01 December 2006

Oxfam’s response to the statement by Novartis

In November 2006, Oxfam launched an email action against pharmaceutical giant Novartis. Thousands of campaigners wrote to Daniel Vasella, the CEO of the company, demanding that Novartis drop their challenge to Indian Patent Law in the courts. If they win, this will limit India’s ability to produce and export cheaper drugs to other developing countries. This includes HIV medicines currently benefiting millions of poor people.

Novartis has now issued a response to the messages it has received – the full text of the email they have sent to campaigners can be read here.

Oxfam welcomes Novartis concern for the well being of patients in poor countries. To ensure that they put their words into action Oxfam continues to call for Novartis to drop its court cases in India for the two following reasons:

Firstly, India has the right to prioritise public health concerns and access to medicines for its people by incorporating the TRIPS flexibilities into its patent law. This will help ensure that patients get the medicines they need to survive at prices they or the government’s health service can afford

Secondly, Novartis’ proposed lawsuit threatens India’s status as the world’s largest supplier of cheap copies of medicines to poor people in India and other developing countries.  The company’s legal action will not only affect generic production of Glivec, but will also severely limit generic production of many other important, life-saving medicines, including anti-retroviral medicines used to treat HIV and AIDS.

Please take 5 minutes to read our replies to some of the specific claims made by Novartis in the e-mail the company sent to our supporters:

1. Is India allowed to refuse a patent?
2. Is India breaking WTO rules?
3. What level of patent protection should India have?
4. Is India jeopardising innovation?
5. Does generic production bring down prices?
6. Is corporate charity the answer?

Is India allowed to refuse a patent?

Novartis says:
Glivec is patented throughout the world, and we believe that our challenge to the denial of a patent for Glivec in India and to specific provisions in the Indian patent law are entirely legitimate and, indeed, in the public interest...
These discussions [at the World Trade Organisation] have moved towards finding ways to increase access to medicines through, for example, making compulsory licensing possible where countries choose to take that path, not through denying patent protection for innovative drugs, as is the issue in India today. 

Oxfam replies:
In 2005 India changed its law in order to comply with World Trade Organisation (WTO) rules requiring India to provide patent protection to new medicines. The WTO rules also allow countries to define in their national law what constitutes a “new product”. Under India’s patent law (section 3 d) patents are not given for new uses or minor modifications of existing drugs. It was under this provision that Novartis was denied a patent for Glivec in India as the drug had already been in the public domain for some years. 

Rather than denying patent protection for innovative drugs, as Novartis claims, India’s patent law seeks to ensure that patents are only given to medicines that are truly innovative and which were invented after 1995 when India was first required to give patent protection for medicines. There are now almost 7,000 patent applications for medicines waiting to be reviewed by the Indian patent examiners. A study by the Indian Pharmaceutical Alliance, which was later backed up by a U.S. government study, suggests that in the 10-year period from 1995 to 2005, only 250 of the nearly 7000 ‘new’ medicines, were in fact truly innovative. In effect this means that approximately 6,700 medicines, which drug companies are seeking to patent in India, are likely to be older medicines with slight modifications made after 1995.

If Novartis wins their law suit against India this will eliminate the government’s right to deny patents for medicines that are not innovative.  It would also threaten the possibility of producing generic versions of Glivec and thousands of other medicines, including anti-retroviral medicines used to treat HIV and AIDS. This would undermine India’s status as the world’s leading supplier of cheap copies of medicines to poor people in India and other developing countries.

Is India breaking WTO rules?

Novartis says:
“The tension between intellectual property rights and access to medicine is addressed by the Doha declaration offering the instrument of compulsory licenses to tackle public health problems, and Novartis supports the flexibilities offered in this declaration.”

Oxfam replies:
The WTO intellectual property agreement explicitly recognises that all countries’ patent rules should not prevent governments’ ability to “protect public health, and, in particular, to promote access to medicines for all”. For this reason, the agreement includes a number of so called public health flexibilities that countries can incorporate in their laws. The European Parliament recently confirmed this promise by stating that it “Encourages governments to use all the possibilities available to them under the TRIPs Agreement”.

Novartis correctly mentions that compulsory licensing is one such flexibility but fails to mention the numerous other flexibilities allowed under the WTO agreement such as a country’s right to define what constitutes a new drug. Whilst fulfilling its international obligations on the patent issue, India has legally incorporated these flexibilities into its Patent Law in order to make medicines affordable and available to poor people. If Novartis truly supports the flexibilities offered in this declaration they should drop their court case challenging India’s right to implement the Doha Declaration.

What level of patent protection should India have?

Novartis says:
India is a signatory to the WTO TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement and as an increasingly important industrial country and pharmaceutical power [that] should be interested in promoting the development of innovative therapies.

Oxfam replies:
Whilst it is right that India is a fast growing market Novartis fails to mention that India is also the home to over 800 million people living on less than 2 dollars per day.  India’s use of the TRIPS flexibilities enables cheap, generic medicines to be produced and made available to poor people in India, and across the developing world. By applying these flexibilities India is not undermining innovation but rather is seeking to strike a balance between patent protection and public health needs that reflects their current level of development. Historically, developed countries, including Switzerland, where Novartis is based, adopted patent protection for medicines at levels of per capita income of about $20,000. India is now being asked to adopt the same level of patent protection for medicines at their level of $3,400 per capita income.

Is India jeopardising innovation?

Novartis says:
The Indian law creates new and unjustified hurdles in the way of pharmaceutical innovation. These shortcomings are likely not only to jeopardize further development of new medicines in many areas, but also to jeopardize continuous and reliable access to Glivec for patients in India today.

Oxfam replies:
Rather than creating unjustified hurdles in the way of innovation, India’s patent law interprets and applies legitimate TRIPS safeguards in order to ensure that only medicines which are truly innovative and which were invented after 1995, when India was first required to grant patent protection, will be granted a patent.

Furthermore, Novartis states that currently only 1 per cent of its Glivec customers in India pay for their treatment. In a letter to Oxfam Novartis stated that there is virtually no commercial market for Glivec in India. From this statement it is difficult to see how generic production of Glivec would jeopardize income and in turn innovation of new medicines. Rather, it confirms the fact that innovation at Novartis and all other major pharmaceutical companies, is on-going and driven by demand from consumers in rich industrialised countries who account for nearly 90 percent of worldwide pharmaceutical sales.

Does generic production bring down prices?

Novartis says:
The generic versions of Glivec in India are priced at approximately 4.5 times the average annual income, putting them out of reach for most patients needing Glivec in India.  Clearly, generics do not, and will not sufficiently address the need for access to Glivec, or other life saving medicines in India…
Indeed, the Indian case about which you wrote to us demonstrates the opposite. Such actions would most likely adversely affect patients by denying them continuous access to innovative new drugs or even, eventually, generic medicines too, since these are priced beyond the means of many patients in need.

Oxfam replies:
Patients need access to life-saving medicines at prices that they or their government’s healthcare programs can afford. The patented version of Glivec, sold at the “global price” of approximately $25,000 per patient per year, does not fit this description. Novartis points out that the generic version of Glivec is 4.5 times the average Indian salary and claims that because of this generics do not provide the solution to the problem of too expensive medicines. However, the company fails to mention that its own patented version of Glivec is sold at a price 40 times the average Indian salary!

In rich countries, governments or insurance companies provide drugs to people who need them. In poor countries government health systems cannot afford to provide the most expensive drugs and most people lack private health insurance. Generic production is widely recognised as being the most effective way to bring down the price of medicine. Novartis, the world’s 2nd largest producer of generic medicines, stated in its 2005 Annual Report that one of its key strategic directions was the “expansion of our generics business (to provide affordable treatment options following patent expiries)”.

Is corporate charity the answer?

Novartis says:
We too are deeply concerned about ensuring that patients throughout the world have access to the treatments they need…
Novartis provides Glivec totally free of charge to over 6,500 patients (99% of all patients receiving the medicine) as part of our Glivec International Patient Assistance Program (GIPAP). Therefore only 1% of patients pay for their treatment.  Worldwide, we provide Glivec free of charge to more than 17,000 patients in 83 countries.

Oxfam replies:
Oxfam acknowledges progress made by Novartis to make medicines for particular diseases available to the people that need them in poor countries, including the establishment of the Novartis Institute for Tropical diseases based in Singapore. We also welcome Novartis’s commitment to the World Health Organisation (WHO) to provide free treatment for all leprosy patients in the world as well as to provide anti-malarial medicines at cost price.

However, we believe that patients should not have to depend on the good will of big drug companies for their life-saving medicines. Donations cannot replace generic competition, which is the most sustainable way to reduce the prices of medicines and ensure that as many people in India and other developing countries can get the medicines they need.

Novartis lawsuit could not only limit generic production of Glivec but could affect the affordability of other medicines. Patients need to get life-saving medicines at prices that they or their government’s healthcare programs can afford. In poor countries, resources for healthcare are scarce so government, charity, and private resources should be used to buy the cheapest drugs possible to ensure long-term universal access to medicines.

	Act now
	email Novartis

See also

Novartis denies access to generic medicines to poor countries
Oxfam International, 23 November 2006

Open letter to Novartis (Bern Declaration website)

The pictures of the Novartis action are available free (Bern Declaration website)