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[e-drug] Letter to USTR re Indian compulsory licenses on dasatinib patents

E-DRUG: Letter to USTR re Indian compulsory licenses on dasatinib patents
[On behalf of UACT, the Union for Affordable Cancer Treatment, a new union
of people affected by cancer (see cancerunion.org), Manon Ress sent the
following letter to Ambassador Froman regarding the US/India dispute over
the CL for dasatinib. WJB]

Link to PDF of letter: http://cancerunion.org/actions.html

1621 Connecticut Avenue NW
Washington, DC 20006
Tel.: +1.202.332.2670http://cancerunion.org

Ambassador Michael Froman
United State Trade Representative
600 17th Street NW
Washington, DC 20508

Re: Indian compulsory licenses on dasatinib patents

October 29, 2014

Dear Ambassador Froman,

We represent the Union for Affordable Cancer Treatment (UACT) and more
generally people who share the conviction that cancer drugs should be
affordable and available to all.

We are writing because reports in Indian newspapers, television
stations and blogs suggest that you, in your capacity as the head of
the office of the United States Trade Representative (USTR), are
pressuring the Indian government to deny patients access to affordable
generic versions of dasatinib, a drug used to treat a rare form of

The issue involves patents held by Bristol-Myers Squibb for a cancer
drug, marketed by BMS under the trade name Sprycel, that treats both
Philadelphia chromosome-positive acute lymphoblastic leukemia (ALL)
and chronic myeloid leukemia (CML). Dasatinib is a critical drug that
fills an important gap in treatment, particularly for patients who
have developed a resistance to imatinib (a drug sold by Novartis under
the trade names Gleevec or Glivec).

The BMS price for dasatinib in India is 6,627 rupees for a daily dose
of 100 mg.[1] This is roughly $108 per day[2], for a country with a
per capita income of just $1,570 per year, and where most patients pay
for cancer drugs out of pocket.  Companies seeking a compulsory
license have offered to supply generic versions of dasatinib for $4
per day[3], and that price would likely fall if competition was

In our view, opposition to the granting of a compulsory license in
India is a de facto endorsement of excessive pricing, a rejection of
the goal of access to medicine for all, and a death sentence for
leukemia patients.

UACT recognizes that trade pressure on developing countries to make
drug monopolies stronger and prices higher has been a longstanding
objective of USTR, with bipartisan support in the U.S. Congress, but
this should change, for a variety of reasons.

The first and most obvious shortcoming of the current policy is that
high prices prevent most people in the world from having access to new
live saving drugs, and this by itself should settle the question. But
there are other reasons to reassess the decades old policy of
advocating for higher and higher prices on drugs, vaccines and medical

High drug prices create problems everywhere. In the United States, the
negative impacts are several. First, high prices create access
barriers for new medicines, often a consequence of restrictive
reimbursement policies by governments, insurance companies and
employers. Second, high drug prices drive up the costs of taxes,
insurance and out-of-pocket costs to patients. Third, since employers
pay for taxes and often directly or indirectly for the costs of drugs
for their own employees, higher prices in the United States make the
U.S. workforce less competitive in global markets, and encourages the
outsourcing of U.S. jobs.

When it comes to cancer drugs, the United States has a strong interest
in controlling the cost of new life saving drugs. While cancer affects
people of all ages, the probability of having cancer is much higher
for older persons. According to the NIH’s National Cancer Institute
(NCI), the rate of incidence for cancer is seven times higher for the
65 and older population, than the population under 65 years old. The
World Bank estimates that 8 percent of the world population is 65 or
older. But in the United States in 2011, 12.8 percent of the
population was 65 or older. According to the U.S. Administration on
Aging, by 2020 more than 16 percent of the U.S. population will be 65
or over, and by 2030, the percentage will be 19.3 percent.

If drug prices are not lowered, people living in the United States
will face greater restrictions on reimbursements and higher out of
pocket costs, and U.S. employers will become less competitive globally
(because of the higher taxes and insurance costs associated with
paying for those drugs).

Furthermore, the BMS drug Sprycel provides a textbook case of abusive
and unjustified pricing policies, in India, but also in the United

The development of Sprycel began with extensive U.S. taxpayer
investments in research on leukemia, and on the cancer fighting
properties of tyrosine-kinase inhibitors. This research led to the
development of three drugs, imatinib, nilotinib and dasatinib to treat
CML and ALL.

        imatinib and nilotinib

The first tyrosine-kinase inhibitor used to treat CML and ALL was
imatinib, approved by the FDA in May 2001. According to the scientist
Brian Druker, about 90 percent of the pre-clinical research on
imatinib was financed by the NIH, private charities and his
university. Much has been written about the relative role of the
public and private sector in the development of imatinib. One estimate
is that the Novartis out-of-pocket outlays on clinical studies were
$10 to $24 million. When adjusted for risks of failures and capital
costs, the estimate is in the range of $38 to $96 million.[4]

In 2007, following the BMS registration of dasatinib, Novartis
registered nilotinib (trade name Tasigna). Nilotinib, like dasatinib,
is used when a patient develops resistance to imatinib. Nilotinib was
approved based upon evidence from 438 patients, less than 10 percent
of the "average" number of patients in trials cited by various drug
company funded studies of drug development costs.

Novartis received 7 separate Orphan Drug designations for imatinib and
2 designations for nilotinib, each allowing Novartis to claim a 50
percent credit against the costs of clinic trials.

Despite the modest costs associated with the development of both
drugs, and the extent of US R&D subsidies, Novartis is aggressive in
its pricing of both drugs. In 2001, when first registered, the price
of Gleevec was about $80 per day for 400 milligrams. Today the U.S.
price of Gleevec is $287 per day, for the same dose, and the current
U.S. price for nilotinib is $318 per day.

Prices for imatinib/Gleevec and nilotinib/Tasigna are considerably
lower outside of the United States. For example, a 400 mg dose of
Gleevec ($287 in the United States) is $111 in Australia. $93 in the
UK, $130 in Denmark and $106 in the Netherlands. Nilotinib ($318 in
the United States) is $131 in Australia, and $140 in the UK.

In 2013 Novartis reported sales of $4.693 billion for imatinib, plus
$1.266 billion in additional revenues for nilotinib, or $5.959 billion
for both products.

        Development and price of dasatinib

Registered with the FDA in 2006, dasatinib was the second
tyrosine-kinase inhibitor approved by the FDA for the treatment of
leukemia. Like imatinib and nilotinib, R&D outlays for dasatinib were
modest. According to a study by Jacqueline Lee, the estimated
out-of-pocket cost of the clinical studies used in the 2006 FDA
approval were in the range of $7 to $26 million. Dasatinib qualified
for the Orphan Drug tax credit for trials involving both CML and ALL.

The roles of the NIH and non-profit organizations in the development
of these drugs were extensive, a fact illustrated by the 2009
Lasker~DeBakey Clinical Medical Research Award[5], which honored three
scientists, two of which worked at academic institutions, Brian
Druker[6], for his role in the development of imatinib, and Charles
Sawyers[7], for his role in the development of dasatinib. The federal
government’s role included not only extensive grant support for
academic researchers, but also direct sponsoring and funding of
clinical trials, as well as the 50 percent tax credit for the trials
sponsored by BMS .

Much like Novartis, BMS has been aggressive with regard to the price
of its leukemia drug. In 2006, Dasatinib was priced at $156 per day,
for a dose of 2 x 70mg per day. When the FDA subsequently recommended
a lower dose of 100mg per day, BMS responded with a 100 mg tablet
priced at $200. Today, that 100mg tablet has an average U.S. wholesale
price of $367. Prices for dasatinib are considerably lower in other
countries. For a 100mg tab, the price is $147 in Australia, $134 in
the UK, $150 in Canada, $172 in the Netherlands, and $147 to $188 in

        dasatinib in India

The BMS price for dasatinib in India is 165,680 rupees for 50 x 50mg
tabs.[8] A daily dose of 100mg is 6,627.2 rupees, $108 at current
exchange rates, and 25 times the average incomes in India.

The Indian Ministry of Health has requested that the Department of
Industrial Policy and Promotion (DIPP) issue a compulsory license for
dasatinib. The DIPP is reportedly opposing the compulsory license,
motivated primarily by concerns that a compulsory license would create
trade and foreign policy problems with the United States.

The decision to put off judgement on issuing a compulsory license came
during a period when the USTR officials have criticized the Indian
government over two other disputes involving drug patents, including
the US government criticism of the rejection of the Novartis
evergreening patents on imatinib, and US government criticism of the
Comptroller of Patent’s decision to grant a compulsory license on
Bayer’s patents on sorafenib, a $65,000 per year drug for kidney and
liver cancer.

According to various news reports and Congressional testimonies, you,
deputy USTR Wendy Cutler, other officials from USTR, the President of
the United States, Vice President Joe Biden, Secretary of State John
Kerry, Secretaries Commerce and the head of the US patent office have
all engaged India on its patent policies, as have Congressional
Committees and the United States International Trade Commission
(USITC). India is also the target of a USTR out-of-cycle review of
India's status on the Special 301 Report.

These and other actions represent a clear and concerted effort on the
part of the USTR and the larger executive branch to put pressure on
the Indian government, and to influence the intellectual property
policy of India in such a way as to severely restrict access to newer
medicines for cancer patients.

We are writing today both to ask for clarification regarding the
extent to which the USTR is actively discouraging the granting of a
compulsory licenses on the dasatinib patents (or other cancer drug
patents), but also to suggest that it is time for the United States to
change our trade policies as regard innovation and access to new
cancer drugs.

At present, the USTR has a simple policy regarding cancer drugs -- to
make them as expensive as possible everywhere in the world. This
extends even to the United States, as USTR is advocating for
provisions in the TPP trade agreement that will make it impossible to
reform US laws on test data exclusivity for biologic drugs, expand
evergreening of patents, and make it more costly and difficult to
grant compulsory licenses on drug patents.

If the USTR objectives in India are to reduce the number of compulsory
licenses, and to prevent developing countries from sourcing generic
cancer drugs from India, then it is going to extremes and
systematically ending any hope for cancer patients to live longer and
better lives.

For leukemia patients, high drug prices are the problem and not the
solution.  Low drug prices are a desired outcome, not a threat.

In the United States, there are consequences of $100,000 and higher
prices for cancer drugs, including restricted access[9], crushing
co-payments, and a less competitive US workers and businesses, and in
the absence of policy changes, these problems are only going to get
worse, given projected demographic changes.

The United States may, to some extent, succeed in getting other
countries to pay higher prices for drugs, but it is highly likely the
United States will continue to pay the higher cancer drug prices,
causing unnecessary death, pain and bankruptcy (referred to as
financial toxicity in a recent 60 minutes program[10]) in the United
States, and leading to a less competitive workforce.

The United States must push back on high drug prices.
Dasatinib/Sprycel is a case in point. The Sprycel price per milligram
has more than tripled since the the registration of the drug, and US
consumers are paying two to three times more than other higher income
countries, for a drug developed with U.S. government R&D subsidies.

One way that governments can push back on the high drug prices is to
refuse to reimburse the drug. That is the approach that many
governments have taken. For example, in the UK, a review by NICE in
2012 found that "dasatinib [was] more effective than imatinib. But it
could not recommend dasatinib because . . . its high cost did not
justify the benefits provided."[11] Even those governments that do
reimburse dasatinib, do so only in limited cases that are more
restrictive than the medical needs. UACT is opposed to governments
relying upon threats to restrict cancer patient access as a mechanism
to control drug prices.

A different way to push back on high drug prices is to directly
regulate the prices of drugs, or to impose sanctions when prices are
excessive.  One powerful way to impose sanctions on unreasonable
prices, or more generally to protect the interests of consumers, is to
eliminate the legal monopoly on a product, such as by granting
compulsory licenses on patents, or to limit the remedies for
infringing a patent. We note that in an August 3, 2013 letter to US
ITC Chairman Irving Williamson, you cited the legislative history of
Section 337 of the trade act to overturn an injunction on the
importation of Apple smart phones and tablets that infringed patents
held by Samsung.[12] This same authority should be used to permit the
importation of affordable generic drugs.  The threat of doing so would
clearly have a first order impact on the prices of drugs in the United
States, as was the case in 2001, when the U.S. government used the
threat of a compulsory license to cut by 50 percent the price of
ciprofloxacin, to address a health crisis that involved the death of
five persons.

By taking a holier than thou or maximalist approach on intellectual
property rights in trade negotiations, USTR necessarily makes it more
difficult for other U.S. federal or state government agencies to
explore the limitations on patent rights needed to address the current
crisis in the pricing of drugs in the United States.  Governments need
to expand rather than restrict access to newer life saving drugs.

Concerns about R&D investments for new drugs are important, and UACT
is fully committed to robust funding of innovation for new treatments
and diagnostics for cancer. However, in this regard, pushing only for
higher drug prices is a flawed approach. USTR and other federal
agencies need to make the funding of global R&D the focus of
negotiations, and to acknowledge that high prices on life saving drugs
are a very limited and costly way to induce investments in medical

Perhaps you can ask your staff the following questions:  Which
negotiating objective is consistent with both innovation and access,
and human rights, and U.S. national interest, given the shifting
demographics in the United States, and which one is likely to be
sustainable? (1) Asking India to forgo compulsory licenses on a cancer
drug that costs $108 per day, in India, or (2) asking India to expand
its public sector outlays in cancer research? Should we be asking our
trading partners in high income countries to raise the price of
dasatinib to $367 per day, or asking that they expand public sector
funding of R&D?

Finally, should we begin to confront the fundamental and historic flaw
in policy that links R&D funding to drug prices, in a world with
immense suffering, and huge disparities of incomes? Are we willing to
acknowledge the high cost of the current system, that returns just 8
cents per dollar of global sales in R&D, and which often wastes much
of that 8 percent on medically unimportant R&D projects?

Spending your time opposing access to affordable dasatinib for
leukemia patients in India is a poor use of your time and your
negotiating skills.

We request a meeting with you to discuss these issues further.


Manon Anne Ress

cc:  Smt. Nirmala Sitharaman
Minister of State for Commerce and Industry

cc: Susan Wilson, USTR
cc: Shira Perlmutter, USPTO


Table 1: Age distribution of population, 2013 (Source World Bank).

Country                 Ages 65+        Ratio of age 65+ to age 15- 64
        Brazil                  8       11
        China                   9       12
        India                   5       8
        Japan                   25      41
        United States           14      21
        World                   8       12
        Low income              4       7
        Middle income           7       10
        Lower middle income     5       8
        Upper middle income     8       12
        Low & middle income     6       9
        East Asia & Pacific     8       11
        Europe & Central Asia   10      15
        Latin America &
                Caribbean       7       11
        Middle East &
                North Africa    5       8
        South Asia              5       8
        Sub-Saharan Africa      3       6
        High income             16      24
        Euro area               19      29


Table 2: Older Population as a Percentage of U.S. Total Population:
1900 to 2050, Source: U.S. Administration on Aging

        Census  ----Age-----
        Year    60+     65+
        1900    6.4%    4.1%
        1910    6.8%    4.3%
        1920    7.5%    4.7%
        1930    8.5%    5.4%
        1940    10.4%   6.8%
        1950    12.2%   8.1%
        1960    13.2%   9.2%
        1970    14.1%   9.9%
        1980    15.7%   11.3%
        1990    16.8%   12.6%
        2000    16.3%   12.4%
        2010    18.4%   13.0%
        2020    22.2%   16.1%
        2030    24.7%   19.3%
        2040    25.1%   20.0%
        2050    25.5%   20.2%

[1] 165,680 ruppes for 50mg x 50.   (Enough for 25 days, at 100 mg per
day). http://www.medindia.net/drug-price/dasatinib/sprycel-tab.htm.
[2] $39,480 per year, or more than 25 times the per capita income.
[3] Indian Health Ministry seeking compulsory license for BMS’s
Sprycel.  The Pharma Letter.  August 19, 2014.
[4] R&D costs for Gleevec. April 2013. http://www.keionline.org/node/1697
[5] http://www.laskerfoundation.org/awards/2009_c_description.htm
[6] Oregon Health & Science University. Druker is names as a principal
investigator or project leader for 59 NIH funded projects, and 80 NIH
funded sub-projects.
[7] Memorial Sloan-Kettering Cancer Center. Charles Sawyers is named
as a principal investigator or project leader for 34 NIH funded
projects, and 16 NIH funded sub-projects.
[8] http://www.medindia.net/drug-price/dasatinib/sprycel-tab.htm
[9] Including less access to off-label use for super expensive drugs,
eliminating opportunities for patients with failing treatments to
[10] Lesley Stahl, The cost of cancer drugs, 60 minutes, October 5,
2014. http://www.cbsnews.com/news/the-cost-of-cancer-drugs/
[11] Dasatinib, nilotinib and standard-dose imatinib for the
first-line treatment of chronic myeloid leukaemia.
[12] http://www.ustr.gov/sites/default/files/08032013%20Letter_1.PDF
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