India's Supreme Court today rejected drugmaker Novartis AG's attempt to patent a new version of a cancer drug in a landmark decision that health activists say ensures poor patients around the world will get continued access to cheap versions of lifesaving medicines.

Novartis had argued that it needed a patent to protect its investment in the cancer drug Glivec, while activists said the company was trying to use a loophole to make more money out of a drug that did not have a patent. The decision has global significance since India's generic drug industry, pegged to be valued at $26 billion US, supplies much of the cheap medicine used in the developing world.

Pratibha Singh, a lawyer for the Indian generic drug manufacturer Cipla, which makes a version of Glivec for less than a tenth of the original drug's selling price, said the ruling sets a precedent that will prevent international pharmaceutical companies from obtaining fresh patents in India on updated versions of existing drugs.

The court ruled that a patent could only be given to a new drug, she told reporters outside the court.

"Patents will be given only for genuine inventions, and repetitive patents will not be given for minor tweaks to an existing drug," Singh said.

Novartis called the ruling a "setback for patients," and said patent protection is crucial to fostering investment in research to develop new and better drugs.

Ranjit Shahani, the vice-chairman and managing director of Novartis India, said the ruling "will hinder medical progress for diseases without effective treatment options."

He said the court's decision made India an even less attractive country for major investments by international pharmaceutical companies.

"Novartis will not invest in drug research in India. Not only Novartis, I don't think any global company is planning to research in India," he said.

Court battle began in 2006

The Swiss pharmaceutical giant has fought a legal battle in India since 2006 to patent a new version of Glivec, which is mainly used to treat leukemia and is known as Gleevec outside India and Europe. The earlier version of Glivec did not have a patent, because it was introduced into India before the country adopted its first patent law in 2005.

India's patent office rejected the company's patent application, arguing the drug was not a new medicine but an amended version of its earlier product. The patent authority cited a provision in the 2005 patent law aimed at preventing companies from getting fresh patents for making only minor changes to existing medicines — a practice known as "evergreening."

Novartis appealed, arguing the drug was a more easily absorbed version of Glivec and that it qualified for a patent.

Anand Grover, a lawyer for the Cancer Patients Aid Association, which led the legal fight against Novartis, said the ruling Monday prevented the watering down of India's patent laws.

"This is a very good day for cancer patients. It's the news we have been waiting for for seven long years," he said.

Aid groups, including Medicins Sans Frontieres, have opposed Novartis's case, fearing that a victory for the drugmaker would limit access to important medicines for millions of poor people around the world.

Glivec costs $2,600 a month. Its generic version costs about $175 per month.

"The difference in price was huge. The generic version makes it affordable to so many more poor people, not just in India, but across the world," said Y.K. Sapru, of the Mumbai-based cancer patients' association.

"For cancer sufferers, this ruling will mean the difference between life and death. Because the price at which it was available, and considering it's the only lifesaving drug for chronic myeloid cancer patients, this decision will make a huge difference," Sapru said.

'Abusive' patent practice will end, activist says

Leena Menghaney of Doctors Without Borders said India would continue to grant patents on new medicines.

"This doesn't mean that no patents will be granted. Patents will continue to be granted by India, but definitely the abusive practice of getting many patents on one drug will be stopped," Menghaney said.

The judgment would ensure that the prices of lifesaving drugs would come down as many more companies would produce generic versions.

"We've seen this happening with HIV medicines, where the cost of HIV treatment has come down from $10,000 to $150 per year. Cancer treatment costs have come down by 97 per cent in the case of many cancer drugs," Menghaney said.

"This decision is incredibly important. The Supreme Court decision will save a lot of lives in the coming decades," she said.