The Supreme Court of India on April 1 dismissed an appeal by Novartis of earlier decisions denying a patent for the company's blockbuster anti-cancer drug Glivec, sending shock waves through the pharmaceutical industry and the world trade community. Andrea Mead, a spokesman for the U.S. Trade Representative, said they were aware of the decision and were reviewing the Court's order.

Glivec's treatment of certain forms of leukemia was considered so critical that the drug went through one of the fastest approval processes ever in the United States.

This Supreme Court decision ended a struggle that had been closely followed by pharmaceutical companies, humanitarian organizations, and generic drug manufacturers, and had lasted for seven years. It started with the denial of a patent for the drug in 2006 by the Indian patent office. Novartis appealed and lost before the Intellectual Property Appellate Board. The Supreme Court held Novartis had not proved "enhanced efficacy" of the product.

Humanitarian considerations provide a significant undercurrent as this issue begins to take shape. The vast majority of India's 1.2 billion people are not able to afford the drug. While it does not appear from the court opinion that these considerations weighed in their deliberation, they clearly were the motivation for Parliament amending the statute which provided the basis for the ruling. Humanitarian organizations have decried the decision as making patents on medicines desperately needed by the world's poor less likely.

The decision resonated sharply because over 40 countries, including China and Russia, have granted patents for Glivec as an "incremental innovation." These patents are granted for noteworthy improvements on existing products. Now, industry fears the decision may embolden other developing countries to change their patent laws in attempts to protect public health.

Critics of the decision claim that it will hurt pharmaceutical innovation in India by making it more difficult to patent innovations originating there. They also claim Indians will now receive lower-quality copies of Gilvec and other drugs and will be less likely to receive cutting edge products in the future. It is true that generic drugs exported from India have had quality-control problems.

Others maintain that India's pharmaceutical industry is nowhere close to innovation. Its homegrown pharmaceutical companies have, so far, not been nearly as successful in developing new drugs as they have been in replicating other companies' drugs.

Adverse impacts for India's generic industry are certainly possible. The United States is the biggest market for Indian generics and the ruling could lower the chances of Indian generic companies winning contracts in the United States and other developed nations.

At any rate, it is going to take some time for all the ramifications of this decision to sort themselves out.