By Kejal Vyas Updated May 20, 2016
The government will override Novartis AG ’s patent on a cancer medication by month’s end and open it up to generic manufacturers unless the Swiss pharmaceutical maker 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 control on imatinib supply and issue 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, despite what the Health Ministry says has been international opposition to the move.
“Technological pressure and high drug prices have brought the health-care system to a financial crisis,” Alejandro Gaviria, minister of health and social protection, said in an emailed. “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.”
Countries like Brazil and India have targeted drug patents in the past, drawing criticism from the U.S. government and pharmaceutical industry groups. But Colombia, a country of 47 million that economists view as market friendly, has never before issued a compulsory license.
Ver: Gleevec en India
The debate over imatinib could set an example for developing countries faced with soaring drug prices, said James Love, director of Knowledge Ecology International, a Washington, D.C.-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,” he 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 annually 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 that 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, the government began paying for new medicines not included in its benefits portfolio without negotiating their price. “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.(Ver)