[Ip-health] Lisa Conte in Huffington Post on Novartis Case

[Mike Palmedo]

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[ Picked text/plain from multipart/alternative ]
http://www.huffingtonpost.com/lisa-conte/pharma-industry-be-happy_b_42827.html

Pharma Industry, Be Happy--Somebody Cares

Lisa Conte
Huffington Post
March 7, 2007

An Indian court case is once again pitting western pharmaceutical companies
against the lives and health of poor people in the developing world.
"Quarter of a million people urge Novartis to drop case against India,"
reads a January 29, 2007 press release from Doctors Without Borders.

Inflammatory headlines and angry NGOs anxious to bash big pharma proclaim
that greed and inhumane practices are the pattern for the multi-national
drug monopolies.

They remind us how Novartis sued Nelson Mandela in 1997 for signing a law
that allowed South Africa to import cheaper HIV-fighting medications. These
destructive battles are the predictable and unnecessary results of
shortsighted pharmaceutical industry strategies in the developing world.

Big pharma's choice to argue for an overbroad interpretation of their
patents make it easy to portray them as profiteers who restrict delivery of
crucial medicines to the developing world. It doesn't have to be that way.
Intellectual property rights and access to affordable medicines in less
developed countries are not mutually exclusive.

Some background:

Novartis has a leukemia product called Gleevec. In 2006, the drug had sales
of about $2.6 billion. Novartis sells the drug in India for $26,000 per year
per patient. Several Indian companies can provide Gleevec for one tenth that
price.

India has long had a reputation for producing cheap drugs largely because
its prior patent structure did not directly cover pharmaceuticals. Two years
ago, in connection with joining the World Trade Organization, India
introduced patent protection for drugs. The law protects completely new
compounds that were invented after 1995 and provides patent extensions for
existing drugs based on additional invention so long as the innovation is
genuinely new and improves drug effectiveness.

Novartis filed for a patent that extends exclusive rights to sell a modified
version of Gleevec in India beyond the original patent. India denied patent
extension on the basis that the modified drug was neither new nor more
effective.

Novartis appealed the denial to the Chennai High Court arguing, "improving
Indian patent law helps patients and societies" because it emboldens and
enables Indian-based pharmaceutical companies to innovate new medicines
themselves - and protects the incentive for such innovation by rewarding
exclusivity to provide return on investment.

Nobody disputes that R&D for new drugs is a long, risky and expensive
enterprise that requires the market exclusivity that patents provide to
assure an adequate return on investment. But in a process known as
"evergreening" big pharma obtains extensions on patent life with medically
irrelevant patent "tweaks" contrived to endlessly extend the company's
monopoly.

Contrary to Novartis' paternalistic claim of benefit, the Indian
Pharmaceutical Industry Association strongly supports the Indian patent
office requirement for demonstrated effectiveness as a condition for
granting patent extension. The Indian civil system is giving robust support
to the enforcement of the country's clear-cut and sensible IP rights. And
the system is working. Despite Novartis' claims that India's narrower patent
protection provides inadequate incentives for design and research, Indian
pharmaceutical companies are heavily invested in research on new drug
discovery and development.

The bad news for big pharma is that Indian companies are providing Gleevec
for one-tenth the $26,000 per year that Novartis charges in India. Novartis
wants to shut down Indian production arguing that poor populations can still
receive drugs including Gleevec because the drug industry often donates such
drugs to most patients free. But philanthropy is neither a sustainable
business model nor a workable answer to global access to life-saving
medicines.

Now the good news. About 80% of the world's population including
India's 1.3billion people live in non-western territories. The math is
simple:
one-tenth the price sold to eight times the population--provides the basis
for a healthy return on investment. Local pharmaceutical companies in
emerging economies, such as India, Brazil, China, South Africa, etc., have
already figured out that there's big business in serving large populations
with an affordable product. Big pharma needs to jump on the gravy train.

Big pharma needs to abandon the destructive confrontation and long legal
battles pushing an overbroad interpretation of its patent rights and move to
a model that combines profit with compassion. Most importantly, they should
recognize and harness the value of large populations caring.

Novartis and its peers in the pharma industry should partner with industry
in developing cost-scaled markets within the world's emerging economies. If
the big companies can't yet stomach a business model of large volumes of
patients from the non-traditional western pharma population, they should
find local licensees who understand the business model and want to serve
that population. So long as the local licensees are making money (and why
else would they be in this business?), the licensors will profit from
royalties, margin on manufacturing, additional cost savings from benefits of
scale, etc.

The result will be that millions of people will once again appreciate the
pharmaceutical industry for saving lives rather than only knowing the
industry through headlines that portray it as greedy, heartless, and
imperiling the lives of the planet's poorest victims.