[Ip-health] Letter from Rep. Henry Waxman to Novartis (Rohit Malpani)

[Rohit Malpani]

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February 13, 2007

Daniel Vasella, MD

Chairman and CEO

Novartis

Dear Dr. Vasella:

It has come to my attention that major international health
organizations are deeply concerned about a position Novartis has taken
in litigation in India.  According to these organizations, when a
Novartis patent application was denied, instead of simply appealing the
rejection, Novartis challenged the public health safeguards in India's
patent law.

I do not dispute your right to apply for a patent or appeal a denial.  I
am concerned, however, that your attempt to influence domestic Indian
law could have a severe impact on worldwide access to medicines.

India's robust generics market supplies affordable, essential drugs both
to its citizens and to poor nations around the world.  Its law contains
safeguards designed to preserve a balance between protecting innovation
and promoting public health.  If India is pressured to make its patent
laws more stringent than its obligations under international trade law,
this crucial supply of medicines could be threatened.  Whatever the
outcome of the case, the appeal could have a chilling effect, as
countries contemplating public health safeguards in their patent laws
fear they will be challenged by the pharmaceutical industry.

Because of the profound need for affordable medicines in the developing
world, I am writing to urge you to reconsider Novartis's challenge of
public health safeguards in India's patent law.

India's Generic Industry

Nearly 80% of India's population lives on less than $2 a day.  But the
country has a robust generic pharmaceutical industry that has for
decades provided affordable drugs for its citizens.  The industry also
creates generics for export to most of the world's poor countries, most
of which lack any domestic manufacturing capacity.

It is hard to overstate the role that India plays in manufacturing
affordable drugs for those who most need them.  India exports two-thirds
of its production to developing countries.  Indian companies produce 50%
of the essential drugs UNICEF provides to children worldwide, and 80% of
the antiretroviral drugs that Doctors Without Borders gives to HIV
patients.   Furthermore, all but three of the 36 generic AIDS drugs
approved by the FDA for the U.S. global AIDS program are produced in
India.

In 2005, India amended its patent laws to comply with its international
trade obligations.  Because countries are permitted certain
flexibilities in implementing and interpreting their obligations, India
also included amendments that provide public health safeguards so that
patents do not unnecessarily restrict access.  For example, the new law
does not allow patents for a "new form" of a known substance unless it
demonstrates an enhancement of "efficacy."

The Novartis Case

In 2005, the Indian Patent Office rejected Novartis's application for a
patent for the cancer drug Gleevec.   The rejection was based on India's
legal requirement that new forms of a substance can only be patented if
they demonstrate higher efficacy.  Because a different form of the drug
had already been on the market in India, Novartis would have had to
prove that the new form resulted in enhanced efficacy.  The Patent
Office found that Novartis had not proven this claim.

Instead of simply appealing the rejection, however, Novartis is
challenging the public health safeguards of the law itself.   If
successful, the Novartis position could threaten access to medicines in
India and beyond.

The grounds for the Novartis challenge are questionable.  In 2001, 142
countries, including the United States, declared that international
intellectual property obligations "can and should be interpreted and
implemented in a manner supportive of WTO Members' rights to protect
public health, and in particular, to promote access to medicines for
all."

India's law does appear to protect innovation, by providing for 20-year
patent protection for innovative products.  Moreover, even if India's
patent laws fall short of the wishes of the pharmaceutical industry,
patentholders continue to enjoy stringent protections in the United
States and other wealthy nations, where they make the bulk of their
profits.  Both Indian and non-Indian firms may take advantage of the
patent laws in these wealthy countries, regardless of India's laws.
Your company, for example, reported to the SEC that 84% of net
pharmaceutical sales in 2006 were in the United States, Europe, and
Japan.

Novartis only reinforces this point when it notes that 99% of patients
taking Gleevec in India receive the drug for free because they cannot
afford it.   Such examples of corporate generosity are laudable where
effective and accessible, but reliance on corporate largesse is not a
sustainable answer.  In pursuing the tiny slice of the market with the
money to afford its drugs, Novartis may be threatening future access to
medicines for the vast majority of Indians who live in poverty - and
their counterparts around the world.

Conclusion

Novartis and its colleagues in the pharmaceutical industry should
respect countries' rights to take measures that balance the protection
of innovation and the promotion of public health.  I urge you to
reconsider your position in this case.

                                        Sincerely,

                                         Henry A. Waxman

                                         Chairman