September 14, 2016

A Step Back for Colombia

Since March, the Colombian Ministry of Health (MoH) has pursued extreme actions that would essentially undermine the patent of innovative leukemia medicine, Glivec. In new developments today, Colombia took one more step toward coercing the patent holder, Novartis, to make the drug available at Colombia’s unilaterally reduced price. These disturbing actions erode the economic certainty and innovator confidence that is crucial for access to medicines to go uninterrupted.

Why should this be of concern to the rest of the world? All countries need access to life-saving medicines. In order for the private sector to develop those new and innovative cures, certain legal and regulatory frameworks must be in place around the world. Strong intellectual property (IP) laws comprise one of those critical frameworks, providing the legal certainty that private investment in innovation can be sustained over time.

Industry has long harbored concerns with countries that undermine IP rules for short-term access to cheaper medicines. In years past, countries such as India and Ecuador have utilized compulsory licenses to achieve this objective. These countries use compulsory licenses to suspend an innovative company’s patent term to allow production of lower priced copies of the medicine. However, international trading rules require that compulsory licenses be used only in exceptional circumstances, such as public health emergencies. Both the Indian and Ecuadorian government have utilized compulsory licenses to enable a generic company to make a lower-cost medication in the absence of such a genuine health emergency, which is inconsistent with their trade obligations and undermines innovative investment. Industry is concerned that we are now seeing this same troubling behavior repeated in Colombia.

As is so often the case, the devil is in the details. And innovative industry is concerned that the Colombia missed some of those salient details. In the case of Glivec, parent company Novartis went to great lengths to make the drug available and affordable to the Colombian government.  Since it was first introduced into the Colombian market, Glivec has met the government’s mandatory pricing caps. In fact, the price has been lowered twice over the last three years – by the government – and Glivec is currently priced 39% below what the Colombian Government requires under its own pricing rules.

Industry fully recognizes that for the Colombian patients suffering from this particular type of leukemia an innovative medicine is a lifeline. However, two other generic medicines with the same active ingredient, imatinib, already exist in the Colombian market. As part of Colombia’s universal healthcare system, the government could just as easily purchase the generics for the Colombian patients in need of treatment, rather than manipulate the price of the Novartis medicine.

While the issuance of a DPI is technically one step short of issuing a compulsory license, it is a difference seeking a distinction, and the precedent set is equally damaging. Today’s actions send a troubling message to other nations that a government can unilaterally decide to subject a patented medicine to price cuts at will. These arbitrary decisions do much more than create an unstable market for investors; they jeopardize Colombian citizens’ future access to medicines by driving away medical R&D and foreign direct investments (FDI).

Colombia – a stable, pro-growth economy – has long been a leader in the Latin American region. The U.S. looks to Colombia to implement policies that other nations in the region can replicate in order to match Colombia’s level of economic growth and development. And yet, the Colombian Health Minister is asking Colombia to be a follower by replicating the policies seen in markets like India. U.S. industry strongly encourages the Colombian government to reverse course for the sake of its own citizens in order to remain a leader in the region and continue on the path to becoming a true knowledge-based economy.

Patrick Kilbride is the executive director of international intellectual property for the U.S. Chamber of Commerce Global Intellectual Property Center.

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