[Ip-health] AP: Colombia battles world’s biggest drugmaker over cancer drug

Michael H Davis m.davis at csuohio.edu
Wed May 18 08:13:53 PDT 2016

There are a couple of misunderstandings here that beg for correction. First of all, nobody's patent is being "broken." The very fact that a compulsory license is required is evidence of the patent's continued existence and vitality.

Secondly, and perhaps essential to understand the first, a compulsory license is in no way abnormal. Except for the US, literally, the entire world treats patents  normally and the way they should be: as a governmental privilege that can be given and taken away depending on economic circumstances. That is, the so called "normal exercise of a patent" includes the compulsory license. It goes with the patent. It is not a piece of property that the government might illegitimately seize, but a privilege that includes the government's right to use it in other ways If the patent holder doesn't make it in sufficient quantities, charges too high a price, doesn't use local labor to manufacture it, or doesn't exercise the patent at all. There is nothing extraordinary about a compulsory licence. It is an essential part of the bundle of rights that make up a patent.

I have been teaching patent law for forty years. During those forty years I have seen the U.S. continually striving to treat compulsory licenses in a way contrary to the explanation above. In some ways they have succeeded and it is up to all of us to oppose that.

Sent from my T-Mobile 4G LTE Device

-------- Original message --------
From: Zack Struver <zack.struver at keionline.org>
Date: 18/05/2016 10:14 (GMT-05:00)
To: ip-health at lists.keionline.org
Subject: [Ip-health] AP: Colombia battles world’s biggest drugmaker over cancer drug


Colombia battles world’s biggest drugmaker over cancer drug

By Joshua Goodman and Linda A. Johnson | AP May 18 at 8:05 AM

BOGOTA, Colombia — Colombia’s government is giving pharmaceutical giant
Novartis a few weeks to lower prices on a popular cancer drug or see its
monopoly on production of the medicine broken and competition thrown open
to generic rivals.

Health Minister Alejandro Gaviria’s remarks in an interview Tuesday are the
strongest yet in an increasingly public fight with the world’s biggest
drugmaker that could set a precedent for middle-income countries grappling
to contain rising prices for complex drugs.

Memos leaked last week to a nonprofit group, written from the Colombian
Embassy in Washington, describe intense lobbying pressure on Colombia, a
staunch U.S. ally, from the pharmaceutical industry and its allies in the
U.S. Congress.

In one memo, the embassy warns that breaking Novartis’ patent for the
leukemia drug 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.

Gaviria, an economist by training, said the pressure shows the forceful
steps that the pharmaceutical industry is willing to take to protect its
commercial interests.

“They’re very afraid that Colombia could become an example that spreads
across the region,” he said.

Government health programs in many countries are being squeezed by high
prices for newly launched drugs and by annual price hikes of 10 percent or
more for medicines long on the market, and they are increasingly pushing
back by demanding big discounts or setting price caps on ultra-expensive

Gaviria denies he is trying to set a precedent in the global fight for
lower prices.

“For us, it’s a question of survival,” he said. He noted Colombia’s health
care system guarantees patients’ access to all approved drugs and the
budget is straining after years of price rises. In 2009, the government
declared a public health emergency after spending on sophisticated drugs
had risen tenfold in just a few years.

“As the state, you can’t just buy everything at the price set by whoever is
selling. But unfortunately that’s what happened many times,” Gaviria said.

Novartis has rejected Gaviria’s proposal to reduce the price for Gleevec to
140 pesos (5 U.S. cents) per milligram. That is less than half the current
regulated price but still well above what generic versions cost before they
were banned when, after a decade of litigation, a Colombian court in 2012
awarded Novartis an exclusive patent on one of two forms of the drug.

In an April 20 letter, Novartis’ local affiliate said that it doesn’t
consider it convenient to initiate negotiations over prices and that the
decision to override patents should be taken only in exceptional
circumstances and not used as a bargaining tool.

Gaviria said he is giving Novartis a little time to reconsider. But if the
Swiss company doesn’t, he said, he plans to declare access to the leukemia
medicine a matter of public interest when he returns from a trip next week
to Geneva to attend a meeting of the World Health Organization.

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. As a result, in 2016’s first quarter, Gleevec sales fell 40 percent
in the U.S. and 20 percent worldwide.

In Colombia, the patent is due to expire in July 2018.

Novartis spokesman Eric Althoff declined to answer questions on what his
company is trying to achieve in its talks with the Colombian government. He
also would not say whether Novartis enlisted U.S. officials to push the
government against ending its patent here for the drug, which is called
Glivec in Colombia and some other countries.

The company is “actively seeking a resolution to discussions around our
Glivec patent in Colombia that benefits patients, innovation and the health
care system,” Althoff said in an email.

Novartis says that the drug has been subject to Colombian price controls
since 2011 and that two generic versions exist. But the Health Ministry
says generic competition that previously existed has been all but driven
out by Novartis’ aggressive marketing and competitors’ fear of prosecution
for infringing the patent.

What’s not in dispute is how much Colombia stands to save from issuing
so-called compulsory licenses. Cost for treatment with Glivec 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

More than 100 lawyers and health experts from around the world sent a
letter to Colombia’s government this week to support its review, which came
in response to a petition by local nonprofits including Mision Salud.

“The pressure against Colombia is bogus but it’s real,” said Andrew
Goldman, a counsel for Knowledge Ecology International, the
Washington-based group that first obtained the embassy memos. “We always
assume that this kind of intervention is happening behind the scenes but
rarely do you get the chance to see it up close.”

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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