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Novartis patent controversy: Innovation or predation?

Recently The Supreme Court of India refused patent to the pharmaceutical giant Novartis. Congratulatory messages started coming in from people who believed that the miracle drug would continue to be available for cheap prices to the needy across the world. On the other hand supporters.

By Apr 10,2013  0


Recently The Supreme Court of India refused patent to the pharmaceutical giant Novartis. Congratulatory messages started coming in from people who believed that the miracle drug would continue to be available for cheap prices to the needy across the world. On the other hand supporters of the company and those belonging to the ”Pharma-lobby” flooded the net with messages that do not necessarily auger well with future climate of innovation in India. It was meant to sound as “India is against patents and thus against innovations”. A large section of the society views the case as profit making vs. public good.

Picking a side is not trivial as one has to be careful of several things. Currently large part of innovation happens in publicly funded laboratories and universities all over the world. Being Publicly funded implies that the programs are paid through the government (government funded) i.e. from the pockets of tax-paying citizens across the world. Most of the research with a potential for market then gets picked up and further improved and implemented in the laboratories of various companies. The final products are then sold in the market. The companies usually try to get patents for their final products to protect their investment. One thing to remember here is that these final products are not entirely the creation of these companies. A large part of the prior knowledge on which these products are based, result from publicly funded research programs usually the ones with high risk. Often the reality is “I could touch the sky because I stood on the shoulders of giants”.

Patent is tool to protect one’s intellectual investment. That is to say one’s research and efforts to innovate must be rewarded. Courts all over the world felt a 20 year ‘protection against copying’ (or patent) of the innovation is a long enough time. This allows the company to make up for the investment and also make profits pertaining to their discovery. After which the discovery is allowed to be copied and improved upon by the rest of the world.

In reality, patent as a tool has been increasingly used to establish monopoly of one company over an entire technology. Most companies have gone well beyond protecting their investment for 20 years. Companies have used loopholes in patent laws to establish a practice called ‘evergreening’ whereby they can keep renewing the patent on their original discovery by making small changes to the product. Specially, pharma companies now take a primary drug molecule and make various kinds of crystals (or polymorphs; multiple forms of the same thing) with it. A molecule can crystallize (or acquire a morphology) in various environments without any effect on its inherent chemical/biological behavior. The loopholes in Patent law has allowed them to get a new patent on such new crystals without ever increasing its chemical or biological efficacy. The nexus between legislative bodies and corporations (through extensive lobbying) has not allowed such loopholes to be closed. It allows the primary inventor or the owner (usually a big corporation with a significant lobbying muscle) to continue renewing the patent over a much longer time than the usually stipulated period of 20 years. This allows the company to go on milking the cash cow they created by maintaining a tight monopoly of an older discovery.

One can argue that prolonging patents allows more money for the company to invest in new research; in reality it does not. It primarily allows lawyers and managers to get rich. Just imagine the situation: “I am a successful manager, I manage low paid unskilled workers to use the existing, already well developed technology to my benefit and huge profit–why should I go out of the way to invest in hiring skilled workers (higher paid) and make high risk investment to create a new technology when I can just as well keep milking my cash cow.’’ Its primarily the fear and uncertainty that one day the profits from the old invention would stop coming that drives the companies to innovate and create new future profit makers. Someone has wisely said “necessity is the mother of invention”.

It is utterly important to draw a line between genuine innovation vs. predatory practices. Our legislatures and judiciaries are supposed to do that. We ourselves are primarily responsible for the quality of these bodies which are meant to protect us, the people.

On the other hand small companies and startups are usually the centers of more concrete innovations. Imagine the situation: “I need to innovate and be far ahead of any competition for any chance to survive. If I do not innovate and sell, I will perish”. This is a situation that would really drive anyone to innovate. However, since these companies are small they cannot establish monopolies overnight and rather need to be protected from larger companies who see them as creator of technologies, disruptive to their own model of moneymaking.
In general, large companies and organizations are inherently against breakthrough innovations. Most of them have a certain vision and a significant momentum towards that vision. Any discovery that does not support this momentum is considered disruptive. Needless to say majority of these companies are run not by visionaries or scientists but by managers whose main focus in not innovation but the bottomline. For example in the mid-80s Apple’s maverick founder Steve Jobs got fired from his own company by a CEO (whose previous experience was selling sugared water) over disagreements on following a path of innovation or sustenance. Needless to say, Apple had to see lot of bad days before Steve Jobs came back.

Making technology development platforms cheaper and flexible allows for democratization of innovation which acts as an engine for social growth. Allowing reasonable competition is a very essential ingredient of this mix. Imagine if computers technology and internet were too strongly tied up with patents. Would Windows be the same without Linux? Would you have been able to share your video from your cell phone had there been no competition in the semiconductor manufacturing business and things had not become cheap over time?

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Legislature-Corporation-Government nexus in various parts of the world does not allow capitalism to be a fair game anymore. Somebody needs to referee. I am happy  that The Supreme Court of India decided against a predatory patent and the judges in India, atleast those in the highest court, remain just and impartial. I hope The Supreme Court continues to set the right example both in the letter and spirit.

Author-Dr. Chinmoy Ranjan

P.S. – Chinmoy is a IIT Kanpur alumnus, holds a PhD in Chemistry from Cornell University and is currently working as a Material Scientist at Max Planck Institute in Germany. His interests lie in human empowerment through science and technological entrepreneurship. He believes that people will make right choices/decisions when empowered with right information and tools of innovation.


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