WEB EXCLUSIVE, New International Oct , 2012
Cases being heard in Indian courts could ‘open the floodgates’ for pharmaceutical companies to challenge generic drug production and keep prices ridiculously high, explains Nick Harvey.
It’s a worrying time for the poor and the sick. Two cases brought to India’s courts by transnational pharmaceutical companies could massively effect whether people in the Global South can access life-saving medicines. The most significant of these involves Swiss drugmaker Novartis which was refused a patent in India for its anti-cancer drug Glivec (imatinib) and is now challenging the country’s patent law.
‘People are already dying because they can’t get treatment and if Novartis wins things will become worse,’ says Eldred Tellis, who runs a centre for drug users and people living with HIV in Mumbai. ‘They are targeting India because many quality generic drugs are produced here for many people.’
Thanks to India’s 1970 Patents Act, around one-fifth of the world’s generic drugs – containing the same active ingredients as a patented drug but made by a different company at a fraction of the price – are made in the country. As well supplying India’s huge population, these drugs are shipped to poor countries around the world.
‘We source 80 per cent of our global HIVmedicines, as well as other medicines, from India – as do the Global Fund,’ says Michelle Childs, Director of Policy and Advocacy at Médecins Sans Frontières (MSF). ‘So what happens in India can immediately affect other countries and set a precedent for them.’
The problem with patents
Novartis is challenging a clause in the Indian law, ‘Section 3d,’ that prevents drugs being patented that are modifications of existing drugs, a tactic known as ‘evergreening’ used to extend patent periods. The company originally failed to patent Glivec in India as it was discovered before the country was forced to start patenting drugs in 2005. The latest patent application is based on a salt form of Glivec (imatinib mesylate), which, although being easier to absorb, is arguably no more effective.
Studies have found the majority of global research and development (R&D) money is used to produce these minor variations, leading not only to high prices but a lack of genuinely new drugs.
‘About 85 per cent of all new drugs are proven to be little or no better, clinically, than existing drugs,’ says Donald Light, professor of comparative healthcare at the University of Medicine and Dentistry of New Jersey. ‘They are all better than placebo but they are not better than last year’s drug that was better than placebo.’
As these cases move through the Indian courts, the bottom line remains that they could significantly impact access to medicines for the world’s poor.
This is at odds with the pharmaceutical industry argument that the patent system is there to allow companies to receive more money to make new medicines. Producing new drugs is, they say, such an expensive business that only the big companies can afford to do it.
‘These are potentially dangerous substances so you really need to do a lot of research,’ says Mark Grayson, deputy vice-president of Pharmaceutical Research and Manufacturers of America (PhRMA). ‘You need to do clinical trials, even after the drug is on the market; you need production plants to be sterile, drugs need to be safe, all these costs need to be borne and they are not cheap.’
What they fail to mention is that the majority of R&D for developing new drugs is publicly funded. This was the case for Glivec, which was also awarded ‘orphan drug status’ in the US, allowing Novartis to receive tax breaks that paid for a large proportion of the clinical trials.
‘The vast majority of the original research on Glivec came from charities and the government,’ says Jamie Love, Director of Knowledge Ecology International (KEI), an intellectual property pressure group. ‘But at the very end Novartis comes in and gets a patent on it and makes a couple of billion dollars a year.’
These mammoth profits are generated by aggressive pricing. When this court case began in 2006, Novartis sold Glivec for $2,200 per person per month, while the generic version was produced in India for a tenth of that price. That companies could be facing such huge losses to generic competition has wound up the neoliberal press in the US with the Wall Street Journal calling it a ‘drug disaster.’
Countries are allowed by the World Trade Organization to produce generic drugs if there is a major public health imperative, a practice known as compulsory licensing. India issued its first compulsory licence in March, ordering German drugmaker Bayer to allow a generic manufacturer to make its cancer drug Nexavar (sorafenib) for one-thirtieth of the usual $5,000 price tag. India’s patent controller argued that not only had Bayer failed to make the drug ‘reasonably affordable’, it had failed to supply the drug in large enough quantities, a decision Bayer is challenging in the courts.
‘With a patent comes obligations, one of which is you make your medicine available in the quantities needed,’ says Michelle Childs.
Targeting the poor
As these cases move through the Indian courts, the bottom line remains that they could significantly impact access to medicines for the world’s poor. If both Novartis and Bayer win, the floodgates could open for companies to challenge the laws and licences that allow generic drug production.
With the vast majority of profits in the pharmaceutical sector being made in wealthy countries, why are poor countries being targeted so aggressively? The answer, like so many others, relates to inequality. While not currently profitable, poorer countries are seen as ‘emerging markets’ because of their burgeoning middle classes.
Most of the people affected by high drug prices will die knowing nothing about patents, laws, licences or pharmaceutical companies
‘The drug companies see India as a market of 100 million, although that’s less than 10 per cent of the population,’ says Jamie Love. ‘These are the people they care about, as they are the ones with enough money.’
This desire to keep the Indian élite onside may be why Novartis’s chairperson Daniel Vasellareportedly donated hundreds of ancient Indian sculptures to a Mumbai museum last month. But most of the people affected by high drug prices will never visit a museum. And most will die knowing nothing about patents, laws, licences or pharmaceutical companies.
‘The people we work with on the ground have no idea what’s going on right now in the courts,’ says Eldred Tellis. ‘But we do, and we know that Novartis losing is their best chance to live.’
- Novartis argues for Glivec patent at India’s top court – Reuters (drugstoresource.wordpress.com)
- Indian court to hear crucial Novartis patent case on cut-price generic drugs (guardian.co.uk)
- Biomed Analysis: India mustn’t bow to patent pressure (scidev.net)
- ‘India’s patent laws threatening public health considerations in developing countries’: Lancet (sfluxe.com)