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Novartis Expected To Move R&D Out Of India

by Ulrika Lomas, for LawAndTax-News.com, Brussels

22 August 2007


Speaking to the Financial Times this week, the chief executive of Swiss-based pharmaceutical firm, Novartis revealed that the firm would be undertaking further research and development activities outside of India, after an Indian court ruled against it earlier this month, in a dispute over cancer drug, Glivec.

In 2006, the firm was denied a patent for Glivec on the grounds that the drug was not sufficiently innovative. The matter was referred to the High Court in Chennai, which earlier this month dismissed the writ petition challenging the constitutionality of the government's decision to reject the patent application, and deferred to the World Trade Organization to resolve the question of whether the Indian authorities are in compliance with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement.

Commenting on the decision at the time, Ranjit Shahani, Vice-Chairman and Managing Director, Novartis India Limited announced that:

"We disagree with this ruling, however we likely will not appeal to the Supreme Court. We await the full decision to better understand the Court's position."

He continued:

"Our actions advanced this essential debate in India; now local and international leaders in both industry and academia recognize the inadequacies of Section 3(d) and are raising serious concerns about the deficiencies of the Indian patent system."

In an interview with the Financial Times this week, Novartis chief executive, Daniel Vasell revealed the impact of the court decision on the future plans of his company, explaining that:

“This is not an invitation to invest in Indian research and development, which we would have done. We will invest more in countries where we have protection. It’s not a punishment, it’s just a question of the culture for investment. Do you buy a house if you know people will break in and sleep in your bedroom?”


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