[Ip-health] Colombia Threatens to Override Novartis’s Patent on Gleevec
zack.struver at keionline.org
Fri May 20 12:18:25 PDT 2016
Colombia Threatens to Override Novartis’s Patent on Gleevec
Government says it will issue a compulsory license unless Novartis agrees
to a lower price for the cancer drug
By KEJAL VYAS
May 20, 2016 2:48 p.m. ET
BOGOTÁ—Colombia’s government will override Novartis’s patent on a cancer
medication by the end of May and open it up to generic manufacturers unless
the Swiss pharmaceutical giant accepts a price cut, the country’s health
minister said Friday.
Citing severe strain on its universal health-care budget, Colombia says it
needs to break Novartis’s monopoly on imatinib by issuing a compulsory
license, an exception to a patent when deemed a matter of public interest.
The government says it plans to make the drug—marketed as Gleevec or Glivec
for use against leukemia—available at a cheaper price, with or without the
consent of Novartis, despite what the Health Ministry says has been
international pressure against the move.
“Technological pressure and high drug prices have brought the health-care
system to a financial crisis,” Alejandro Gaviria, the health minister, said
in an emailed response to questions. “Colombia is a paradigmatic case of a
middle-income country, with a growing health system and with rising
expectations from its middle class, which cannot pay high prices for new
Novartis spokeswoman Julie Masow said the company “is aware and
sympathetic” to the financial challenges in Colombia and is actively
seeking a resolution.
But compulsory licenses, she said, “should never be used to force price
negotiations, as is the case here. This would create a damaging precedent
that could apply to all patent-covered innovations—pharmaceutical or
Colombia, a country of 47 million that economists view as market friendly,
has never before issued a compulsory license. The debate over imatinib has
the potential to set an important precedent for developing countries and
the battle against soaring drug prices, said James Love, director of
Knowledge Ecology International, a Washington-based advocacy group that
works on intellectual property issues.
“This is a test for Colombia. If they don’t stick to their guns, they’ll
basically have a sign on them that says ‘Kick Me,’” Mr. Love said.
Mr. Gaviria said the use of a compulsory license wouldn’t lead to similar
moves on other drugs. “It’s a legal mechanism, but exceptional,” Mr.
Gaviria said. “And that’s how it will continue being.”
Gleevec was Novartis’s biggest-selling drug last year, with revenue of $4.7
billion. However sales from the blockbuster drug are poised to decline
sharply after a cheap generic version launched in the U.S. in February.
Authorities in Colombia say a proposal to cut the drug’s regulated price to
less than half of the $15,000 it currently costs each patient a year was
rejected by Novartis, even though the proposed price was above comparable
Imatinib has been sold in Colombia since 2003 and is currently used by
2,000 patients. For nearly a decade, it wasn't under patent protection,
giving rise to generic competitors who sold it for about half the price,
according to the Health Ministry. A 2012 Colombian court order then granted
Novartis a patent until mid-2018.
About a decade ago, Colombia began paying for new medicines not included in
its benefits portfolio with public funds. “Pharmaceutical companies,
providers, and doctors quickly realized that the state was willing to pay
for almost everything (at almost any price),” Mr. Gaviria said in a 2014
paper for the International Monetary Fund outlining the challenges in
keeping the health-care system solvent.
“Countries have a right to negotiate the prices that they are going to pay
and use the legal mechanisms at their disposition,” Mr. Gaviria said in his
—Denise Roland contributed to this article.
Write to Kejal Vyas at kejal.vyas at wsj.com
Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428
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