Novartis Strategic Move

In a major development, the Thai Government has decided not to issue a compulsory license on anti-cancer drug Imatinib Mesylate after Novartis strategically agreed to provide free Imatinib to cancer patients’ having a household income less than 1.7 million baht (US $ 51,515) per year under the government-sponsored Universal Health Insurance Programme. The drug will be provided free through the Glivec International Patient Assistance Programme (GIPAP) managed by Max Foundation. Describing the agreement as “win-win situation” for patients and the company, Dr. Vichai Chokevivat, advisor to the public health minister and chairman of the Public Health Ministry’s committee on compulsory license, praised Novartis for its decision. According to Chokevivat, the Universal Health Insurance Programme covers 48 million people of Thailand’s 63 million people. He further pointed out two other healthcare schemes – the social security scheme for employees of private companies and the healthcare scheme for civil servants - could afford Imatinib at market price (3,600 baht per tablet) for their patients. This strategic decision will not only allow Novartis to avoid enforcement of compulsory license, but also continue selling patented Glivec to patients in Thailand who can afford the market price.

Although Novartis made no comment on the deal, but obviously the decision has great strategic value. Firstly, the patent for Imatinib will not be overridden by the compulsory license and secondly, generics will not be allowed in Thailand. The later having the more strategic significance, as it will keep generics off-market till patent expires. Remember, the strategic value of patent protection is to keep competition out of the market. The whole episode will surely bring some praise to Novartis philanthropy and keep Generics note of such strategies, it can surely work out in favour of research-companies and make them poor-patients’ better friends (free drugs hmm … interesting).