Does India's Glivec Decision Make April Fools of Us All?

On April 1, India’s Supreme Court denied an appeal challenging the rejection of a patent for Novartis’s cancer drug, Glivec. The drug is a life-saving medicine for certain forms of cancer, patented in nearly 40 other countries - including many which are not noted for the strength of their intellectual property rights, such as China, Russia, and Taiwan.

Critics of the IP system have hailed this decision as a victory for patients and as likely to improve access to the medicine. In fact, the majority of patients currently taking Glivec in India will continue to receive the drug free of charge through corporate Oncology Access programmes. Yet the consequences of the ruling are damaging for India’s economy as well as for the process of creating other life-saving treatments which future patients may need.

Even before the current ruling on Glivec, India already had a low level of intellectual property protection, and not just for pharmaceuticals. A country’s IP environment is important for trade, investment and economic development. Indeed, a growing body of academic and policy research now emphasises the link between economic growth, technology transfer and stronger IPRs. OECD research, for example, has found strong links between IPRs and FDI, R&D and economic expansion. And IPRs have particular importance to the field of biomedical research, so the Indian Supreme Court’s decision is now likely to make the country a less attractive prospect for future bio-medical investment.

According to research conducted by Pugatch Consilium and published in Scientific American, India demonstrates a limited ability to compete with other countries for biopharmaceutical investment, based on a range of measures including scientific capabilities and infrastructure, clinical environment, manufacturing and logistics, regulatory framework, healthcare financing and overall market conditions. As compared to Denmark, the most competitive country surveyed (scoring 83.2), India scores only 67.3 points on the index, putting it below Israel and Poland.

A complementary piece of research shows that strong IPRs encourage pharmaceutical R&D and investment as measured by clinical trials. Based on a study published in the Journal of Biotechnology, India already has one of the lowest levels of clinical trials per capita, falling below South Africa, the Philippines, China, and Chile and well below the UK and USA. This is likely to worsen as a result of the Supreme Court decision, which weakens India’s IPR environment still further.

The simple equation promoted by activists that high prices on patented drugs deny the poor access to medicines provides a morally compelling soundbite but the reality is that weakening IPRs, as India is now doing, will not help alleviate that poverty and nor will it help India to create the medicines of the future. Instead, India’s latest decision and others like it, will only make April fools of us all.