Pharma Patents and Health Care: A Critical Examination of Judicial Response to Novartis Case

Introduction

The right to health as human right paved the way to encourage efforts to optimize the satisfaction of the basic needs of vulnerable people in a sustainable manner and promised to codify as well as to reconstruct them into legal and ethical norms. Health as human right requires that civil society must have democratic participation to capture the essence of the needs and sentiments of people. It conceives the interpretation of health as a judicially enforceable right in every part of the world. At the global level, the institutionalization of health as a human right has found manifestation in international conventions, declarations, and directives. The linkage of health and human rights reference to the understandings that the language of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political, belief, economic, and social conditions. This linkage also attributes to the understanding that the status of health is determined in a large measure of the degree to which human rights are enjoyed.

Any attempt to advance health as a human right must start with addressing the cultural, economic, environmental, political, and the social challenges. Rights are meant to empower and mobilize the vulnerable and the disadvantaged, Conceptual Paper and this should be the main concern of anxiety all over the world particularly in the developing and least-developed countries. Health as a basic and fundamental human right is indispensable for the existence of the other human rights. Both human rights and health are so intrinsically involved with each other that the attainment of the rights is not plausible if an individual cannot take proper care of his/ her health. Each and every human being is entitled to the attainment of adequate standard of health conducive to enjoying a life with dignity.

Most countries in the world have become States’ parties to one or more international human rights treaties, thus creating an obligation by the State to its people towards the realization of the right to health, which includes access to essential medicines. The question here is to what extent the judiciary has enforced this right in practice.

Issues of human rights affect the relations between the States and their individuals, which in turn generate State obligations and the individual entitlements. The promotion of human rights is one of the main purposes of the United Nations. For example, the WHO Constitution of 1946 points out that: “The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, and political belief, economic or social condition” [1].

Article 25(1) of the Universal Declaration of Human Rights (1948) lays down that “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control” [2].

The right to health is also recognized in many other international [3] and regional [4] treaties, especially the International Covenant on Economics, Social, and Cultural Rights of the (ICESCR) of 1966, an international treaty that is binding on the States Parties [5] and provides the foundations for legal obligations under the right to health. In the ICESCR, States parties “recognize the right of everyone to the highest attainable standard of physical and mental health.” In Article 12.2, the treaty lists several steps to be taken by Sates parties to achieve the full realization of this right, including the right to prevention, treatment, and the control of disease, and “the creation of conditions which would assure to all medical service and medical attention in the event of sickness.” Article 12 thus constitutes an important standard against which to assess the laws, policies, and practice of States parties. The implementation of the ICESCR is monitored by the Committee on Economic, Social and Cultural Rights, which regularly issues authoritative but non-binding General Comments, which are adopted to assist states in their interpretation of the ICESCR. In General Comment No.3, the Committee confirms that States Parties have a core obligation to ensure the satisfaction of minimum essential levels of each of the rights outlined in the ICESCR, including essential primary care as described in the Alma- Ata Declaration, [6] which includes the provision of essential medicines. ICESCR General Comment of May 14, 2000, is concerned with access to essential medicines and services as included in Article 12.2 (d), which is consistent with the WHO’s definition of essential drugs in its Action Program [7].

Essential medicines are those that satisfy the priority health care needs of the population. Essential medicines selected with due regard to disease prevalence, evidence on efficacy and safety, and comparative cost-effectiveness. Essential medicines are intended to be available within the context of functioning health systems at all times, in adequate amounts, in the appropriate dosage forms, with the assured quality and it a price the individual and community CA afford. The implementation of the concept of essential medicines is intended to be flexible and adaptable to many different situations, exactly which medicines are regarded as essential remains a national responsibility.

Although the ICESCR acknowledges the limits of available resources and provides for the progressive realization of the right to health including the right to access to essential medicines, States parties have an immediate obligation to take deliberate and concrete steps towards the full realization of Article 12, and to guarantee that the Right to Health will be exercised without discrimination of any kind.

Most countries in the world have acceded to or ratified at least one worldwide or regional covenant or treaty confirming the right to health. For example, more than 150 countries have become States parties to the ICESCR, and 83 have signed regional treaties. More than 100 countries have incorporated the right to health in their national constitution [8]. Some might argue that social, cultural, and economic rights are not enforceable through the courts, and some national courts have indeed been reluctant to intervene in resource allocation decisions of government. Yet accountability and the possibility of redress are essential components of the rights-based approach. Being a State party to human rights treaty that is internationally binding and creates certain state obligations to its people. The question is do governments live up to these binding obligations in practice? If not, do individuals manage to obtain their rights through the judiciary? And if they do, which factors have contributed to their success?

Judicial Response to Public Health in Developing Countries

Hans et al. identified 71 completed court cases from a total of 12 low-income and middle-income countries, wherein individuals or groups had claimed access to essential medicines with reference to the right to health in general or to specific human rights treaties ratified by the government [9]. Of these cases, 59 (mostly from Central and Latin America) could successfully enforce access to essential medicines as part of the fulfillment of the right to health (e.g., constitutional provisions and the human rights treaties) through courts. Fourteen of these 59 successful cases (24%) made their references to international human rights treaties to which the State is party, while the other 45 made references to the right to health as a matter of the national constitution. Human rights treaties were mentioned as a group and to further substantiate the constitutional provisions. The significance of the international human rights treaties is illustrative in the case of Argentina. Argentina’s constitution has no specific provision for right to health, therefore, the Court listed all international treaties that the nation had ratified in support of its ruling for continued life- saving treatment of a child with a blood disease. Most cases were individuals; 27 were public interest cases, and 14 were supported by NGOs. In 61 cases, the social security system or the ministry of health were the defendants. About one-half of the cases were related to potentially life serving treatment of HIV/AIDs. This study demonstrated that access to essential medicines as part of the fulfillment of the right to health can indeed be enforced through the courts. The common success factor remains to be the provisions of right to health in national constitution—that translate as state obligations with regard to health care services and social welfare. Odds of success for those cases have increased when constitutional provisions are combined with international treaties.

From a public health point of view these judgments have both positive and negative implications: on the positive side, judgments in the 59 successful cases increased the availability antiretroviral treatment to patients with HIV/ AIDS, as a testimony to courts’ commitment to human rights’ principles of accountability and redress mechanism; but on the negative side, judgments in the 12 unsuccessful cases, rejection of claims for non-life-saving treatment might have hampered quality of life.

It is not always easy for courts to decide based on individual’s right to health. Ideally, every individual is entitled to right to health, but States shall extend an unlimited access to health care services for all of their citizens in order to fully realize such a right. This requires appropriate legislative measures and mechanics of implementing such measures. But, because public budgets are frequently limited, States are forced to make certain choices under certain circumstances, thereby curbing access in certain circumstances to certain individuals for certain health care services. When the access is thus limited or denied, the courts’ intervention is sought after, pressurizing them to carefully weigh between the available resources and demands for access to health services. Sir Thomas Bingham described this dilemma in Regina v. Cambridge Health Authority, ex parte B (A Minor) [10].

I have no doubt that in a perfect world any treatment which a patient, or a patient’s family, sought would be provided if doctors were willing to give it, no matter how much it cost, particularly when a life was potentially at stake. It would however, in my view, be shutting one’s eyes to the real world if the court were to proceed on the basis that we do live in such a world. It is common knowledge that health authorities of all kinds are constantly pressed to make ends meet. They cannot pay their nurses as much as they would like; they cannot provide all the treatments they would like; they cannot purchase all the extremely expensive medical equipment they would like; they cannot carry out all the research they would like; they cannot build all the hospitals and specialist units they would like. Difficult and agonizing judgments have to be made as to how a limited budget is best allocated to the maximum advantage of the maximum number of patients. That is not a judgment which the court can make. In my judgment, it is not something that a health authority such as this Authority can be fairly criticized for not advancing before the court.

The renal dialysis case in South Africa Soobramoney v. Minister of Health [11] may further elaborate such practical problems for judiciary. In this case, a 41-year- old unemployed male, suffering from chronic renal failure resulting from diabetes, whose life can only be prolonged by an ongoing dialysis treatment, approached a state hospital for his treatment, but the hospital refused him admission to its renal unit following a set policy—that the primary requirement for his treatment was eligibility for a kidney transplant; that the treatment could be administered until a donor was found and the transplant completed. Moreover, a patient has to be free from other significant diseases in order to be eligible for a kidney transplant. Mr. Soobramoney failed to satisfy the requirements for a kidney transplant as he was suffering from other serious diseases such as heart disease. This refusal prompted him to ask for a court order directing the hospital to provide him with ongoing dialysis treatment and restraining the provincial minister of health from refusing him admission to the renal unit of the hospital. The High Court dismissed his application, after which he appealed to the Constitutional Court on the grounds that patients who suffered from terminal illnesses and required treatment to prolong their lives were entitled to be provided such treatment by the State pursuant to Section 27(3) which guarantees the right to everyone not to be denied emergency treatment; and, Section 11, which guarantees the right to life. The Constitutional court refused to order the provision of the treatment arguing that the guidelines had the advantage of allocating scarce resources rationally to ensure that a greater number of patients are cured than would be the case if dialysis machines were used to keep alive persons with chronic renal failures. Justice Sachs opined that [12].

The courts are not the proper place to resolve the agonizing personal and medical problems that underlie these choices. Important though review functions are, there are areas where institutional incapacity and appropriate constitutional modesty require us to be especially cautious … Unfortunately, the resources are limited, and I can find no reason to interfere with the allocation undertaken by those better equipped than I to deal with the agonizing choices that had to be made in this case.

And Justice Chaskalson saw this case was materially different from that of a decision of a two-judge bench of the Supreme Court of India in Paschim Banga Khet Mazdoor Samity and Others v. State of West Bengal and Another [13].

The Constitution envisages the establishment of a welfare State at the federal level as well as at the State level. In a welfare State the primary duty of the Government is to secure the welfare of the people. Providing adequate medical facilities for the people is an essential part of the obligations undertaken by the Government in a welfare State. The Government discharges this obligation by running hospitals and health centers which provide medical care to the person seeking to avail those facilities. Article 21 imposes an obligation on the State to safeguard the right to life of every person. Preservation of human life is thus of paramount importance. The Government hospitals run by the State and the medical officers employed therein are duty bound to extend medical assistance for preserving human life. Failure on the part of a Government hospital to provide timely medical treatment to a person in need of such treatment results in violation of his right to life guaranteed under Article 21.

Judicial Response to Health Care and Patents

Given the aforementioned difficulty in judicial responses to citizens’ right to health under the limited availability of health care services, pharmaceutical patent monopolies further compound the problem of public health. High prices and lack of generics place additional constraints on the access to health care of people, especially who need them the most. Even industrialized countries began seeing it lately. For example, in 2012 the U.S. Supreme Court issued its much-awaited decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. that claims on methods of determining whether drug dosing levels falls under the “law of nature” because such levels are based on levels of metabolite in a patient’s bloodstream, and hence, they were not patent- eligible under Section 101 of the Patent Act of 1952 (35 USC 101) [14]. For a large part, as far as pharmaceutical patents are concerned, judicial response centered around anti-trust laws and patent infringement litigations as a result of certain product modifications and marketing as improvements.

In State of New York v. Actavis plc (Namenda), the Second Circuit became the first appellate court to address product hopping [15], when the State of New York alleged Forest Laboratories, a subsidiary of Actavis plc, for its attempt to remove Namenda IR, an Alzheimer’s drug from the market on two occasions after getting patent for the new drug Namenda XR through 2029. This coercive switch, a tactic of product hopping, was designed to avoid generic competition and monopolize the memantine market. When the exclusive patent for Namenda IR expires in July 2015, Forest Laboratories knew that its sales would go to generics within six months—a period called “patent cliff.” Therefore, the XR version was introduced in 2013 as a “soft switch,” and it was aggressively marketed at discount price through rebates to health plans, and limiting co-payments for the drug. In 2014, the Forest Laboratories faced imminent generic competition for Namenda IR and announced to discontinue the drug beginning August 2014 by serving a notice to that effect to the FDA and the Centers for Medicare and Medicaid Services (CMMS). Production issues caused a delay, and the State of New York sued to enjoin the discontinuation, which prompted Forest Laboratories to agree to a standstill in September 2014. New York also alleged that XR version offered no material benefit to patients over the IR version to justify the switch. The Court, having heard evidentiary hearing from 24 witnesses for five days and reviewed over 1,400 exhibits, found that: (1) withdrawing Namenda IR from the market prior to generic entry forces Alzheimer’s patients dependent on memantine therapy to switch to Namenda XR because it is the only available alternative; (2) the generic versions of IR poised to enter the market in July and October of 2015 will not be AB-rated [16] to XR because they are different strengths and dosages; (3) pharmacists will not be permitted to automatically substitute generic IR for XR, since they both are not therapeutically equivalent; (4) if Forest Laboratories forced Alzheimer’s patients to switch to XR prior to generic entry, those patients would likely not switch back to IR generic due to high transaction costs associated with patients switching formulations; (5) preventing generic IR from competing under state drug substitution laws (under FDA requirements, the Hatch-Waxman Act) would effectively prevent generic entry into memantine drug market; and, (6) in withdrawing Namenda IR from the market, Forest Laboratories’ “explicit purpose” was to impede generic competition and to avoid the “patent cliff”—which occurs at the end of a drug’s exclusionary period when generics gain market share through substitution laws [17]. Based on these, the district concluded that New York raised serious question under Sections 1 and 2 of the Sherman Act, showed a risk of irreversible harm, and the balance of equities favored an injunction. Granting the New York’s request for injunction until July 2015 (i.e., 30 days after generic IR was scheduled to reach the market), the court required that Forest Laboratories continue to manufacture and supply Namenda IR on the 2013 terms, notify the proper channels of IR availability, and avoid other measures that would inhibit generic substitution of IR. Federal Court of Appeals for the Second Circuit affirmed the lower court and found that the product hop was anticompetitive and exclusionary conduct aimed at unlawful continuation of monopoly and that hard switch is an act of coercion [18].

Likewise, the Third Circuit court addressed the product hopping allegations in Mylan Pharmaceuticals v. Warner Chilcott, concerning Doryx, an oral antibiotic of the tetracycline class used to treat severe acne. Both the companies introduced in 2005 a new tablet form of Doryx to replace the incumbent capsule version of the product, for which Mylan, the plaintiff, attempted an AB-rated generic. The capsule version was discontinued and removed from Warner Chilcott’s website. In 2011, Warner Robins obtained approval of subsequent versions of the drugs by changing dosages and scores, which require a new ANDA demonstrating the bioequivalence and pharmaceutical equivalence between the generic drug and the reformulated branded drug in order for the generic to be AB-rated. In each case, Warner Chilcott discontinued the prior versions of the drug. Mylan sought FDA approval of an AB-rated generic for each tablet version of Doryx that Warner Chilcott introduced and alleged that Warner Chilcott’s product hopping prevented it from obtaining FDA approval of generic version that would benefit from automatic substitution. Mylan obtained ANDA approval for the 2008 version of Doryx tablets in February 2012. By then, Warner Chilcott was already marketing the dual- scored 2010 version. Therefore, Mylan sued Warner Chilcott in July 2012 for monopolizing the Doryx market through a continuous pattern of product hopping. The Eastern District of Pennsylvania gave judgment in favor Warner Chilcott, by stating that Mylan made no effort to market the generic drugs and relied solely on automatic substitution—which is anticompetitive injury. When the decision was appealed the Third Circuit affirmed for lack of sufficient direct evidence of monopoly power based on supra-competitive prices or restricted output [19].

The above two examples show a clear contrast of circumstances on which the United States’ judicial response was based. The courts tend to disfavor the hard switch of products or coercion of patients to switch from one version to the other (as in the case of Namenda) while at the same time do not support claims related to anticompetitive injury. The landmark question here is: Can a brand’s robust competition in a broader market, such as therapeutic class, overcome the presumption that a branded drug and its generic equivalents comprise a valid market? Modern antitrust law suggests otherwise; that is, pharmaceutical conduct cases alleging anticompetitive conduct targeted at generics typically define the market around the brand regardless of non- brand competition—the position held by the Federal Trade Commission (FTC) [20].

When it comes to the judicial response from the Indian courts, the Novartis case triggered a hugely polarizing discourse around the world about a key feature of India’s patent regime. The Court ruling had potential impact on millions of people with critical illnesses such as AIDS and cancer, not just in India but across the developing world. Hence, it deserves a detailed examination.

The Novartis Case and Judicial Response

The high-profile Novartis case was the first of its kind to reach India’s highest court, with a history of long and bitter battle over several years, hiring some of India’s most eminent lawyers and finally losing its appeal for unlawful evergreening of a product patent under the nation’s 2005 Patent Amendment Act. Therefore, it is important to know the Novartis, its role in pharmaceuticals, its evergreening attempts and patent office rulings, its appeals over patent office decisions, and judicial responses to each of those appeals as discussed in the following subsections.

Judicial Response: A Critique of Novartis Case

The judicial response to the appeals filed by Novartis AG attracted both accolades and criticism. Some viewed that the Novartis decision clearly raised the bar for granting a patent in India [49]; helps immensely to generic companies like Cipla to produce low-cost versions of Gleevec which enhance the accessibility to essential drugs not only in India but in other developing and least developed countries [50]; the purpose of preserving public health and ensuring access to medicines at reasonable prices would probably be better served by refocusing upon traditional standards of patentability, or by a comprehensive reform of section 3(d) or through the grant of market exclusivity for innovations that neither pass the threshold of section 3(d) nor constitute evergreening; [51] the Supreme Court left open the interpretation of “enhanced efficacy” and the Novartis decision was detrimental to innovation and would likely to harm India’s own growing pharmaceutical industry [52]; the Court in Novartis AG manifested poor understanding of evergreening when it compare the beta crystalline form of imatinib mesylate to distant free-base imatinib because free-base imatinib was not capable of administered as a drug to humans and therefore lacked evergreen potential [53]; and the like.

Drawing lessons from the Novartis court ruling for the Southern African Development Community (SADC), Prof. Ndlovu, faculty of law at the University of South Africa affirmed that [54].

Although the rejection of Novartis’ claims was met with criticism from the pharmaceutical industry as shifting the balance too much in favor of the protection of public health, the fact that the decision gave prominence to public health issues over IP must be celebrated as relevant to the current SADC situation in which law reform is still possible. In the judgment itself, in the course of describing the history IP law in India the Supreme Court said that the Committee under the chairmanship of Justice N. Rajagopala Ayyangar “took a fresh look at the law of patents to completely revamp and recast it to best subser the (contemporary needs of the country.…… The decision in Novartis relating to the interpretation of section 3(d) was well reasoned and concluded [55].

The case provides a good example of how to take maximum advantage of one of the TRIPS flexibilities, namely setting national criteria for patentability. In identifying the source of lessons for SADC from outside the region, it is important to select lessons from countries with socio- economic conditions similar to that prevail in the SADC. India is therefore appropriate as a source of lessons, based on the fact that it is a developing WTO member which most SADC members are likely to use as a source of generic drugs.

In fact, some developing countries have already considered (or considering) adopting patent restrictions similar to those in section 3(d) of India to prevent evergreening and increase accessibility of patients to drugs at reasonable prices. To cite a few examples, Philippines proposed to amend its laws on identical clauses [56]. Brazil Patent Office drafted similar guidelines to restrict patentability on known substances. The Brazilian Patent Reform Report clearly states [57].

The evergreening 2013 Novartis case in India, in which the Indian Supreme Court rejected the grant of a patent for a new form of known substance, evidences how important the implementation of the TRIPS Agreement safeguards can be to a country, and indeed to the world, for India has become the major international provider of affordable generic medicines to the world’s population.

Argentina’s new patent guidelines, as amended in May 2012, exclude treatment methods, new dosages and combinations, polymorphs (as well as pseudo-polymorph— hydrates and solvates) that are considered to be intrinsic property of the substance—therefore mere discoveries and not inventions, single “known” substances such as salts, esters, amides, enantiomers and other derivatives, and new formulations and compounds that do not meet the “non- obviousness” requirement—all from patentability [58]. Mexican Industrial Property Law (IPL) 1991, as amended in June 2010 stipulates that polymorphs must produce extraordinary technical effect compared to already known in order for them to be considered as inventive. Article 19 (VIII) of the law states that the following are not considered inventions [59].

Juxtaposition of known inventions or mixtures of known products, or alteration of the use, form, dimensions or materials thereof, except wherein reality they are so combined or merged so that they cannot function separately or where their particular features or functions have been so modified as to produce an industrial result or their use is not obvious to a person skilled in the art.

Even some of the developed countries, as Linda Lee found, which have no direct counterpart to section 3(d) of India Patent Act, apparently exercise similar constraints indirectly. For example, the U.S. Federal Circuit invalidated a patent on the metabolite of antihistamine drug because the metabolite “necessarily and inevitably” formed upon ingestion of previously patented antihistamine under normal conditions. U.S. also prohibits double patenting, where a patentee cannot hold more than one patent with identical claims; and, under 35 USC 103 nonobvious doctrine, U.S. courts can invalidate certain pharmaceutical claims, as in the case of Pfizer, Inc. v Apotex Inc. where the Federal Court invalidated Pfizer’s patent on hypertension drug on non-obviousness grounds because the active ingredient of the drug was merely a salt form of a known substance [60].

Japan’s patent legislation allows new use of drug to be patented, provided it is absolutely novel over the original with clearly differentiable medical use. For example, if the original medicine is used in the treatment of malady “A” and, after the discovery of a new use, the medicine begins to be employed in the treatment of malady “B”, it characterizes innovation, and therefore, the medicine will have its new legal protection— “clear legal gymnastics and artifices [61].” Shamnad Basheer, a law professor at Oxford University, notice some differences between section 3(d) and the patent laws of the United States and European Union, despite some broad similarities in terms of technology-specific non- obviousness standard. First, this standard under US and EU laws is not limited to therapeutic advantages alone and other advantages may qualify as well, unlike section 3(d). Second, the unexpected results framework under US and EU laws is not dispositive of the issue of whether the derivative is inventive or nonobvious, but a mere presumption. In other words, it could be dislodged upon the production of evidence by the inventor. On the other hand, section 3(d), while not a presumption, is a conclusory legal standard— once it is established that the derivative is not significantly more efficacious than existing substance, it fails the test of patentability. Thus section 3(d) is more of a patent eligibility than a patentability—a requirement that a subject matter for which a patent is sought is inherently suitable for patent protection [62, 63].

Conclusion

The judicial response in Novartis AG has a reverberating effect on patent laws around the world. This would also avoid monopoly by US corporations charging exorbitant prices. While US patent law supports the grant of patent over a new form of uses or combination of known compositions as they have lower level of patentability standards, when compared to Indian patent law, many developing nations have begun raising their patent grant standards similar to those in section 3(d) to safeguard against evergreening and increase patients’ access to life-saving drugs at reasonable prices by increasing opportunities for generic manufacturers to enter the market. As Basheer pointed out, section 3(d) succeeded its toughest litmus test in the aftermath of Novartis’ patent challenge. Indian judiciary endorsed the legality of section 3(d) and upheld the rigorous therapeutic efficacy threshold. The judiciary, while complimenting the efforts of legislature, refused to co-opt into a cozy patent construct engineered by the allegedly more sophisticated patent regimes of developed nations; and, set the trend to other developing nations in a new direction of patent law and intellectual property rights. Professor A. Lakshminath, the former vice-chancellor of Chanakya National Law University, India, summarized this view.

Indian Judicial system has again proved its ability and strength to block all attempts from multinational pharmaceutical gains to cash upon the life of thousands of patients those who have been fighting for their life either in hospital bed or at home. The decision to provide free of cost medicine regardless the company withdraw its charity is another landmark in this direction. Innovation and patent are two separate things. Innovation should be for serving humanity, especially whatever in the field of medical science, patents should not have only one objective to amass profit.