Financial Daily from THE HINDU group of publications
Monday, Mar 15, 2004
Industry & Economy - Pharmaceuticals
Drug access vs MNCs: New theory aims to resolve debate
P.T. Jyothi Datta
Mumbai , March 14
EMOTIONS run high when the debate is about providing medicine to people at affordable costs, as against rewarding drug companies for doing innovative work and coming out with breakthrough drugs. Rewarding innovative work translates to keeping price at a premium and drugs go beyond the reach of the masses.
But can a balance be achieved, where the masses have access to drugs even as patents are awarded and innovator companies get their return on investment?
The debate reached a shrill pitch recently in the context of the exclusive marketing right (EMR) given by the Government to Novartis for the latter's blood cancer drug.
The crux of the debate was cost - the company's Glivec is priced at Rs 1 lakh per month per patient, while its local clones came at Rs 10,000 per month.
"Innovator companies should be rewarded for research; but as amplified in the Glivec EMR case only a few patients would be able to afford the drug," said Mr Narendra Zaveri, an advocate on intellectual property rights-related issues. "Companies may give drugs free to those who cannot afford, but can a nation live on charity? What stops innovator drug companies from bringing down prices? Why doesn't the Government award a compulsory licence so that local companies manufacture the same drug at a lower price and a royalty be paid to the innovator company?"
Ms Jean O. Lanjouw, Associate Professor, Agricultural and Resource Economics, University of California, and Senior Fellow with the Brookings Institute, says that a balance can be struck between incentives to inventors and access to medicine. Her theory - `the Foreign Filing Licence Solution' (FFLS)' - keeps MNCs from enforcing patent rights in foreign markets that have sales in a single disease class below a trigger point, say two per cent.
"For instance, cancer is taken as one category and the sales of all cancer products sold in one country are added up. If the number is below the trigger percentage, generics should be allowed to operate in the market. But if it crosses the trigger, then the product-patent regime can prevail."
Speaking to Business Line, she said that MNCs such as GlaxoSmithKline, Merck, Novartis and Pfizer, and NGOs such as Oxfam and Medecins Sans Frontieres have evinced interest in the theory.
"It gives MNCs a chance to resolve the deadlock, since the system is tailored to be sensitive to development and market opportunities. Patent protection would vary in developing countries for different disease classes."
Pre-empting the argument of me-too drugs being rerouted from developing markets to developed markets, she said: "If that were true, the US would have been flooded with such drugs. Parallel imports are an issue, but it is easy to exaggerate the reality."
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