Patently wealthy
"Over the next two years, the heirs of Fritz Hoffman, founders of Roche, one of the world's most powerful pharmaceutical companies, and who already rank as among the world's richest families, could see their combined £10 billion fortune reach giddy heights. Twenty members of the founding family control Roche, which industry analysts estimate will benefit from the Tamiflu drug thought to relieve the symptoms of avian flu, with extra profits of £500 million this year and £1bn next. And since the family owns about 10 per cent of shares and crucially 50.01 per cent of voting rights, they will ensure that no outside interests seize their company and enjoy the profits - though many would like to.
"As avian flu spreads from south east Asia into Europe, sparking fears of a worldwide epidemic that medical experts say could claim 50 million lives, Roche, famous as the company behind the Valium tranquilliser, appears poised to clean up. The Basel-based company is already the fastest growing drugs firm in the world with a share performance to match. Investor returns have increased 50 per cent in a year. Last week its share price reached record highs after it said third-quarter profits rose by 20 per cent to £3.9bn.
"And that growth is primarily due to a drug it did not even invent. It was US biotech firm Gilead that developed Tamiflu. But nine years ago, Gilead signed a development and licensing agreement with Roche. It is currently the subject of legal action which will be resolved in a year. Gilead claims Roche has been negligent in its manufacture of Tamiflu which has led, Gilead says, to a series of product recalls. Gilead also says Roche has failed to market the product well, which has reduced the potential revenue the drug could have made. Roche categorically refutes the allegations.
"But as legal action rumbles, Roche faces other possibly more serious threats. The firm is under unrelenting pressure to increase production of Tamiflu. In the US, senator Charles Schumer has threatened legislation compulsory to license Tamiflu unless Roche allowed generic producers to boost the number of pills in circulation. The senior Democratic senator for New York accused Roche of 'putting profits ahead of world safety'. He has threatened with other Republicans to introduce legislation to force Roche to relax its stranglehold on the drug.
"Pressure appears to have paid off. Last Thursday, after a month of holding its position, Roche said it would talk to four generic drug manufacturers about increasing production. But health campaigners say this is no guarantee that Roche will act. And if it does, it will delay matters as long as possible so it gets the most revenue possible before low-cost manufacturers get in on the act.
"Michael Bailey, of campaigning group Oxfam says: 'This situation is absurd. A government will have to make a move because Roche seemingly can't deliver. It's a classic case of international intellectual property law not working. It seems Roche is holding on as long as possible before allowing generic companies the right to produce so it can make as much cash as possible.'
"Although its expertise is not disputed, the firm has been no stranger to controversy. In the Seventies, Stanley Adams, a Roche employee, handed over documents to the European Economic Community as it was then, detailing how the company kept the price of vitamins high with the explicit collusion of its supposed rivals. But an EEC bungle identified Adams. Roche decided to prosecute and he was imprisoned under tough Swiss commercial secrecy laws. His wife then committed suicide.
"Twenty years later, Roche was at it again - marshalling a price-fixing cartel in exactly the same product. It was fined more than $500m by US and EU competition regulators." http://observer.guardian.co.uk/business/story/0,6903,1598469,00.html
When you recall that patents are government granted and protected monopolies, I have long had the notion that a patent should be revoked if the holder abused it, such as failing to exploit the patent by withholding production, entering into price-fixing cartels or other anti-trust behaviour. Along with the monopoly should come the obligation to act responsibility with the patented product. Don't fine them, if there's an abuse of patent, just revoke the patent. Should go for copyright, too, Mr Gates.
"As avian flu spreads from south east Asia into Europe, sparking fears of a worldwide epidemic that medical experts say could claim 50 million lives, Roche, famous as the company behind the Valium tranquilliser, appears poised to clean up. The Basel-based company is already the fastest growing drugs firm in the world with a share performance to match. Investor returns have increased 50 per cent in a year. Last week its share price reached record highs after it said third-quarter profits rose by 20 per cent to £3.9bn.
"And that growth is primarily due to a drug it did not even invent. It was US biotech firm Gilead that developed Tamiflu. But nine years ago, Gilead signed a development and licensing agreement with Roche. It is currently the subject of legal action which will be resolved in a year. Gilead claims Roche has been negligent in its manufacture of Tamiflu which has led, Gilead says, to a series of product recalls. Gilead also says Roche has failed to market the product well, which has reduced the potential revenue the drug could have made. Roche categorically refutes the allegations.
"But as legal action rumbles, Roche faces other possibly more serious threats. The firm is under unrelenting pressure to increase production of Tamiflu. In the US, senator Charles Schumer has threatened legislation compulsory to license Tamiflu unless Roche allowed generic producers to boost the number of pills in circulation. The senior Democratic senator for New York accused Roche of 'putting profits ahead of world safety'. He has threatened with other Republicans to introduce legislation to force Roche to relax its stranglehold on the drug.
"Pressure appears to have paid off. Last Thursday, after a month of holding its position, Roche said it would talk to four generic drug manufacturers about increasing production. But health campaigners say this is no guarantee that Roche will act. And if it does, it will delay matters as long as possible so it gets the most revenue possible before low-cost manufacturers get in on the act.
"Michael Bailey, of campaigning group Oxfam says: 'This situation is absurd. A government will have to make a move because Roche seemingly can't deliver. It's a classic case of international intellectual property law not working. It seems Roche is holding on as long as possible before allowing generic companies the right to produce so it can make as much cash as possible.'
"Although its expertise is not disputed, the firm has been no stranger to controversy. In the Seventies, Stanley Adams, a Roche employee, handed over documents to the European Economic Community as it was then, detailing how the company kept the price of vitamins high with the explicit collusion of its supposed rivals. But an EEC bungle identified Adams. Roche decided to prosecute and he was imprisoned under tough Swiss commercial secrecy laws. His wife then committed suicide.
"Twenty years later, Roche was at it again - marshalling a price-fixing cartel in exactly the same product. It was fined more than $500m by US and EU competition regulators." http://observer.guardian.co.uk/business/story/0,6903,1598469,00.html
When you recall that patents are government granted and protected monopolies, I have long had the notion that a patent should be revoked if the holder abused it, such as failing to exploit the patent by withholding production, entering into price-fixing cartels or other anti-trust behaviour. Along with the monopoly should come the obligation to act responsibility with the patented product. Don't fine them, if there's an abuse of patent, just revoke the patent. Should go for copyright, too, Mr Gates.
Labels: Big Pharma, Monopoly and cartel
posted by Guambat Stew at Monday, October 24, 2005
0 Comments:
Post a Comment
<< Home