The Supreme Court on Monday rejected pharma giant Novartis AG’s plea to preserve its patent over a life-saving cancer drug, Glivec, drawing a huge sigh of relief from thousands of patients in India and in dozens of developing countries as the fear of an almost 15-fold escalation of drug costs receded. It is the biggest setback for multinational pharma companies, which have been denied patent protection for a series of life-saving drugs in recent years.

Invented in 1991, Glivec is a miracle cure for a type of blood cancer called chronic myeloid leukemia (CML). In this form of cancer, certain bone marrow cells go rogue and produce excessive white blood cells, causing mild fatigue and hip pain initially, but slipping into an out-of-control crisis of zooming platelet and white cell counts. It used to be fatal, but with Glivec, the survival rate is over 95%. Imanitib, the active component, is on the National Essential Drugs List in India.

Novartis, which reported net profit of $9.6 billion in 2012 on sales of $57 billion, criticised the verdict.

T he SC’s decision has come as a big blow to MNCs’ ability to sell lucrative medicines in the country. The main beneficiaries of the ruling will be companies like Cipla, Natco Pharma and Sun Pharma which already market generic Glivec at a fraction of the cost of Novartis product. The ruling cements the role of domestic companies as major suppliers of inexpensive generics not only to its Rs 70,000-crore domestic market, but also across the developing world, and further establishes India as a “the pharmacy of the world”. “This (Supreme Court) ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options,” Novartis India vice chairman and managing director-Ranjit Shahani said on Monday.

When the drug was first commercially sold in 2001, India was moving over from the old patent regime to a new one after signing the international trade and patent related agreements in 1995.

The new patent law came into force in 2005. Novartis could not get a patent on Glivec as it dated from an earlier time when a different patent law prevailed. It tried but the patent tribunal rejected the claim in 2006.

After going through various appeals, Novartis ended up in the apex court pleading that a crucial section 3 (d) of the new patent law was not applicable to Glivec. This section says that just discovering a new form of a substance is not enough to grant a patent, if it does not enhance its “known efficacy”.

Novartis was arguing that a new “beta crystalline” form of Glivec is more effective and hence qualifies as a new invention, and hence should get patent protection.

The Supreme Court, in a 112-page analysis of all the claims and counter- arguments disagreed. It said that the beta crystalline form was nothing new. It has always existed in the original amorphous form.

The landmark judgement means that Indian companies like Natco and Cipla can continue making and selling Glivec, not only for India but to most third world countries.

Monday’s Supreme Court judgment dims hopes for some other pharma giants fighting legal battles on patents. Pfizer's cancer drug Sutent and Roche's hepatitis C treatment Pegasys and Merck & Co's asthma treatment aerosol suspension formulation lost their patented status in India last year, decisions the companies are fighting to have reversed.

Many pharma giants are concentrating their legal fire-power on India because it is an $11 billion a year market growing at 13-14 percent annually. Equally important is that India has emerged as the ‘pharmacy of the world” selling over $26 billion worth of cheap generic (non-patent) drugs to most of the poor and still developing countries.

It is estimated that about 80% of the HIV/AIDS patients in the developing world are surviving because of cheap Indian drugs.