[Ip-health] US News: Colombia to force Novartis to lower prices of cancer drug

Andrew S. Goldman andrew.goldman at keionline.org
Thu Jun 9 18:46:01 PDT 2016


Colombia to force Novartis to lower prices of cancer drug

Colombia's government is unilaterally forcing pharmaceutical giant Novartis
to lower prices of a leukemia drug in the South American nation

June 9, 2016, at 6:15 p.m.

By JOSHUA GOODMAN, Associated Press

BOGOTA, Colombia (AP) — Colombia's government will unilaterally force the
world's largest drugmaker Novartis to lower prices of a popular leukemia
medicine in a closely followed patent dispute, authorities said Thursday.

Health Minister Alejandro Gaviria told reporters that two weeks of
negotiations with the Swiss company had ended without an agreement. As a
result, he's following through on a threat to declare the drug Gleevec in
the public interest, the first step in breaking Novartis' monopoly in the
South American nation.

"Negotiations have ended definitively," Gaviria said, adding that the
resolution that will be published in the coming days is likely to mandate
lower prices for the medicine but not throw open production to generic
rivals as was originally contemplated.

Gleevec has been the top-selling drug for Novartis since 2012, bringing in
$4.7 billion worldwide last year, or about 10 percent of the company's
total revenue. It won't be the top seller much longer, though. Gleevec got
generic competition on Feb. 1 in the U.S., which accounts for half of its
sales. In Colombia, the patent is due to expire in July 2018.

The drug maker's increasingly public feud with U.S. ally Colombia over its
patent has drawn attention because of fear in the pharmaceutical industry
that Colombia's decision will set a precedent for middle-income countries
grappling to contain rising prices for complex drugs. Memos written by
diplomats at Colombia's Embassy in Washington and leaked to the non-profit
Knowledge Ecology International describe the intense lobbying pressure by
the pharmaceutical industry and its allies in the U.S. Congress to avoid
tapping a legal mechanism they consider should only be used in the case of
epidemics and public health emergencies.

In one memo, the embassy warns that breaking Novartis' patent for Gleevec
could hurt U.S. support for Colombia's bid to join the proposed
Trans-Pacific Partnership trade zone and even jeopardize $450 million in
U.S. assistance for a peace deal with leftist rebels. The memos followed
meetings between Colombian diplomats and officials from the Office of the
U.S. Trade Representative and a Republican staffer on the Senate Finance
Committee whose chairman, Sen. Orrin Hatch of Utah, has close ties to the
pharmaceutical industry.

But Colombia's actions have also elicited much praise from the World Health
Organization and public health experts worried about access to life-saving
medicines and overburdened public health systems like Colombia's.

Novartis said in a statement that it has actively sought a solution that
benefits patients, innovation and Colombia's health care system. It says it
is already subject to price controls in Colombia and disputes the
government's claim that competition doesn't exist.

"Novartis never will close the door to a solution that benefits the parties
and especially patients in Colombia," it said.

Colombia's actions are being motivated by a severe deficit in the public
health system, which treats mostly the poor. Cost for treatment with
Gleevec is about $15,000 a year, or about twice the average Colombian
worker's income. According to a study by the ministry, without competition
from generics, the government would have to pay an extra $15 million a year
supplying Gleevec.

Andrew S. Goldman
Counsel, Policy and Legal Affairs
Knowledge Ecology International
andrew.goldman at keionline.org // www.twitter.com/ASG_KEI
tel.: +1.202.332.2670

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