It is perhaps, very rare to see a class action — of a different kind, though. One has heard of class action suits filed by shareholders against corporates, accusing fraud and manipulation, but one has never seen class or mass action compelling a corporate to do or refrain from doing something — which obviously, a large body of activists and shareholders believe isn't fair or right.
The obvious reference is to the drama which unfolded at the AGM of Novartis in Switzerland. Ironically, this concerned something which the Novartis Indian subsidiary has done in India. The matter has assumed significance in the context of Novartis India pressing for a patent for its innovation — Glivec — used in the treatment of blood cancer.
While the major dispute revolves around Section 3(d) of the Indian Patent Act, which especially discourages “evergreening” of patents, obviously, a lot is at stake for innovators and for generic companies as well. The Supreme Court is likely to hear the matter this month.
GENERIC VERSIONS
The issue isn't between “innovation” and “copy-cat versions” but is more between “prohibitive cost” and “affordability”. More so, since the medicine involved is a life-saving one, as opposed to a lifestyle one. It must be said that generic versions, often, are available at a fraction of the innovator's price.
Cancer is a dreaded disease. Perhaps, not by itself, but when one considers the cost and futility of treatment in most cases. This is at least true in developing nations such as India, and in underdeveloped countries such as Bangladesh, where insurance facilities are unavailable or aren't adequate. By a queer act of fate, while medicines are available, they aren't really available because they aren't affordable. Generic versions cannot be launched because of patent restrictions. Therefore, suffering humanity is deprived the luxury of affordable life-saving medicines.
This isn't to undermine the efforts of the innovators. Huge sums of money and efforts must have been put in by the innovators and it is only fair that the innovator be permitted to recover these costs. The only question is that a balance has to be found between the need for recognising innovations, and the necessity of providing affordable life-saving medicines.
Patents are the most commonly followed process of recognition of innovations. A patent granted has certain validity, and after this, generics must be permitted to be available. If someone attempts to “evergreen” a patent, it must be opposed, and Section 3(d) of the Indian Patents Act is a step in this direction.
In a rare strength of solidarity, activists seeking affordable medicines in developed countries occupied Novartis offices in the US — in Boston, Washington, and New York. The issue has even been brought up at the recent AGM of Novartis held in Switzerland. The protestors who had stormed the AGM asked the company to withdraw its case before the Supreme Court of India.
AFFORDABILITY
Considering the fact that “affordability” is the issue involved, Novartis should have addressed this issue. It hasn't reduced its price, which is nearly ten times more than that of a generic version. On the other hand, in its opinion, “price in the case of Glivec is irrelevant”.
One would like to know how the price can be irrelevant in countries like India, where the treatment costs are high, and in most cases, unaffordable. Novartis, apparently, conveniently hadn't followed in India, what it had followed in South Korea where the Ministry of Health and Welfare refused to grant approval unless the price was reduced to $18 a capsule.
On the other hand, Novartis takes a rather untenable shelter under its International Patient Assistance Programme, which allegedly makes available Glivec “free of cost to 95 per cent of the patients receiving the medicine in India”. Novartis claims to have distributed Glivec valued at more than $1.7 billion since 2002. However, this story is hard to believe. For one, there are an estimated 20,000 new patients suffering from cancer, and the last ten years should have seen an addition of 2 lakh patients.
Judging by this figure, the Novartis medicine donation programme doesn't seem to cover any significant number of patients. This is amply evident by a report in The New York Times edition dated June 5, 2003.
According to this report, when the donation programme was embarked upon, Novartis promised to make sure that no patient who needed the medicine would go without it and dubbed it as “the most generous and far-reaching access programme ever developed for a breakthrough cancer therapy”.
FAIRPLAY
The basic feature of the programme was Novartis's effort in building a system that would evaluate the health and finances of individual cancer patients scattered around the globe. Medicines would be donated only to those who qualified. The system has been criticised as being “a stalking horse for its commercial goal of building… sales”. What is more, the donation programme in India came with a rider — that it would stop the programme if the government permitted local companies to sell generic versions of the medicine. (This was later followed by a threat to halt all R&D activities).
As rightly said by the New York Times , the donation programme is a “study in both the promise and dangers of corporate philanthropy”. The Novartis programme is alleged to have helped just 1,500 patients (2003 count), and only 11 patients in approximately 49 of the poorest countries (again 2003 count).
In rich countries, the donation programme was used — along with media campaigns and legal tactics — to win reimbursements for Glivec. The medicine donation programme was outsourced to Max Foundation, a Seattle-area-based charity, which had “total and final responsibility for approving each single patient's eligibility”. In contrast, according to the foundation, “it had met patients' needs while running the programme on the lines dictated by Novartis”.
However, the eligibility requirements were out of step with the way doctors were prescribing the medicines. This stemmed from the fact that Novartis required patients' treatments to match local medicine regulators' guidelines for Glivec, resulting in several inconsistencies in different countries.
The practice has been that patients got Glivec as Novartis undertook clinical trials, country by country, to win regulatory approvals. But once approved, the company stopped supplying it to patients, who are then required to pursue it through private or government insurance and some other conventional channels.
Companies like Novartis must know that consumer activism is growing in countries like India. They also must know that they shouldn't only appear to act fair, but should act fair. Market is a free place for everyone to play, and one shouldn't expect reservations in a market place. Least but not the last, companies must also learn to respect the laws of the country in which they operate.
(The author is CFO, Natco Pharma Ltd.)