After weeks of deliberations, the Colombia health minister is proceeding with plans to unilaterally lower the price of a Novartis cancer drug that has become the latest symbol of the battle between access to medicines and intellectual property rights.

The amount of the reduction has not been announced, but Colombia media reported Health Minister Alejandro Gaviria may drop the price for Gleevec by up to 45 percent. Patient advocacy groups note that the annual cost of the drug is roughly $15,000, compared with per capita gross national income of about $8,000. This would amount to “significant savings for the whole health system,” the patient groups said.

[UPDATE: Gaviria tells us that the health ministry planned to set the new price this month, but has just received a formal petition from the US Trade Representative seeking 30 days to submit. “We are studying the petition. In any case, we don’t want to put this off much more,” he tells us.]

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In explaining his actions, Gaviria has argued that issuing a so-called Declaration of Public Interest, which allows the government to take various steps to reduce the price of a medicine, would be justified since the cost for Gleevec is out of reach for some citizens. The government began exploring this step after talks with Novartis failed to yield a lower price.

His decision, which came after the government rejected appeals by the drug maker, is the latest development in a closely watched struggle. Patient groups see it as a test case for using legal rights to ensure needed medicines are accessible, while the pharmaceutical industry views it as a potentially precedent-setting case in which a middle-income country uses trade rules to lower its drug costs.

The episode drew particular notice, though, after Gaviria initially earlier this year considered pursuing a compulsory license. This would allow the Colombian government to sidestep the Novartis patent on Gleevec so that a lower-cost version could be produced. Countries can issue such licenses under the terms of a World Trade Organization agreement.

For its part, the pharmaceutical industry has argued that compulsory licenses should be reserved for public health emergencies and as a measure of last resort. Fearing that the moves by the Colombian government might embolden other countries to quickly take similar steps, the industry turned to Washington for backing.

Last spring, staffers from both the US Senate Finance Committee and the US Trade Representative’s office met with Colombian embassy officials in Washington D.C., and suggested that Washington might withdraw support for a free trade agreement and $450 million in backing for a peace initiative between the Colombian government and Marxist rebels.

The move, however, created a mini-backlash among some Democratic lawmakers and appeared to have hardened the resolve of Gaviria and his health ministry. In June, he signaled he would move ahead with a unilateral price reduction, although he has not ruled out the possibility of issuing a compulsory license, either.

“We condemn the behavior of Big Pharma, their gremial representatives, and their supporters’ governments (effort) to press the government of Colombia in order to stop a sovereign power from …  protect(ing) the fundamental right of (its) people and the financial sustainability of the health system,” three patient groups — Mision Salud, Fundacion Ifarma, and Cimun — said in a statement.

A Novartis spokesman sent us a note saying the company believes the declaration “was issued improperly and creates an unwarranted and damaging precedent that could apply to any patent-covered innovations, not just pharmaceuticals. Declarations can be important and legitimate tools in exceptional circumstances, such as when public health is at immediate risk and cannot be addressed by any other means. This is not the case with Gleevec.

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“Currently all patients in Colombia who need Glivec have access to it. There is no public health crisis, no shortages, and no evidence of other access issues. The government exerts price controls … and has reduced the price twice in the last three years,” he continued. He added generic versions that do not infringe the patent are available. However, government officials previously noted that Novartis has indicated any trace of its own drug appearing in a generic would be considered a patent violation, suggesting litigation might ensue.

In a statement, Brian Toohey, a senior vice president for international issues at the Pharmaceutical Research and Manufacturers of America trade group said “the Colombian Government’s actions are without merit … Ad hoc price cuts are not effective or sustainable ways to improve access or achieve other critical public health goals. Pricing systems should be based on transparent rules and fair processes that provide business certainty for pharmaceutical innovators.”

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  • ‘Pricing systems should be based on transparent rules…”. Who is Mr Tooey trying to kid? Apply that standard to ‘the system of pharmaceutical product pricing’ and black is the new crystal, as it were.

  • US has a sterling history of withdrawing support in fights against Marxist rebels in Latin America. The last time we withdrew support Anastasio Somoza wound up assassinated and Daniel Ortega essentially became El Presidente for life. PhRMa is in way over its head on this one.

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