India,Novartis and free market capitalism

To begin, some words from a late colleague and friend:

"The term “social enterprise” in the various but similar forms in which it is being used today — 2008 — refers to enterprises created specifically to help those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest. Put another way, social enterprise aims specifically to help and assist people who fall through the cracks. Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not."

Those words  might well have been a prediction of his own end.

The news that an Indian court have rejected the Novartis patent claim for Gleevec (US) or Glivec(UK) has a personal dimension for me. Three years ago, it was the drug that saved my life when I was diagnosed with Chronic Myeloid Leukaemia.

It came at a crucial time during our activism for the economically disenfranchised when both my colleague and I had potentially fatal medical conditions. For me, born into and raised under the UK National Health Service, it meant access to this particular drug. For my colleague, an American without health insurance there was no such safety net.

His was a condition for which only Interferon offered some hope and in Eastern Europe where he was based, though more affordable than being treated in the US, we were still looking at a cost of around $10k.  There was a Russian drug, Immunofan which had helped him respond earlier to an infected bite, and this came at a cost of about a tenth of Interferon. It was all we could afford. Having committed all profit to our humanitarian mission, a cost for which we had no contingency.plans.  He was dead six months later.

Karmelle, an American mother, had been an early contact in our efforts to raise awareness of Ukraine's disabled children in care and last year, many of us helped her crowdfund cancer surgery to save her life.

We'd taken a stand to adhere to our principles as a self-sustaining social enterprise. Terry had rejected my suggestion that we crowdfund his treatment. That was charity, as far as he was concerned and he was taking a stand for social impact investment to remove vulnerable children from institutions.

Though Glivec had been my salvation, like Interferon, it would simply have been outside our budget were it not for the NHS. The cost of around $70,000 annually exceeding our total revenue.  Put in the same position as my colleague, only the generic version would have been affordable.

Novartis' case for extension of patent is that they need to maintain this revenue stream to fund research into new drugs. I'm now being treated with one of these, Tasigna, which was offered when I failed to respond to Glivec after a year.  It had only just been approved in the UK by N.I.C.E., the body which weighs the qualifying life years (QUALY) of my treatment against the cost. As Polly Toynbee pointed out in an article from about a year ago, drug companies often use the N.I.C.E funding levels as the target price of their products rather than what a free market would otherwise determine.  

It was several years later that the concept of Creating Shared Value caught the imagination of business. The fundamental difference between this and what I describe as " profit for purpose" is that shared value is an argument that corporations can profit from a purpose.    

According to the Guardian "They saw a shared value opportunity in selling their pharmaceuticals in rural India, where 70% of the population lives. The obstacle was not the prices they charged but the social conditions in the region: a chronic lack of health-seeking behaviour in the community, healthcare providers with virtually no healthcare training, and tens of thousands of local clinics without a reliable supply chain. Looking through a shared value lens, Novartis saw these social problems as business opportunities: they hired hundreds of community health educators, held training camps for providers, and built up a distribution system to 50,000 rural clinics.

For Novartis, the result was an entirely new business model that is essential to their future. In the coming decade, emerging markets with similar challenges are predicted to account for 75% of the growth in global pharmaceutical sales. For 42 million people in India, the results are access to a vastly improved level of healthcare that neither government nor NGOs were providing."

As I'd said earlier, we'd taken a stand for a self-sustaining business model in the world of social enterprise, where many others are supported at the cost of the state.  Novartis UK on the other hand, depends on the state to support the price of its product, distorting what is described as the principle of a free market.  Were it not for state funding or the private health insurers the business model would be unsustainable.

As one of 50 million Americans without health insurance and many more in developing countries, in my deceased colleague's own words he became one of  "those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest".

In Ukraine, with the 'Death Camps, For Children'  bulletins, we'd raised awareness of profit maximisation from institutional childcare. This was no less than the unbridled capitalism of organised crime where many children perished through neglect:

"This is not a research activity where many, if any, other people dared to participate.  UNICEF was willfully blind to the matter because it was just too dangerous to bother to intercede  Powerful interests remained entrenched with enforcers to make it dangerous.  Jurists were correct, in my view.  It was more a mafia operation than anything else, aimed at misappropriation and laundering of large money.  That was perfectly congruent with how Ukraine operated before the revolution.  USAID wanted nothing to do with it, nor would they fund any organizations or activists who might try.  Some things could be done and some things could not be done.  Helping these children was something that could not be done.  So, I exposed it and made it the central focus and metric of Ukraine’s microeconomic development blueprint.  In that context, it was far more difficult to ignore, dismiss, or argue about.  For about six months, I really did not expect to survive. "

 

In 2008, calling for their support for a 'Marshall Plan' in Ukraine, the only response from USAID had been that there was insufficient budget for this group of "handicapped and mentally retared children".

When I approached the US Embassy in the final week of his life, I'd been told that a clinic offering higher standards of care were not within my colleague's budget, As we may observe, the NHS is increasingly leaning toward the private sector model of the US, and perhaps it may not be too long before I too, represent an expendable overhead.        

In defence of Novartis, I recall that back in 2001, they'd helped me gain access to treatment for a friend in Russia who faced the prospect of leg   amputation due to diabetic complications.  It is from experience, an organisation which can demonstrate compassion. Novartis say, that their patient access program ensures nobody is denied access to treatment in developing countries.  

Novaritis can afford this philanthropy because of the revenue from developed countries and that comes from the people in the form of taxation or insurance premiums.  It might be compared to selling cheaply produced shoes at premium prices such that someone in a developing country is shod. In the case of Novartis however the contribution is not optional.

India's ruling favours the real market that some refer to as the bottom of the pyramid  The market that Novartis disregarded while investing in protecting their lucrative turf.

Thanks to Miljenko Williams for bringing the video about IP protection below to my attention:

 

 

 

 

     

 

 

     

 

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