Drug Patents Don’t Ensure Innovation

Opinions and perspectives on the Indian Supreme Court’s rejection of Novartis’s patent application for Gleevec/Glivec are plentiful, both in support and against the decision. In the wake of the decision, many words are being typed about how the patent system is necessary to guarantee medical advancement, and also how patents, when extended beyond their original timeline, keep drug costs high and out of reach for many people, especially in poorer countries.

The following is my take on the matter, or at least one of my takes. Having just written a book telling the story behind the creation of Gleevec, this subject is one I’ve been musing about for quite a while. This post ran as an op-ed in the April 15, 2013, edition of the San Francisco Chronicle.

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The Indian Supreme Court denied the pharmaceutical company Novartis a patent for its cancer drug Gleevec on April 1. Hailed by some as a victory for ensuring widespread access to lifesaving medications, the decision is derided by the pharmaceutical industry as counteractive to the discovery of new medicines. Both positions are based on an incomplete view of what promotes innovation.

Without a patent, Novartis could not have brought Gleevec, a breakthrough drug for a rare cancer, to market. The drug will save countless lives, and has transformed the future of cancer treatment. The drug is also a blockbuster. Between 2001 and 2011, worldwide sales of Gleevec totaled more than $27.8 billion.

Novartis patented Gleevec in 1993, and then an improved formulation in 1995. India does not recognize patents issued before 1995, and the court asserts that the latter formulation is too similar to the original to warrant its own protection. Whether or not Novartis’ patent application in India is legally warranted is a technical matter wrapped in layers of government acts and amendments. The drug is patented in 38 countries but has never had such protection in India.

The consequences of the court decision are mixed. Advocates for the poor applaud the court’s verdict: Everyone, regardless of their economic status, will be able to afford generic Gleevec, whereas the wholesale cost of the brand-name version is about $77,000 for a year’s supply (and an individual may take the drug for decades).

Novartis says the decision “discourages innovative drug discovery essential to advancing medical science for patients.” But that position ignores the design of the patent system.

Patent expiration is as essential to medical progress as the patent itself. Known as the patent cliff, the moment of expiration – usually 15 to 20 years after issuance – abruptly ends nearly all sales of a patented drug (the U.S. patent of Gleevec expires in 2015). Without new products, the expiration of a blockbuster drug’s patent would put a company under. That fear is a great spur of innovation.

India’s approach isn’t necessarily better. Generics are a $10 billion-per-year industry for the country, with no investment made in new drugs and no incentive to do so.

China is trying a new tack, which may be the best compromise. Taunting the industry with the world’s third-largest market, the Chinese government is insisting on price concessions for brand-name drugs. Last year, Novartis agreed to give three free doses of Gleevec for every one purchased by the government. The drug is still patented, but the cost is now about $12,000 per year. With brand-name protection, companies can be assured of profit while the Chinese can be assured of treatment access.

Whatever the outcome, Gleevec, which proved the principle of targeting cancer at its root cause, continues to be a canary in the pharmaceutical industry’s coal mine.

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8 Responses to Drug Patents Don’t Ensure Innovation

  1. I wrote about this very subject on my own blog, Cancer Research 101, not long ago. Your readers may be interested in that as well:

    http://www.michaelwosnick.com/novartis-cancer-drug-gleevec-vs-the-supreme-court-of-india-a-classic-catch-22/

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