Colombia Threatens to Override Novartis's Patent on Gleevec
May 20 2016 - 3:18PM
Dow Jones News
By Kejal Vyas
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 drugs."
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 otherwise."
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 generic versions.
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 email.
--Denise Roland contributed to this article.
Write to Kejal Vyas at kejal.vyas@wsj.com
(END) Dow Jones Newswires
May 20, 2016 15:03 ET (19:03 GMT)
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