades before the expiry of the existing patent. This is because a company cannot apply for a patent until the term of the current patent holder expires which normally takes a long period. Multiple patents holding also discourage innovation. Multiple patenting also results to a rise in corruption because apart from multinational firms bribing top officials to obtain patents, these companies could also approach other generic corporations to help them sell some of their products, an approach commonly known as flanking (Dogramatzis 549). The Indian high court’s move to decline Novartis’s patent application was not called for. Instead of declining the patent application, the court through Indian patent offices would have approached Novartis and solved the issue in a more appropriate and logical manner. For example, Indian patent office would have asked Novartis to improve the product in advance instead of waiting for the case to escalate in to an international issue and hence settled in court. This was not only expensive on Novartis because of the amount of money spent on the declined patent application but it also portrayed Novartis in a bad image hence ruining it’s reputation. According to the patent Act, patent application fees are non-refundable hence; this was a big blow to Novartis because apart from losing money it also lost the case against Indian patent office. The high court ruling did not settle the TRIPS issue; instead, it only shifted the venue for jurisdiction (Basheer & Reddy 17). This is because if the same matter were forwarded to WTO, the outcome would be very different because the panel would not have ruled against India (Basheer & Reddy 17). This is because according to TRIPS article 27, it openly stipulates that patents should always be available for inventions provided they are inventive, new and qualify for industrial application (Basheer & Reddy 17). According to the high court ruling, none of these issues was observed. In conclusion, Novartis is a multinational pharmaceutical company whose headquarters is located in Switzerland. In 2006,the company’s patent application in India was declined, a move which raised more questions than answers because the ruling never followed the stipulated rules enacted by TRIPS especially section 3(d) which was violated. The company had applied for a patent to manufacture Glivec, these are drugs commonly known for their ability to cure Chronic Myeloid Leukemia (CML). Work Cited Basheer, Shamnad & Reddy, Prashant. “Ducking” Trips in India: A saga Involving Novartis and the Legality of Section 3(d). 20.2 (2008): Dogramatzis, Dimitris. Healthcare Biotechnology : A Practical Guide. Florida: CRC Press, 2010. Print. Lee, Linda, L. “Trials and TRIPS-ulations: Indian Patent Law and Novartis AG v. Union of India”. Berkeley Technology Law Journal. 23.1 (2014): Read More