http://www.nytimes.com/2003/06/05/business/05DRUG.html?ei=5070&en=076fa610fcc595e2&ex=1055908800&pagewanted=print&position=

Company's Vow to Donate Cancer Drug Falls Short

By STEPHANIE STROM and MATT FLEISCHER-BLACK

hen Novartis, one of the world's largest pharmaceutical companies, set out to give away a revolutionary cancer drug to people around the world who could not otherwise afford it, the company promised that no patient who needed the medicine would go without it.

It was an incredibly ambitious pledge. Often, drug companies donate in bulk to public health systems to combat epidemic diseases like AIDS or malaria. Novartis, however, set out to build a system that would evaluate the health and finances of individual cancer patients scattered around the globe. Those who qualified would get Glivec, a capsule that combats certain types of leukemia and stomach tumors, at no cost. Experts estimate that as many as 600,000 patients — most of them in poor countries — could benefit.

Two years later, 2,000 patients in the United States have gotten free Glivec, which costs an average of $27,000 a year. But elsewhere, doctors and patients say, the effort is off to a fitful start — one that has exposed Novartis to criticism that its charity is a stalking horse for its commercial goal of building Glivec sales to $1 billion annually.

For example, in India — a country that holds huge promise for Western drug makers — Novartis began its donations of Glivec with a warning that it would halt the program if the government let local companies eat into its profits by selling generic versions of the drug.

Hundreds of Indian cancer patients got Glivec free, and commercial sales soared, as well. But after India cleared generic Glivec for sale, Novartis made good on its threat last month, saying it would leave it to Indian companies to meet the needs of the indigent.

The Glivec donations are a study in both the promise and the perils of corporate philanthropy. Across a wide span of industries, a growing number of companies are giving away products and services, entwining doing good with doing business.

Drug makers, their images battered by criticism of high drug prices, have become some of the world's biggest corporate philanthropists. NeedyMeds, an online service that provides information about donation programs, lists 213 of them in the United States alone, giving away 1,030 drugs that treat everything from AIDS to hay fever.

With Glivec, Novartis has stumbled in reaching the neediest people. Its international patient assistance program — run by a tiny nonprofit group that Novartis selected after established charities turned down the job — has gotten the drug to just over 1,500 patients outside the United States. In the 49 poorest countries, where Novartis estimates that 9,500 patients could be helped by Glivec, the program has reached 11 people, according to the latest count.

In wealthier countries like South Korea, Hong Kong and New Zealand, Novartis, meanwhile, has encouraged patients who have received free drugs to become advocates, pressing public health systems to pay high prices for the drug. One company document declared that drug donations — along with media campaigns and legal tactics — were part of a concerted plan to win reimbursement for Glivec.

"The glorified term `patient assistance program' is nothing but a marketing strategy," said Dr. Arun Bal, a medical ethicist in Bombay.

Novartis acknowledged encouraging patients to campaign for access to Glivec. A spokeswoman said that the internal document was probably genuine, though officials could not recall creating it. But the company denies that its program has commercial aims. It is not intended "to obtain or lobby for treatment reimbursement," said Gloria Stone, a Novartis spokeswoman.

Beneficiaries care little about the company's motives. The family of Vasamvada Shukla, a 52-year-old woman in Bombay, had almost bankrupted itself trying to pay for Glivec, selling land it had owned for generations for the $2,769 monthly cost. Then Mrs. Shukla was accepted for the free program. "We went to the temple to pray and give thanks," said her daughter Prachi.

The Partnership

How Novartis Found the Max Foundation

Glivec is a miracle drug for the new century, the first in a class of medications that fight cancer cells without being toxic to healthy cells. Clinical trials showed that it restored healthy blood counts in 9 of 10 patients with chronic myelogenous leukemia, or C.M.L., one of the four main types of the disease. Recent studies have shown Glivec to be effective against other diseases, as well.

To get the drug to needy patients in the United States (where it is called Gleevec), Novartis selected Documedics, a fast-growing company with 110 employees.

Finding someone to handle the effort in the rest of the world proved more troublesome.

Paula Boultbee, global director for brand management of Glivec, said that Novartis was looking for an organization that had experience with cancer patients, particularly those with leukemia, and had run an international drug donation program. An administrator would have to be on top of customs, tax and shipping rules, transportation conditions and the structure of health care systems in scores of countries.

Novartis said it ran the idea past organizations it had worked with before, like Doctors Without Borders and the International Red Cross, but found no takers. Among the issues, cost loomed large: budget projections submitted by some prospective partners were twice Novartis's own estimates.

"The vast majority recommended that we not do such a program," said Dr. David R. Epstein, president of Novartis Oncology, the unit dedicated to cancer treatments.

So Novartis officials jumped to respond in March 2001 when the Max Foundation, an obscure Seattle-area charity that helped cancer patients in Latin America, sent the company an e-mail message asking for a donation of cyclosporine, an immunosuppressant, for a patient in Honduras.

A few days later, Ms. Boultbee, the Glivec brand manager, left a message for Max's founder, Pedro Rivarola, asking him to fly to New Jersey to discuss plans for Glivec.

They met for the first time on April 2. A month later, the Food and Drug Administration formally approved Glivec. And in July, Dr. Epstein sent a memo to company executives around the world proudly announcing that Novartis was establishing a drug donation program aimed at ensuring that "no CML patient will be denied treatment with Glivec for financial reasons."

He described the effort as "the most generous and far-reaching access program ever developed for a breakthrough cancer therapy," adding that the intent was to help the company "achieve its therapeutic and business goals" for the drug.

A slide presentation prepared by Novartis a month earlier was more explicit in outlining the path to meeting the latter objective. "Max Patient Advocacy Work," it said, would be directed at "payers," "physicians," "patients," "media," "legal pressure" and "community involvement," all with a single aim: "OK Reimbursement."

With financing of $1 million a year from Novartis, the Max Foundation rented an office, hired an administrative staff and began building a computer system that could handle the program, called the Glivec International Patient Assistance Program, or Gipap. According to Dr. Epstein's memo, Novartis granted the foundation "sole and final responsibility for approving each single patient's eligibility" for the program.

The assignment was an astounding leap for an organization that reported revenue of just over $20,000 the year before. The foundation was a mom-and-pop operation, established to honor the memory of Mr. Rivarola's son Maximiliano, who died in 1991 of the leukemia that Glivec combats. Ms. Stone, the Novartis spokeswoman, said "they were one of the only foundations dedicated specifically to helping C.M.L. patients, and therefore they understood both the scientific aspects of the disease and the desperation of patients seeking a treatment or cure."

It did not take long, however, for many patients and their advocates and doctors to question Novartis's choice — and for a program intended to sow good will instead to breed conflict.

By January 2002, objections from around the globe began appearing in online discussion groups dedicated to C.M.L. Patients complained that eligibility requirements were out of step with the way doctors were prescribing the drugs. Some patients were getting the drug and others were not, for reasons not easily discerned.

"A C.M.L. friend of ours in Singapore who had applied for Gipap got 37 percent worth of Glivec free," Anjana Rai Chaudhuri, a chemist in Singapore whose husband has leukemia, wrote on a Yahoo bulletin board. "He has to pay for 63 percent himself. There is no `free' Glivec as we have been led to believe."

In part, the frustrations stemmed from the inconsistency of medical standards from nation to nation. Novartis requires patients' treatments to match local drug regulators' guidelines for Glivec. While the United States has approved Glivec as a first-line treatment, many countries recommend it only after other drugs have failed.

Yet the reports of Glivec's success have led doctors to prescribe it for their patients anyway. A result is that patients who qualify for assistance on financial grounds — often because they have bankrupted themselves buying the drug — are rejected because they have not first taken an older drug, interferon. And "many of them can't afford that either," said Robert W. Neill Jr., a North Carolina real estate developer who administers an Internet list for leukemia patients.

Yet for some patients, the rules are bent. Sourabh Ghosh, an Indian student studying in Switzerland who is a volunteer for the Max Foundation, said he had been receiving Glivec since last June, even though he has never taken interferon. Rakesh Nagpal, a 41-year-old father of twins in New Delhi who makes $4,800 a year, said he was also getting the drug without having first taken interferon.

Such inconsistencies abound. Fatima Ouassini, a patient in Tangiers, Morocco, waited seven months for acknowledgment of her application, said her son, Khalid Hmam. Mr. Hmam, who runs an electronics repair business, e-mailed, faxed and finally called the foundation. He said that he was told by Patricia Garcia-Gonzalez, who runs the program and is married to Mr. Rivarola, that there was nothing it could do, because Glivec had not been approved in Morocco.

But when he sought help from Life Raft, a support group for patients with the tumors his mother has, he was able to get Glivec directly from Novartis.

Ms. Garcia-Gonzalez said that the foundation had met patients' needs while running the program on lines dictated by Novartis.

"We have done an outstanding job managing the program, and more than 1,000 patients are benefiting from it," she said. "I believe we should be judged for what we do and not for what is still to be done."

Novartis is satisfied with the Glivec program, Dr. Epstein said. "Considering how much there was to learn when we set it up, it's done remarkably well," he said.

While Novartis alienated some patients with the fitful start of Gipap, another, larger group became vocal advocates for the company's interests after receiving Glivec free.

Under a special program, these 7,500 patients got Glivec as Novartis undertook clinical trials, country by country, to win regulatory approvals. But once Glivec is approved, the company stops supplying it under the special program; patients must then seek Glivec through private or government insurance and other conventional channels.

But instead of becoming angry at Novartis, patients have protested to governments and have helped win victories for the company.

In South Korea, for example, the Ministry of Health and Welfare initially set the price of a Glivec capsule at $15, lower than what Novartis wanted. The company refused to sell the drug at that price, and as the two sides bickered, patients held demonstrations. Novartis encouraged them, promising to reimburse patients for a portion of their co-payments. In January, the government and Novartis agreed to a price of almost $18 a capsule, a 20 percent increase over the government's original offer.

Under terms of the national health plan, that means patients will pay $243 to $486 a month for the drug, depending on their dosage, keeping it out of reach for many, according to Hee Seob Nam, a patent lawyer turned patient advocate in Seoul. When patients protested the new price outside Novartis's office in February, 13 were arrested and one protester was injured so badly he had to be taken to the hospital.

In March 2002, as Novartis was having a similar wrangle with Hong Kong authorities over Glivec's price, it sent a letter to the 53 patients in clinical trials there, telling them that the trials were ending and their free drugs would be cut off in July 2002, according to a patient who received the letter.

Another patient in Hong Kong said that Novartis hired the public relations firm Ruder Finn to help patients get their stories of financial distress into the newspapers. Patients lobbied through the summer and fall, and in December, the government went along with Novartis's price.

When Novartis told 30 patients in New Zealand a year ago that their free Glivec supplies were about to end, Wayne McNee, the head of Pharmac, the country's drug purchasing agency, issued a press release branding the move "a marketing exercise to increase pressure on getting Pharmac to fund the drug."

He has not changed his opinion, though the agency agreed in October to purchase Glivec. "There was no doubt that by threatening to remove the medicine, it put pressure on the funding decision," Mr. McNee said in a telephone interview.

Advertisement

Novartis sees no reason to shy from mobilizing patients in such disputes. "Patients play a key role, and they're going to continue to play a key role," said Dr. Epstein of Novartis Oncology. "I think it's the wave of the future, and it's a good thing. It helps drug manufacturers get closer to the people we're doing this work for."

Nowhere has Novartis been more active in giving away Glivec than in India. About 44 percent of the Max Foundation program's beneficiaries live there. But while the company's generosity is applauded, its motives have been questioned.

Novartis started the program in India with a warning. "They had told us all in the beginning that they will stop the program if somebody launches a generic version in India," said Dr. P. P. Bapsy, an oncologist at the Kidwai Memorial Institute of Oncology, the leading cancer hospital in Bangalore.

To some doctors in India, the warning underscored the pragmatic aims of the company's philanthropy. The giveaway was a means, they contend, to establish a commercial beachhead in India's brutally competitive drug business. If Novartis somehow managed to ward off generic versions of Glivec, India could be a huge market for the drug and a bellwether for other emerging markets.

After all, India's middle class is growing, and private insurers like Cigna and others have begun selling insurance more widely there, hoping ultimately to cover 100 million to 300 million Indians, according to a report by McKinsey & Company. Moreover, starting in 2005, global trading rules will require India to honor drug company patents. So brand-name drug manufacturers like Novartis have hopes of wresting away a bigger share of the Indian market, where 76 percent of sales are controlled by local companies.

A Key Market

Generic Competitor Starts Sales in India

The market for Glivec certainly seemed promising. Profits at Novartis's Indian unit in the quarter ended Sept. 30 were 48 percent higher than a year earlier, thanks in large part, the company said, to Glivec sales.

But those results are unlikely to be replicated. On Jan. 26, Natco Pharmaceutical, a generic drug maker based in Hyderabad, began selling generic Glivec under the name Veenat. A month's supply costs $377, versus $2,769 for Glivec.

Mente Subba Rao, a Natco spokesman, said that the months-long process of winning government approval for Veenat, while swift by American standards, seemed unusually long and tedious. "We are guessing that Novartis attempted to pressure the drug controller," he said, referring to India's top drug regulator.

That suspicion was echoed in an interview with Dr. Yusuf K. Hamied, the chairman of a Natco competitor, Cipla, which is planning its own generic version of Glivec.

Asked if generic licenses had been delayed because of pressure from Novartis, Ashwini Kumar, the drug controller of India, said, "No comment." In response to the same question, Ms. Stone said in an e-mail message that Novartis had provided information on the manufacture of Glivec to the drug controller's office.

With Veenat's approval, Novartis made good on its threat, announcing that as of May 1 it would accept no more applications for the Glivec giveaway program in India. Since a generic version is available, the company said on its Web site, generic manufacturers should "shoulder some of the responsibility" of supplying the drug. It also chided the Indian government for failing to respect international patents.

"Within Novartis's capabilities," the company said, patients in the Max Foundation program will continue to get the drug.

Novartis offered to turn over its donation program's apparatus to Indian manufacturers, but Natco, at least, did not wait for the offer to try its hand at mixing commerce and charity. With an eye on rivals like Cipla, it already had established a giveaway program for Veenat in conjunction with the Cancer Patients Aid Association, which had sought the same role in Novartis's program.

Ms. Garcia-Gonzalez, meanwhile, has asked Natco to take over the Max Foundation program in India.

Chowdary V. Nannapaneni, Natco's chairman, said the company had agreed in principle to give three-month supplies of Veenat to 200 patients screened by the foundation.

Natco, Mr. Nannapaneni said, does not want poor patients to suffer on its account. "We are not as big as Novartis," he said, "but we are eager to help needy Indian patients in the best way we can."