In an interview with the
Times of India, Ranjit Shahani of Novartis said that while
the company will continue to release drugs in the country, it
will be "cautious" about investing in India.
legal issue here is section 3(d) of the Patents Act, which
states that new forms of known substances are not patentable
unless they "differ significantly in properties with regard to
efficacy". However, in the background of all discussions about
pharmaceutical patents in India, and really the patent system
in general, is the balance between providing incentives for
innovation and access to those new inventions. This takes on
particular significance with life-saving drugs such as Glivec,
and even more so in developing nations like India.
The rallying cry for international pharmaceuticals is that
the cost of drug development requires the high prices to
justify the research in the first place. Some
point out that the average cost to develop a successful
drug has increased fifteen-fold in the last 25 years, and the
price tag has been tagged at $1 billion per drug.
Certainly, concerns for these costs are understandable.
Accessibility activists predictably accuse pharmaceutical
companies of putting
profits before patients’ lives. Shahani
noting that 95% of all Glivec users in India receive the
drug free of charge through its access programme, and that the
company has given out more than $1.7 billion worth of the drug
in the country.
This programme is of course laudable, but raises some
questions. If 95% of Indian Glivec users received it free of
charge, then 5% of patients paid for it, generating some $89.5
million in revenues, a situation that the company was satisfied
with. If that was the case, is it really true that the prices
that Novartis was charging were absolutely necessary to spur it
to continue its innovation? The fact that the company was
willing to take a 95% discount to its Indian Glivec revenue
seems to confirm Andrew Witty of GlaxoSmithKline’s
recent claim that the $1 billion R&D price tag was "
one of the great myths of the industry".
Furthermore, generic versions are available in India at
approximately 5% of the price of Novartis’s
version; if Novartis had lowered the price to a point more in
line with the generics’ price, it likely could
have charged many of the 95% of users who received Glivec for
free. Even at a higher price, it could have picked up users who
used the generic version, as generics have a
reputation in India for inferior quality.
These questions may be difficult to answer but are drawing
increasing attention, and not just in India. A draft report
from the Australian government released
today questions whether lengthy patent terms and extensions
for pharmaceutical patents really incentivise innovation, and
critics grow increasingly concerned that US patents for
different forms of the same molecule (the type of patent that
the India Supreme Court
rejected yesterday) may be one reason why the country pays
the highest drug prices in the world.