Thursday, April 04, 2013

Novartis judgment: Myth and Reality

In a must read write-up, Debunking Big Pharma's canard against Novartis judgment: Myth and Reality, Prof. Brook K. Baker, Professor of Law at the Harvard University and Senior Policy Analyst Health GAP, explains the essentials of the recent Indian supreme court verdict -- a landmark one that stood India up. Here is a sample to get you going.
Myth 8: The Novartis decision undermines the global search for new medicines.

Fact: Of all the canards, this is probably the most ludicrous. Big Pharma makes the vast majority of its profits on sales to rich patients in rich countries. Nearly 75% of global drugs sales by dollar volume in 2011 was in Europe, North America, and Japan. Indian sales comprised less that 2% of global sales. Drug giants do not make R&D decisions or shut down promising drug candidates because they didn't squeeze a little extra profit out of small market.

To the contrary, drug companies waste a lot of research dollars now trying to evergreen existing medicines instead of focusing on truly innovative medicines. They spend nearly 2 1/2 times on marketing and administration as they spend on R&D. Despite the "risks" of R&D they still retain more in profits than they actually spend each year on R&D.

[Thanks Prof. Guhan Jayaraman for email share]


  1. Anonymous said...

    Small Corrections: Brook Baker is at Northeastern University, not at Harvard university.

    Thanks for posting this: somehow all the people shouting "India is hampering innovation" don't realize that contrary to the spin Novartis PR is trying to put on the event, the Supreme Court did not deny Novartis on the grounds that "your drug is too expensive" or "if we grant you the patent, Indian manufacturers will suffer", but on a technical analysis of the new ground and finding that it was simply not "innovative" enough. Now that must be something pretty damning for a company trying to project it as a champion of innovation and lawful intellectual property rights, shouldn't it?

  2. gaddeswarup said...

    Check Arvind Subramanian's comments