From Glivec to Januvia and the Indo-EU FTA

The world had barely digested and dissected the Supreme Court (SC) verdict on Novartis’ Glivec when Glenmark fired another salvo by launching generic versions of Merck’s Januvia and Janumet. Riding on the sentiments of the SC verdict against Glivec, the Delhi High Court (HC) refused interim relief to Merck. The HC allowed the MNC to proceed with its infringement case and set the date for July 16.

Glenmark’s challenge expands the patent battle from expensive anti-retrovirals and anti-cancer drugs to the much more modestly priced anti-diabetes segment. Its peers have restrained themselves from tilting at this windmill for two main reasons. Firstly, the public interest angle might not work in this case as the Glenmark’s versions, Zita and Zita Met, offer at best a 30 per cent savings. Secondly, the US is the biggest market for Indian generic companies and many would have been anxious not to antagonise this nation any more.

It is also interesting to note that one of Glenmark’s peers, Sun Pharma, is a co-plaintiff in the case against Glenmark, because it has a license from Merck to sell these drugs as its brands Istavel and Istamet.

Some industry observers also foresee a renewed demand from MNCs to link patent grants with marketing approvals as a reaction to this case.

For all these reasons, the progress of the Glenmark-Merck tussle for the rights to sitagliptin phosphate will be closely followed by both generic and innovator companies. If Glenmark wins, then it could open the floodgates to many more such challenges as it could mean that the courts are willing to concede public interest even if the price difference is not too much. In fact, Merck’s counsel quoted the SC verdict on Novartis to underline this fact.

However, Glenmark is not arguing the case on just the pricing and public interest front. Its counsel has argued that its products do not infringe the innovator’s product as Merck’s patent is for sitagliptin hydrochloride only and not for sitagliptin phosphate. Quoting Paras 139 and 156 of the SC verdict on Novartis/Glivec, Glenmark argued that “coverage in a patent cannot be permitted to go much beyond the disclosure made by the patentee”.

Merck’s counterargument was that since sitagliptin was the invention and sitagliptin phosphate was merely a derivative, it wasn’t eligible for patent protection under Section 3(d). On this argument, it seems piquant that Glenmark seems to be using Novartis’ argument that its salt of imatinib mesylate was a different compound from the original and therefore deserved a separate patent.

Section 3(d) is the cornerstone of these debates and industry observers are hoping that a similar safeguard can be inserted into the Indo-EU Free Trade Agreement (FTA) as well. Non-profit organisations involved in supplying affordable medicines and patient groups, both in India as well as globally, are protesting the haste with which the current Indian government wants to seal the deal. The Bilateral Trade and Investment Agreement (BTIA), between the EU and India, has been in discussion since 2007 but has consistently been delayed due to mounting opposition.

Leaked drafts of the FTA have alarmed agencies like Oxfam, Médecins Sans Frontières (MSF), the Stop AIDS Campaign, Health Action International (HAI) Europe and Act-Up Paris because the EU seeks to impose stricter IP regimes in developing nations.

While clauses related to counterfeiting were dropped after worldwide protests, other contentious clauses remain. For example, a HAI statement points out that the FTA still includes provisions that could block the production and export of generic medicines from India, allow medicines to be delayed, seized, detained and destroyed.

Similarly, measures on investment could see the Indian government—as well as third parties, like treatment providers such as MSF—sued by MNCs if national laws, policies, court decisions, or other actions are perceived to interfere with their investments. For example, the recent SC verdict against Novartis too could invite such legal action from aggrieved MNCs once India signs the FTA in its current form.

The last hope seems to be India’s very vocal Left parties, like the CPI(M) which has released a strong statement accusing the government of rushing through the FTA without discussion. and the ruling UPA-2 is worried that if it cannot push it through this month, it will lose the opportunity.

The CPI(M) statement argues that the agreement is likely to worsen the already burgeoning current account deficit and trade deficit. They also cite the agreement with Singapore as evidence that trade agreements further worsen the country’s trade deficit, converting a trade surplus into a deficit after the signing of the FTA.

It was thanks to the efforts of the Left that section 3(d) came into existence in March 2005 as the UPA-1 needed its support to push it through within the deadline. With the UPA-2’s allies getting shriller by the day, they seem to realise that they will have to move into election mode post June and hence the haste to push the FTA through this month.

The Left parties, combined with pressure from patient groups and global aid organisations, will have to create enough noise so that the FTA is delayed or the clauses dropped. Luckily, the pharma industry is not the only affected industry; the agriculture and dairy sectors too are worried that subsidies on EU goods could wipe them out.

As this battle plays out, it’s clear that if it were not for coalition politics we would not have had room for debate. One more reason to end monopolies; both in politics as well as industry.

Viveka Roychowdhury
Editor

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