Roche vs Cipla: Will the Real Price of "Tarceva" Please Show Up?

Last Thursday, Arun Jaitley finally wound up his arguments on behalf of Cipla. A very impressive performance and I can see why Cipla won relatively easily at the first instance. As SpicyIP suspected in its last post, Jaitley completely downplayed the “public interest” argument. Perhaps a wise, strategic move, given that Justice Shah was beginning to express concerns about openly endorsing a rule that hinged on pricing and might have operated as a de facto compulsory licensing/pricing regime. Abhishek Singhvi (counsel for Roche) can be expected to resurrect the “public interest” and pricing argument when he rebuts Cipla’s contentions on Monday.

It bears noting that Jaitley did touch upon “pricing” issue briefly, while reiterating before the appellate court that the price of Tarceva (as printed on its box) was Rs 4800 per pill. Interestingly, he also pointed out something that was first raised by SpicyIP many months back i.e that NICE (a UK government authority) had rejected Tarceva as too expensive! He even relied on the very same Dow Jones report that SpicyIP had quoted from! I quote from our earlier post in this regard:

Jason Douglas of Dow Jones reports that:

” The U.K’s National Institute for Health and Clinical Excellence said Thursday that Roche Holding AG’s (RHHBY) drug Tarceva has been turned down as a treatment for non-small cell lung cancer because it’s too expensive.

NICE said Tarceva could not be considered a cost-effective use of the U.K.’s state-run National Health Service’s resources compared to Sanofi-Aventis’s (SNY) Taxotere.

NICE, which determines whether drugs should be available on the NHS in England and Wales on the basis of their effectiveness and value for money, said the cost of Tarceva was considerably higher than acceptable. It found Tarceva was GBP 2,100 more expensive to buy per patient than Taxotere and said it was not persuaded that Roche had proved its drug, known generically as erlotinib, had an equivalent survival benefit to Taxotere, or docetaxel.”

However, I am given to understand that the above decision by NICE has been succesfully appealed against by Roche and overturned. In other words, the NICE decision rejecting Tarceva as too expensive is not valid anymore. I am yet to confirm this, but should any of our readers have more information on this, please do let us know. Or we’ll have to wait and see what Roche’s attorneys have to say about this when the matter comes up for rebuttal on Monday.
So How Much Does Tarceva Really Cost?

In several earlier posts, we pointed out inconsistencies in Roche’s argument on the Tarceva price. While they claimed in court (before Bhat J) as well as in the press that the tablet costs only Rs 3200, the packaging in the market (which Cipla produced in court) speaks otherwise i.e. Rs 4800 per tablet (which coverts to about Rs 1.4 lakh per month for a patient). Justice Bhat naturally preferred the hard evidence produced by Cipla (i.e. the packaging) to the word of Roche. Jaitley produced this packaging in court on Thursday and insisted once again that the price was Rs 4800. I wonder how Abhishek Singhvi (counsel for Roche) is likely to react to this. Since Justice Bhat (the trial judge) found in favour of Cipla on this count, it is very unlikely that the appellate would disturb this “factual” finding, unless there was a clear/manifest error.

Since I’ve been perplexed about this pricing issue, I spoke with an uncle of mine, Dr Mirza Hussain, a cancer specialist at the RCC (Regional Cancer Center), Trivandrum. He’s treated several patients with Tarceva in the past. He informs me that although the open market price for Tarceva is Rs 4800 per tablet, RCC was able to negotiate a lower price of Rs 3200 from Roche. In other words, a powerful institution such as the RCC could strike a good bargain with Roche. But he cautions, this price is strictly for RCC patients only and Roche has left strict instructions to ensure that this cannot be traded in the open market (sort of the way military canteen goods in India are subjected to arbitrage).

When I asked him about whether or not all his patients could afford the Rs 3200 tab, he shrugged his shoulders and said “Of course not”. I asked: “Could they afford Cipla’s tablets at Rs 1600? And he shot back: Well if it’s a poor labourer who earns Rs 100 a day, then whether it is Roche’s Rs 3200 or Cipla’s 1600, it does not make a jack of a difference to them. And then I asked: So how should we help them? Do we let them die? Should the government step in? Has the government stepped in? He balked: The government!! And gave the most pitiful look that I’ve seen come from him in all these years. I got the message and moved on to other more pleasant topics.

ps: On the “pricing” issue in relation to life saving drugs, check out this wonderful piece by CH Unni in the Mint, where he states that:

“Patients on a regimen of high-value cancer drugs imported into the country continue to pay up to 35% more than the international prices—the result of import duties that are yet to be removed or reduced despite the government having exempted life-saving cancer drugs from all import duties in early 2007.

The delay seems to be a result of inter-ministerial red tape. “We have our limitations in judging the priority of these life-saving drugs. So, we are awaiting timely recommendation from the health ministry for notifying these drugs on the list,” said an official with the finance ministry who did not wish to be identified.”

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

One comment.

  1. AvatarAnonymous

    Dear Mr. Basheer,

    In the course of an article I am writing, I have had to re-read all your wonderful posts on the Roche Cipla litigation. While initially it seemed to me that the Cipla strategy was too agrresive and the validity of a patent should be all that is necessary to determine this case, after re-reading the comments by the doctor you quoted- it seems heart wrenching to think that the future of millions of patients who struggle to deal with the disease and financial support, all hinge on this decision.

    Keep up the good work SpicyIP! You guys are doing a fantastic job of recording IP histpry over the years.


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