First, CARE applauds Novartis’ commitment to social responsibility. We also agree that rewarding innovation through reasonable patent protection is essential to stimulating research and medical progress.
Patents alone, however, do not do enough to drive the development of essential drugs for poor people in developing countries. In fact, pharmaceutical companies invest mostly in innovations that will yield the highest returns. These are often life-style drugs that can acquire a large market in rich countries rather than life-saving drugs that respond to the needs of poor people in developing countries. That is why more is invested in drugs that fight obesity and incontinence than treat diseases like malaria or leishmaniasis. Less than 1 percent of 1,233 drugs patented from 1975 to 1997 were developed specifically for tropical diseases in humans.[1] Some pharmaceutical companies have established special facilities – such as the Novartis Institute for Tropical Diseases – to carry out research on neglected diseases. CARE applauds this and urges greater investments along these lines.
Second, Novartis claims that Section 3(d) of India’s Patents Act “limits patents to new chemical entities only” and “creates new hurdles for pharmaceutical innovation, unjustifiably and illegally narrowing what is patentable.” “It limits the ability to patent incremental innovation,” adds Novartis, asserting that “medical progress happens through steps in innovation, also called incremental innovation.”
CARE believes that genuine innovation should be rewarded but also that governments should have ample room to determine, within the boundaries of international law, when new versions of old drugs are not deserving of patent protection. International law, as expressed in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement and the 2001 Doha Declaration on the TRIPS Agreement and Public Health, reflects this balance. [2] The Government of India has used flexibility in the TRIPS Agreement to define what an “inventive step” is: innovative drugs are patentable, and those that reflect minor changes to an existing drug without increasing efficacy are not.
Under Indian patent law, a drug that reflected incremental change, but substantially increased efficacy, would quality for a patent. The World Health Organization (WHO) has cited India’s Patents Act as an example of how TRIPS flexibilities are used to distinguish between “evergreening” (where the modified drug has no additional therapeutic benefits) and incremental innovations (where there are such benefits).[3]
Third, Novartis also asserts that “their actions in India do not hinder the supply of medicines” to poor people, first because the TRIPS agreement and Doha Declaration allow other safeguards – e.g. compulsory licenses – to ensure access to medicines for public health reasons and, second, because “other flexibilities within the Indian Patent Law (called the ‘grandfather clause’) mean that generic versions of patented drugs on the market before 2005 will remain on the market”.
CARE believes that governments need a full range of flexibilities, including not only compulsory licensing but also reasonable patent regulations that control evergreening and allow generic competition once legitimate patents have run their course. As explained above, India’s Patents Act already has been cited in a WHO report as a model with respect to the responsible use of public health safeguards. [4] Having internationally-agreed safeguards in place to ensure a balance between patents and public health only has meaning if these safeguards are respected and upheld. CARE believes that Novartis’ legal challenge of Section 3(d) in India’s Patents Act, is inconsistent with the spirit of the TRIPS Agreement and the Doha Declaration.
Removal of Section 3(d) to allow patenting of incremental changes to existing drugs would result in fewer generically produced drugs. Less generic competition will result in less downward pressure on drug prices, which is likely to jeopardize millions of people’s access to essential medicines. With respect to the so-called ‘grandfather clause’ in Indian law, it does not cover generic drugs entering the market since 2005 and, moreover, requires that the conditions for the production and sale of pre-2005 generic drugs be negotiated between the generic manufacturer and the patent holder. Calling for a ‘reasonable royalty’ to the patent holder, this undoubtedly will result in increased prices for generic drugs, even when they are allowed to remain on the market. Those entering the market after 2005 are not protected by this clause and their access will be blocked if the Section 3(d) safeguard is struck down and patents granted more liberally. The end result is less affordable access to older generics and increasingly limited generic competition going forward. In the near term, second line treatment drugs for HIV, whose generic versions are more recently developed, are especially likely to be affected by any weakening of Section 3(d).
Fourth, Novartis argues that “granting a patent is unrelated to the access to medicines issue.”
CARE disagrees. Generic competition is essential to making vital drugs affordable. CARE has seen firsthand the critically important role that generic drugs play in increasing access to life saving medications. In Peru, for example, CARE’s Global Fund-supported HIV and AIDS program was able to source 100 percent more ARVs than planned as a result of the cost savings from purchasing generic ARVs, 99 percent of which is procured from India. If we were not able to import generic medicines from India, hundreds of AIDS and tuberculosis patients would lose access to treatment. While price is only one factor, it is a hugely important one in determining access to medicines.
Government health policies and quality of health systems and infrastructure are also important determining factors. For example, the government of Brazil guaranteed universal access to essential AIDS drugs in 1996, and has since provided everyone who needs it with free treatment through government financing. It has done this through a combination of generic production of ARVs not patented in Brazil, and negotiation of significant price reductions on patented ARVs. [5] The AIDS treatment program sits within a public health system that provides free access to universal health care. Generic drugs are not a panacea, but are a critical alternative to have available in an imperfect world. In the course of CARE’s work, we advocate for government policies that expand access to quality health care and help build the capacity to deliver high-quality health services to poor people. Much of that work can be undermined if access to affordable medicines is constrained.
Fifth, Novartis cites its Glivec International Patient Assistance Program (GIPAP) as evidence of its commitment to social responsibility and its “deep concern that patients have access to the medicines they need.”
While Novartis’ drug donation programs are laudable, such programs rely on corporate largesse and thus are inevitably limited in scope and sustainability. So, for example, Novartis reports that it currently provides Glivec at no cost to more than 7,000 patients in India, but there are an estimated 27,000 new patients diagnosed there every year. CARE believes that market and other systemic forces, such as those created through generic competition, not pharmaceutical philanthropy, enable and sustain affordable access to the largest possible number of patients worldwide.
In closing, CARE applauds Novartis’ stated commitment to collaboration and open dialogue with all. We will pursue such a dialogue going forward with the ultimate goal of enabling access to vital medicines for all, and particularly those we serve in some of the poorest countries in the world.
[1] (Drugs and Neglected Diseases Initiative;2003-04 (First Quarter) http://www.dndi.org/cms/public_html/images/article/284/DNDiRDStrategyMay2004.pdf
[2] The Doha Declaration, in particular, established that intellectual property rights should not prevent countries from taking measures to protect public health. It affirmed that developing countries could enforce public health safeguards to enable price reductions via generic competition.
[3] Public Health, Innovation and Intellectual Property Rights, Report of the Commission on Intellectual Property Rights, Innovation and Public Health, World Health Organization, 2006. pg. 133-134.
[4] The TRIPS Agreement contains a number of public health safeguards in addition to regulating patentability. These include not only compulsory licensing – which allows a government to override a patent to authorize production and/or sale of generic versions of a medicine – but also countries’ right to pursue parallel importation – meaning importing brand-name medicines from the country in the world where they are sold most cheaply.
[5] Brazil has used the possibility of issuing compulsory licenses for generic manufacture of ARVs as a strategy to reduce the prices of patented ARVs. Brazil’s negotiating position was strengthened by its established capacity to manufacture ARVs locally and its ability to estimate production costs.
