Tuesday, April 02, 2013
Dilemma
Novartis AG has lost a court battle in India to sustain patent protection for its cancer drug, Glivec. This raises business and PR questions for the company. Does it abandon India and let cheaper generics serve the sick? Does it stay in the market and cut price, thereby opening gray-market opportunities for enterprising distributors who can buy the drug cheaply in India and sell it for full price elsewhere in the world? Does it maintain price and lose to generic competition? There are no good answers in situations like this, and they are not uncommon. Much of business has challenges that do not fit into boxes. There are no formulas for what to do. A CEO has to make a decision in the absence of information, and the choice may in time prove spectacularly wrong -- or right. Novartis has plans. It would be foolhardy not to. The company is putting them into effect in light of the court's decision. Almost certainly, the loss of patent protection will influence the way that the company works in the market in the future. Will it keep other patented drugs out of India? One shouldn't be surprised if it does, but then it opens itself to charges that it is letting people die out of a profit motive. Another dilemma.
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