Colombia’s government is giving pharmaceutical giant Novartis a few weeks to lower prices on a popular cancer drug or see its monopoly on production of the medicine broken and competition thrown open to generic rivals.
Health Minister Alejandro Gaviria’s remarks in an interview Tuesday are the strongest yet in an increasingly public fight with the world’s biggest drugmaker that could set a precedent for middle-income countries grappling to contain rising prices for complex drugs.
Memos leaked last week to a nonprofit group, written from the Colombian Embassy in Washington, describe intense lobbying pressure on Colombia, a staunch U.S. ally, from the pharmaceutical industry and its allies in the U.S. Congress.
In one memo, the embassy warns that breaking Novartis’ patent for the leukemia drug Gleevec could hurt U.S. support for Colombia’s bid to join the proposed Trans-Pacific Partnership trade zone and even jeopardize $450 million in U.S. assistance for a peace deal with leftist rebels. The memos followed meetings between Colombian diplomats and officials from the Office of the U.S. Trade Representative and a Republican staffer on the Senate Finance Committee whose chairman, Sen. Orrin Hatch of Utah, has close ties to the pharmaceutical industry.
Gaviria, an economist by training, said the pressure shows the forceful steps that the pharmaceutical industry is willing to take to protect its commercial interests.
“They’re very afraid that Colombia could become an example that spreads across the region,” he said.
Government health programs in many countries are being squeezed by high prices for newly launched drugs and by annual price hikes of 10 percent or more for medicines long on the market, and they are increasingly pushing back by demanding big discounts or setting price caps on ultra-expensive drugs.
Gaviria denies he is trying to set a precedent in the global fight for lower prices.
“For us, it’s a question of survival,” he said. He noted Colombia’s health care system guarantees patients’ access to all approved drugs and the budget is straining after years of price rises. In 2009, the government declared a public health emergency after spending on sophisticated drugs had risen tenfold in just a few years.
“As the state, you can’t just buy everything at the price set by whoever is selling. But unfortunately that’s what happened many times,” Gaviria said.
Novartis has rejected Gaviria’s proposal to reduce the price for Gleevec to 140 pesos (5 U.S. cents) per milligram. That is less than half the current regulated price but still well above what generic versions cost before they were banned when, after a decade of litigation, a Colombian court in 2012 awarded Novartis an exclusive patent on one of two forms of the drug.
In an April 20 letter, Novartis’ local affiliate said that it doesn’t consider it convenient to initiate negotiations over prices and that the decision to override patents should be taken only in exceptional circumstances and not used as a bargaining tool.