The ruling comes close on heels of the country’s Intellectual Property Appellate Board (IPAB) revoking Roche’s patent for Hepatitis C drug, Peginterferon, and going by experts the two rulings put together are bound to lend an advantage to leading generic (affordable) drug makers like Ranbaxy and Cipla.

In the Novartis versus generics drugs case, the legal wrangle lasted seven arduous years till the apex court upheld the IPAB’s contention that the modified version of Glivec was indeed neither an invention nor greatly different from its earlier form.

The verdict is seen as one hailing the role of pharmaceutical industry’s role in the country as a maker and supplier of low cost drugs to the world and this was the primary reason the court felt every bit responsible to curb any tendencies of “ever-greening” (obtaining new patents on old compounds).

Novartis’ line of argument was that Glivec is a patent drug in 40 countries and is mostly given free of charge to patients under its patient assistance program.

But considering the fact that the program, however well intended, cannot serve a country of more than a billion people and there is every possibility of the branded drug’s monthly dosage to cost more than a hundred thousand rupees.

This means use of its generic form that costs less than Rs.10, 000 would be more preferred especially by the poor.

Welcoming the verdict was Doctors Without Borders (Medicines Sans Frontier) that depends largely on generics from India for worldwide operations and its International President, Dr. Unni Karunakara remarked, “This is a huge relief for the millions of patients and doctors in developing countries who depend on affordable medicines from India, and for treatment providers like MSF. The Supreme Court’s decision now makes patents on the medicines that we desperately need less likely. This marks the strongest possible signal to Novartis and other multinational pharmaceutical companies that they should stop seeking to attack the Indian patent law.”

Similar sentiments were echoed by Indian Pharmaceutical Alliance and Indian Drug Manufacturers’ Association and even Glivec’s developer, Dr Brian Druker, director of the Oregon Health and Science University Knight Cancer Institute, who had collaborated with Nicholas Lydon of Novartis on the project.

Several times in the past Druker is known to have criticized pharmaceutical majors’ predatory pricing.

It was in the 1970s when India’s generic-drug industry sprang into life and the government started allowing multiple patents to be given for modified products.

Gradually over the years the industry enormously expanded and presently supplies a fifth of the world’s generics.

Then in 2005 drug patents were adopted into the country’s legal framework that was in compliance with World Trade Organization (WTO) norms.

The latest Indian ruling may encourage more developing nations to follow suit though with regard to public interest safeguards other nations like The Philippines and Argentina have patent legislations similar to India’s and those like Indonesia, Thailand, Brazil, Malaysia, Zambia, Cameroon, Ecuador, and China have adopted compulsory licensing as granted by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.

However, not everyone is pleased as punch as big pharmaceutical firms and their advocates, eyeing to partake of the country’s market believed to present a potential of over $74 billion in sales by 2020 from $11 billion in 2011 (going by estimates by study of Pricewaterhouse Coopers and Confederation of Indian Industry) at present, may face reduction in their commercial incentives or may even decide not to introduce cutting edge medicines in India as was announced by Novartis immediately after its legal defeat.

Yet a quick look into R&D expenditure by pharma-multinationals in India over the past decade shows that investments have been most minimum (only 5-6 percent of their revenues) and then most of this has been on research in their generic business rather than in the way of creation of new drug molecules.

While in 2012 Novartis India expended Rs. 3,000,000 on R&D, 0.03 percent of its net sales, in 2003 it was just about Rs. 0.01 billion.

And Pfizer’s R&D spend was Rs. 0.07 billion (0.6 percent of net sales) in 2011-12 as compared to Rs. 0.19 billion (3.4 percent of net sales) in 2001-02.

Therefore the warning that the ruling would blow away any innovation and research investment does not seem strong enough to make space for near future re-interpretations of the law.

A study by Confederation of Indian Industries and Pricewaterhouse Coopers reveals that the Indian medicine market is 14^th largest in terms of value and third largest in volume despite the slowing down of the economy, which means the pharma MNCs are in no position to ignore emerging markets.

Amit Backliwal, South Asia Operations Head of IMS Health, points out, “Though the market has brought in only 5 percent sales to innovative patented drugs, still India is too big to ignore. Companies will definitely get cautious, and it definitely means a change in their business models, but I don’t think they will pull out.”

A possible solution for these firms would be to frame new business models such as differential pricing, as prevalent in other sectors, in association with Indian counterparts to remain commercially viable and successful.

A case in point is Roche Holding that has come up with plans to in place cut-price versions of two blockbuster cancer drugs in alliance with Indian generics firm Emcure Pharmaceuticals.

GlaxoSmithKline Plc is another example where U.S. $900 million will be invested in expanding consumer healthcare subsidiary.

For that matter Novartis has also enlarged its stake in over-the-counter remedies and branded generics apart from innovative medicines.

IMS Health forecasts a big rise in non-prescription sector leading to market growth of about $24-34 billion by 2016 thereby pushing the country to 8^th spot from 14^th in the global league table.

“So it is up to them (read pharma-MNCs) to decide on India. Don’t forget, India is a large market, a country of 1.2 billion,” states Raghunath Mashelkar, former director general of Council for Scientific and Industrial Research and framer of Intellectual Property policies of the country.

The only catch that experts say India may need to avoid is the slew of Free Trade Agreements that are yet to be concluded with many developed world.

With most of the pharma majors based out of Western nations, the Indian Finance Minister P. Chidambaram is actively engaged in wooing foreign investors and harping on the government’s commitment to simplify investment, the lobbies of pharma-majors may try a trick or two to exert influence on Indian government.

Pending Cases. There have been instances of tacit Indian encouragement of generic manufacturers in recent past.

Mumbai-based Glenmark has been selling two popular anti-diabetic drugs that are copies of the ones manufactured by innovator U.S.-based MSD Pharma, third-largest pharma firm globally by revenues.

The matter is still in the Delhi High Court even as sources state that the Indian firm gone ahead with its plans to capture the Indian anti-diabetic market with its drugs, priced 20 percent less than the branded version.

Another generic drug firm, Cipla continues to sell anti-cancer drug Nexaware while innovator, Bayer has filed legal suits for patent infringement.

The verdicts in these pending cases will show how the courts and patent offices of the country impact drug innovation, healthcare system and business based out of these.

Kiran Mazumdar-Shaw, chair of Biocon, categorically said, “The world has given too many frivolous patents and India should veer away from that. But we should also not get carried away and create an atmosphere hostile to innovation.”