Friday, April 5, 2013

Novartis: Confusing R&D with Patent Trolling, marketing with FUD, and justice with "my ball, my rules" aka polite-bullying

Oh, and it is not even their ball. Maybe that is the best form of bullying. It is like me telling Rahul Gandhi to return the 2 Lakh Rupees he owns me since the last 5 years. Or else....

At least that is what the Indian legal system told them.

Maybe I am a bit harsh on the marketing/FUD part, but who cares as long it makes for a cool-sounding but rather long heading? Long headings <--> credibility!

The whole thing has been documented in our newspapers, like the Hindu and the Indian Express, even with timelines and all, so its better I take to rant-mode sooner rather than explaining the whole thing.

For what its worth, the term Big Pharma will sound similar to the term Protection Racket to me for some time.

The judgement

It is very easy to go on and criticise our system, the polity, the electricity dudes, the TV channels, the bureaucracy, the traffic police, (my favorite) the IRCTC website, the neighbor's dog, pretty much everybody. And our judiciary too.  But have a look (or just see the headings on different pages) at the 112 pages long judgement in this case (something I have not been able to do, its beyond my capabilities I think), and maybe, like me, you will feel good about it.

I think its fair that I did not read the judgement in its entirety, because I did not read the patent applications either. And I am sure neither did the owners of Novartis.

It is not an isolated case. The SC's recent bashings of Punjab and Bihar state governments against unnecessary force against a young woman and agitating teachers respectively, and another ongoing issue in the court against the use of police as security for petty politicians, some even with a criminal past is appreciable too. As far as looking at the Supreme court goes, we are living in interesting times.

From the internet and the newspapers, it looks like our SC took a broad perspective and provided the Novartis judgement on the ground of the latest application being a case for evergreening. Another aspect was scolding them for expecting a favorable decision just because they had a well drafted appeal and all.

Looks like there is hope for infrequent, grammatically-and-politically-incorrect writers like me, after all. If only I could lay my hands on a law degree...


So, turns out patent trolling is not something that only Big Pharma deals in. It happens in lots of other fields.

Software is one of such fields. And one of the motivations for me writing this post (apart from other bloggers, SethTheWizKid and I-HEARD-YOU, and some friends telling me to write, overtly and covertly) was a recent post by Joel Spolsky, on the issue of trolling in software patents. This post by Joel was widely discussed on hackernews.

There is a company called Rackspace that is fighting against a patent troll. You might want to read their declaration of war on their blog, and another story elsewhere regarding the same troll's head, some Erich guy.

The above text aside, what surprises me is the overall pattern that rich (or soon-to-be-rich) people follow in bullying others is the same, more or less.

Novartis, and profits, and the need for bullying, almost in the same order

What I lack in economic knowhow, I am gonna make up in terms of fun that I have while writing.

Getting to basics of any kind of business, business is nothing but the process of doing something for others, or fulfilling a need, and expecting them to pay you for it. Some would call it the art of doing something that was not required, or fulfilling a need that was not a need in the first place, and then expecting others to pay you for it.

Doing something or fulfilling some need is not as simple as a YES or NO thing. It has two other aspects in my opinion, how important it is in the opinion of the user, and how important it is in reality. Which is which does not really matter, what matters is that both the aspects boil down to essentially one thing: desperation. 

The thing about the importance of something is that it is not a one-way thing, unless it is. Which turns out to be mostly. I might be desperate for getting people to my blog via advertising, but I am not desperate enough to pay for advertisements. So, no go, advertisements. But what if I have a bet with a friend about getting to, say, 10,000 views? My desperation will get a bit real. What if somehow I wind up jobless and hopeless, and the only way to get going is to make money from this blog? Now we are talking!

What you will pay for something, or whether you will pay at all, depends on how desperate you are for that thing.

Another desperation example: if a random dude had a hundred bucks, and he wanted to buy some chocolate, he would use some of the money. But if he had to walk a mile just to buy chocolate, he might not do it. This is because his desperation in this case is offset by the fact that he would have to walk a mile. But if he had a girlfriend and she wanted a chocolate, and he did not have any money, and the nearest shop or store was 10 miles away, he think he would crawl to the place and loot the shop/store and crawl back. Not the best example, but you get the point.

What happens if we were to up the stakes? What if it was a life and death matter for a near family member, and you were told that taking some magical pill might save them? Most people will do anything to get that pill and save that family member. That is where Big Pharma, or in this case, Novartis comes in, their superpower being your desperation!

There are very high chances that your family member can survive if you are willing to shell out a lot of money for them, to Novartis. A great company that works its ass off day in, day out, for the sake of the sick people in the world. But wait, if they really were that serious, they could have decreased the costs for their medicines. Looks like they are more desperate for money than most of us are for our lives.

What do you do to ensure that you have profits? Simple, make sure others cannot rip you off. We have something called patent law for that. This law means 2 things:

1. for 20 years, no one can copy your thing and make profit for it, unless,
2. they have (written?) permission from you.

This is necessary to make sure that the innovators get their due. But, the 20 years thing means that will only happen for a fixed time, and then it is a kind of free for all. Since Novartis is more desperate for money than you are for your family member's life (shame on you), they will do anything and everything to make sure they have the selling rights in exclusivity, even after the time limit.

How do you get a patent on something that you had patented a few years back? Simple. Show that the something you have now is better than the one before. For this, part (d) in Section 3 of Chapter II of the (Indian) Patents Act, 1970 reads something like the following:
3. What are not inventions? The following are not inventions within the meaning of this Act
(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.
Explanation. For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;
The last paragraph kind of kills it for the purpose of evergreening by Novartis and Big Pharma in general. But wait, why would Novartis want to evergreen its patent on this medicine? The reason is the big generic drug industry in India, which caters not only to Indians, but to others too in the subcontinent and more importantly, Africa. One of these companies, Cipla, has been working really well in this aim of reaching to everybody (for profit of course). According to wikipedia, in 2001, when they reduced the cost of their AIDS medicine to $350 per patient per month, they led the the International Aids Society to state after a decade:
Cipla’s dramatic price reduction, which received widespread media attention, hammered the message home that many of the multinational drug companies were abusing their market monopoly in the face of a catastrophic human disaster.
(Too bad the wikipedia reference to that page returns a 404)

So, the second problem in the Big Pharma model, after the evergreening one is the urge to serve only a few people with expensive drugs rather than everyone with cheap drugs. What difference does it make? Well, no apparent difference. You can serve one person for $100, or 10 persons for $10 each, or 100 people for $1 each.

The real reason is that big multinationals drive on scarcity, and desperation. Except that after the time limit of 20 years, this option leaves itself out. I am sure you have heard/read the following- We did all we could, spent every last dime on his/her treatment, but to no avail.

Now to the need for bullying. Novartis India CEO saying something on the lines of No multinational drugs company is going to invest in India, you are all gonna die like dogs, you are all doomed, hahahahaha is, in its simplest form, bullying. (I don't think I get a copyright on stating his words in the simplest form, do I?)

This statement, whatever it was (I don't feel like quoting it exactly), is nothing but telling us to suck it up and just do what they want us to do, in terms of innovation and judging and our buying choices etc. Such statements are like poison to people suffering from rare forms of diseases who are normally told by doctors about a new drug in testing phase. And, our record as a nation on clinical trials is not very good, but the Supreme Court is working on that too, and more importantly, making the respective ministries work on that too.

(By the way, there is this great book, called Big Pharma, that I will read someday)

Who stands to benefit?

Something I learnt after working for a while, was that companies have three groups of people: owners/shareholders, management/employees and customers/clients. (Considering outsourcing as employees only)

Companies' allegiances lie only with the owners/shareholders. I don't think it is fair enough, but that is what happens. In this aspect, pharma companies are a bit good, with the concept of sweat equity and all.

But the problem is the only people who will benefit from the evergreening fad are the owners, when it should have been a case of patients benifitting from the drugs. If Novartis wants so much money, they should really try the recreational drug market!

Another party that really benefitted was the lawyers, but I saw how Jolly got beat up by other lawyers, so I am not gonna say anything about them. :-)

Wrapping up

The fun of writing on Novartis has now given way to boredom, so, here are a few points that I would like to write before I go on and do something else.
  1. Novartis, and all big western multinational pharma companies are evil.
  2. The need greed for generating more money is more important to them than the lives of the people their drugs can save.
  3. Somehow, these companies find ways of overestimating their investment and therefore making the costs for drugs skyrocket. Examples include showing marketing expenses as genuine R&D expenses.
  4. What is it with the time required to produce a drug? Is it really 10-15 years? How much is it excluding marketing? Also excluding the initial, no-research, only documentation phases etc.?
  5. India is not the only such nation, Indonesia is too. And I am sure others will follow.
  6. All big companies, irrespective of their field or lobby-ability must remember that India is a sovereign socialist secular democratic republic, and that at least in the near future (40-50 years), we are going to take a left-of-centre approach on most issues.
  7. Getting your management officials to say silly things does not really change anything. Ditto for your silly organisations in US or elsewhere.
  8. If you are so good at lobbying and R&D at the same time, you should try getting the government to change the patent law, and get a patent for testosterone occurring in its natural form. That way you might be able to control the whole world in terms of reproduction. And countries like India, with so many people and growing will be like little kittens in your hands.
  9. Maybe it is their drugs talking, but Novartis seems to have forgotten a basic business thing: if you won't provide something people want, someone else will. So, cry all you want, some other (preferably not similar to you) company will fill the void that you leave after you move out from India. Or, you will not move out, because we are such a huge fricking market!

To Novartis: this was me having some fun at your expense. If you feel this was not the best thing to do at my (a random person's) part, you have got bigger problems than patent issues and all. If you do not like it, please consider changing your tactics. I hope you won't sue me, but if you do, remember that I am kind of bankrupt. 

Also, if you intend to keep on with these silly, over the top court cases, consider providing a free medicine for vomiting, at least to me :-) :-)

In any case, remember that you are serving the market, it is NOT the other way around.

Feel free to have me as a researcher or a lawyer or a marketing professional or as a strategic guru. Then maybe we can delete this post :D



  1. I had very little idea about the whole issue, now am pretty much clear. Liked the way you compared "Desperation" with the whole issue and concluded the whole thing in a very clear & light manner.

    The issue seems pretty interesting, will read more about it now.. Thanks :)

    Happy Blogging!

    1. Thanks for your interest.

      An article in today's Hindu tells another story: that most of the research effort on Glivac was done by some US government R&D agency. If this is true, Novartis people indeed are bastards :-) (no offense to Mr. Zimmerman, I am sure he is a great researcher who means well)

      Happy Blogging to you too!

    2. Sorry, it is Glivec and blogger is not letting me edit the previous comment :-)

  2. Very nice indeed!! "Desperate" part was awesome. Never thought about business that way! Totally enjoyed it!

    1. I am pretty sure that the theory except the word 'desperate' is from somewhere else, I am just not able to think from where.

      Do check out these articles by Paul Graham:

      Not exactly related, but good nonetheless.

  3. Finally you wrote and what an article..! Quite a time reading it but I am with Novartis in this war. It's because of 2 things-
    R&D of such drugs is invariably an expensive process and no doubt they would want to protect their intellectual property. Secondly, in India drugs in India are sold at the rate of probably 1$ or 2$ max. For these foreign companies it is just a waste to invest in such markets. For them it is like selling potatoes and they know what they are selling is not potato! And we should not forget that they only have this patent weapon to take down rivals..the same case like apple and samsung. They are free to use it. No one can term them as "greedy" merely coz' they filed a lawsuit. And R&D is just not an expensive process. It has more complexed equations related to it. It is just not a single process, it is a series of process hard to write about in a single paper.
    But beneath all of this even I can't deny that these companies are blatantly greedy and would go to any extent for earning every penny.

    1. Thanks for your kind words.

      On the Novartis front, I think both your arguments are neither wrong nor right. Because yes, patents are not evil, and yes, it is not wrong to sell at high prices. It is better if I take them together.

      No doubt R&D is an expensive process. But the problem arises when these companies want to sell their drugs at sky-high rates. A human's life is priceless, and these companies are trying to take it literally.

      Do you know that these companies conduct human trials in India and other third world countries? And again, literally at the cost of potatoes?

      Protection of IP is something that is allowed for 20 years max, reason being that further development, by the same company or others will stall. What Novartis is doing in this case is trying to extend their patent beyond 20 years.

      Your argument about the less rates in India is right. I worked in an outsourcing company for 6 months, and they were happy to take work at the rate of $15-16 per hour (Rs. 450 per hour). What happens to western companies trying to sell their stuff here is the opposite. But such things happen in all markets and industries. 40 years before, there were no personal computers, and today, maybe you wrote your comment from a phone! If other industries can get cheap over time or because of the competition, why can't Big Pharma?

      If they wanted to make money, they could have done so by indulging in drug/weapon trafficking or some other such way. Why get in the business of saving lives, and then make it difficult all over again?

    2. Couldn't debate after your last argument :P And my studies....oh cock! Its weird to talk like this, I shall send you a fb friend request or give me your gmail talk id..

  4. So beautiful... and so you! Unique. Love it! :0)