Life Science Compliance Update

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July 06, 2016

Colombia v. Novartis

Several weeks ago, Columbian Health Minister Alejandro Gaviria announced that he was going to find a way to force Novartis to lower the price of its Gleevec leukemia treatment. He started out by threatening to sidestep the drug patent and declare a compulsory license, but the decided to declare a lower price for the medicine under the guise that doing so would be in the public interest because it would save the country money.

Colombia's decision stops short of a compulsory license that would have stripped the drug's patent to allow for generic production. The country had feared that move would lead the U.S. to pull financial support in other areas, such as Colombia's peace talks.

Such a move by Columbia, where the focus is on imposing more price controls is unnecessary and a major threat to an innovative manufacturing environment. Such an environment is crucial to any country seeking economic growth, an improved standard of living, and better jobs.

It is likely that some politicos (and non-politicos) will hail these actions as a great move to protect "public health." Those will be the same folks who want and expect it all to be free, and will have never spent any time or money to create the new cures that the world is currently, and always will be, seeking. They will ignore the fact that the innovative life sciences sector not only provides millions of jobs, but it is also the necessary pipeline for the generic industry they tend to favor.

PhRMA spokesman Mark Grayson opposed to idea, stating, "This medicine is being provided to all Colombian patients who need it and at a price negotiated and agreed by the Colombian Government under its existing pricing system. Several competing versions are also available in Colombia, and there is no apparent shortage or evidence of other access issues. Under these circumstances, a declaration of public interest is unwarranted and unjustified."

The National Association of Manufacturers also opposes the decision made by Gaviria, noting that, "[t]here was no need for this action given that the product is already available at a significantly reduced price and there are already non-infringing generic versions available in the Columbian market."

According to Garvia, the declaration was prompted by a breakdown in negotiations between the Columbian government and Novartis. Novartis has not yet received official confirmation regarding the declaration, but so far, it is refusing to lower the drug's cost. The Colombian Medical Federation noted that sales of generic Gleevec have declined, possibly due to a decreased availability of the drug. It isn't clear how many Columbian patients aren't receiving treatment because of the pricing dispute.

Novartis is not commenting on the situation unless and until it receives official confirmation from the Columbian authorities. In a statement, a Novartis spokesman stated

Throughout this dialogue we have remained fully committed to finding a resolution that benefits patients, innovators and the Colombian health care system. We have received no official confirmation from the Colombian authorities regarding the conclusion of these talks. Until we do, it is not appropriate to make further comment. 

We have consistently said that Declarations of Public Interest can be important and legitimate tools to be used only in exceptional circumstances. This is simply not the case in Colombia. There are no shortages of Gleevec or other access issues. Colombia's universal healthcare system means all patients who need Gleevec receive it. Novartis does not have a monopoly. There are already noninfringing generic versions on the market, which the government could purchase instead of Gleevec in order to reduce its costs.

If Columbia's actions do stand, it may be time to truly start worrying about access to medicines for this Latin American country.

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It's Colombia, not Columbia.

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