[Ip-health] New Scientist: Making Poor Nations Pay for Drugs

[Mike Palmedo]

http://www.newscientist.com/channel/health/mg19325972.800-making-poor-nations-pay-for-drugs.html

Making poor nations pay for drugs

Angela Saini
New Scientist
March 31, 2007

BIG, wealthy pharmaceutical companies get a lot of bad press because of
the aggressive ways they market and lobby for their products. It is more
difficult to hate them, however, once you know how much effort they put
into making new drugs. It takes more than six years to get a discovery
to clinical trials, and 99 per cent of new compounds never make it to
that stage.

Drug companies have been quick to remind everyone of this in the light
of the latest controversy to beset the industry: the legal battle
between the Swiss pharmaceutical giant Novartis and the Indian
government over India's refusal to grant the company a patent for its
leukaemia drug Glivec. "Patents save lives by stimulating research that
leads to innovative medicines," a Novartis spokesman told me. "Only with
effective patent laws can companies make the massive investments that
are vital to medical progress."

The Glivec case has attracted global attention because it could set an
important precedent for drug patents in India and throughout the
developing world. Up to now Indian law has protected only truly novel
medicines, leaving the country's manufacturers free to copy and sell all
other drugs with impunity, often more cheaply than their western
counterparts. They have been so successful in this that India is now a
vital source of generic medicines for millions of poor patients in the
developing world. If Novartis wins, many more drugs could win patent
protection in India, threatening the generic industry's survival.

The key to this case - and to the drug industry in general - is
innovation. The Indian government insists that since Glivec is only a
small improvement on existing leukaemia treatments, it is undeserving of
a patent. Novartis argues that without protection for incremental
innovations like Glivec, it will unfairly lose out on the profits from
its own hard work.

Western pharmaceutical companies have always cited the need to reward
innovation as a justification for stronger patent laws, but in reality
they are not the altruistic hotbeds of innovation they would like to
appear. True, global R&D spending has doubled in less than a decade, yet
the investment has not resulted in many novel cures and treatments. Over
the last decade, the industry appears to have spent more of its energies
and funding on rejigging existing products than on creating new medicines.

In many ways this makes commercial sense. By slightly altering a
chemical compound or varying a drug's delivery system, companies have
helped to build a profitable bank of "me-too" medicines that extend the
patent life of existing ones. This is less risky and expensive than
conducting original research. At the same time, pharmaceutical giants
are spending millions on lawsuits to protect the patents they already own.

As a result, real innovation has been declining for almost a decade. In
2003 the US Food and Drug Administration, which approves new drugs for
the American market, acknowledged that the number of applications from
pharmaceutical companies for "truly innovative products" was on a
downward trend; in 2006, fewer than a quarter were for "new molecular
entities" - novel medicines that had not previously been marketed in the
US. In November last year, the US Government Accountability Office
warned that the drug industry had become "stagnant".

None of this has discouraged European and US pharmaceutical companies
from insisting on tougher patent rules in the developing world - as
exemplified by the Glivec case. India's drug industry has been under
pressure to innovate since the government passed a law in 2005 to
enforce India's obligations under the World Trade Organization's TRIPS
agreement. TRIPS, which stands for Trade-Related Aspects of Intellectual
Property Rights, is designed to encourage innovation by forcing
developing countries to adopt similar patent protection to wealthier ones.

This is a huge challenge for India's drug industry, given its dependence
on generics. Some people see the attempts by western companies to
enforce the legislation as hypocritical and unfair. "They see more
reason to litigate and change laws in their favour than innovate," says
Tahir Amin, an intellectual-property lawyer and director of the
India-based Initiative for Medicines, Access and Knowledge.

It is understandable that the likes of Novartis wish to protect their
intellectual property rights, but there is more at stake. Tighter patent
enforcement in poor countries such as India could derail the generic
drugs industry, leaving millions without the cheap medicines they
desperately need, all in the name of innovation. Is this cost really
justified, especially when the big pharmaceutical companies seeking to
exact it have themselves been innovating less and less?

If companies like Novartis want to encourage R&D in poorer countries,
they should start by setting a better example: litigate less, innovate more.

 From issue 2597 of New Scientist magazine, 31 March 2007, page 20

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu