Big Pharma vs. Third World

Apr 03, 2013 Editorial

Monday might have been “April Fool’s Day” but a decision announced that day by the Indian Supreme Court was no joke. In a landmark ruling that is sure to redound to the benefit of the entire developing world, the Court rejected the Swiss ‘big pharma’ multinational Novartis’ claim that Indian-manufactured generic copies of its cancer-fighting drug Glivec or Gleevnec violated its ‘patent’.
Novartis’ original patent had long expired on the drug, but it utilised a prevalent practice in the industry called “evergreening’. In this manoeuvre, the pharmaceutical companies make a small modification on the original formulation to file for a new patent that would maintain its exclusive right to manufacture it for another five years. More importantly they could continue to charge huge premiums for the drugs.
The court said they ‘firmly reject the appellant’s case that (the reformulated drug) is a new product and the outcome of an invention beyond the (original) patent. It held that India’s Patents (Amendment) Act, 2005 established that the “mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance” is not an invention — for the purpose of patenting. Glinvec is only one of a host of drugs that are being manufactured in India because they reject the ploy of ‘evergreening’.
India is presently the world’s largest manufacturer of generic drugs and the case will be closely followed in other countries such as Brazil and Thailand that have pharmaceutical industries striving to bring drugs to their poorer population at prices they can afford. Gleevec, for example, costs as much as $70,000 a year in the US, while Indian generic versions cost about $2,500 a year. This is literally a matter of life and death for many in the developing world. It is obviously also a large factor in the cost of health care in the US and other developed countries, but because of the power of ‘big pharma’, ‘evergreening’ is accepted by the authorities.
India exports about $10 billion worth of generic medicine annually and together with China produce more than 80 percent of the active ingredients of all drugs used in the United States. The irony is that ‘big pharma’, in its drive for profits, uses Indian and Chinese cost effectiveness to manufacture the active ingredients there, but slaps on a label in their home countries to make a huge killing (pun intended). However the downside for their quest to make their huge profits ad infinitum is that the Indian and Chinese drug manufacturers frequently have the inside information on the new drugs even before they are released and are in a position to get immediately into production at the expiration of the original patent in five years, under their own brand names.
‘Big Pharma’ cannot credibly complain of ‘inferior third world products’ as is their wont, since their own products emanate from the same sources. Their only honourable recourse, it would appear, would be to market their product more effectively, but the levels of profit they are demanding make this option unattractive for them. What they have chosen to do instead is to use their leverage in their home countries to force the developing world to accept ‘evergreening’.
For instance this is one of the issues that the US is promoting in the Trans-Pacific Partnership (TPP), which it is promoting right now. Big Pharma insists that there will be less investment in research for new products to fight disease, but critics point out that the profits typically made in one year in the US alone cover the largest research budgets.
Novartis has already announced that it will be spending less money in India on research because of the decision. In Guyana, we have had some experience with the insistence of ‘Big Pharma’, in general, and Novartis in particular, demanding more money for its products. The government insisted on calling for bids on an anti-malarial drug which ended up costing the Guyanese taxpayers millions of dollars than if the generics from India had been requested.

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