Brand-Name Drugs Versus Generic Equivalents – A Moral Dilemma

We are all aware of many high-priced drugs, some costing more than $10,000 a month for treatment, that have radically altered the course of a patient’s illness. We are also aware of a huge market in generic-equivalent drugs, many of which are similar in chemical composition and effect to their high-priced cousins.

Over the past several years, India has become the world’s largest producer of cheap, lifesaving generic medicines, which are distributed to impoverished countries around the world.

But in the United States and most European countries, many medicines with recognizable brand names are protected by patents and cannot be manufactured or distributed as generic equivalents. Despite this protection, India has, for many years, mass-produced the generic equivalents of many expensive and effective drugs to the poorest countries around the world by circumventing pattern regulations. Most of the major manufacturers have, until recently, looked the other way. Presently, however, there is a case in front of the Indian Supreme Court involving the drug Gleevec, a breakthrough cancer treatment for people with a deadly form of leukemia manufactured by the Swiss drug company Novartis. Novartis is trying to stop the Indian supply chain of inexpensive generics by forcing the Indian government to recognize the pattern of this drug in particular and, by inference, all brand-name drugs, thereby blocking distribution.

The particular case of Novartis and Gleevec presents a moral and business conundrum. The drug company is trying to stop Indian manufacturers from producing generic knockoffs and claims that the violation of patents and copyright laws would not allow Novartis to pursue research and development to create newer and better drugs. The Indian government, on the other hand, claims that if the large drug companies, like Novartis, prevail in the lawsuit, the worldwide supply of inexpensive medicine to treat cancer, AIDS and HIV, and other diseases would disappear.

The moral dilemma for a company like Novartis, a major worldwide developer and manufacturer of innovative (and expensive) drugs, is that in order to develop these drugs, the company must be profitable. These profits would then, in large part, go toward research and development and hopefully new and far-reaching discoveries. However, the high cost denies millions of patients, particularly AIDS and HIV patients in poorer countries, access to these drugs.

At the heart of the matter is the Indian government’s denial of the patent for Gleevec and similar drugs made by Western drug manufacturers. The Obama administration and the Pharmaceutical Research and Manufacturers of America, a drug industry lobby group, are applying considerable pressure on the Indian government to relent in the dispute. Their desire is that the Indian government agree to grant patents to generics in situations similar to that involving Gleevec.

Clearly, the drug companies would like to increase their investment in India, for both distribution and manufacturing, as sales in the emerging markets would then compensate for the expected decreased business in the United States and Western Europe.

Although Gleevec, originally approved by the Food and Drug Administration in 2001, can cost about $70,000 a year in the United States, Novartis insists that it offers hefty discounts in poor and underdeveloped countries. By comparison, the Indian generic version costs about $2,500 a year.

The question for a company like Novartis is, How do you balance the high cost of a drug and the need for a hefty profit in order to continue research and development against the worldwide need for generics across a wide swath of countries unable to afford the brand-name drugs?

The burden falls squarely on India, a country that exports about $10 billion worth of generic medicines per year. Doctors Without Borders estimates that 80 percent of the generic AIDS drugs it supplies to an estimated 170,000 people in Africa are made in India. Without a change in the patent laws, a humanitarian disaster is imminent.

The case before the Indian Supreme Court gets a little sticky because it involves a principle of Indian patent law that prohibits a new form of a substance from receiving a patent unless the formation significantly improves the medicine’s efficacy. This position was aimed at preventing a widespread practice among pharmaceutical companies known as evergreening, wherein the company makes minor changes of existing drugs and earns new patents. Evergreening can theoretically provide many additional years of patent protection from generic competition. At present, India’s patent law does not define efficacy or say how it should be measured.

In the end, the key to the case before the court and the moral conundrum to be solved is to interpret the law in a way that balances the need for innovation against public health concerns.

2018-02-14T20:22:55+00:00