Deal still possible in Colombia-Novartis cancer drug talks : minister

BOGOTA (Reuters) - The door remains open for Swiss pharmaceutical company Novartis to reach a deal with Colombia to lower the cost of cancer drug imatinib and prevent the Andean country from allowing generic production of the medication, the health minister said.

A Novartis logo is pictured on its headquarters building in Mumbai February 6, 2014. REUTERS/Danish Siddiqui

Colombia asked Novartis NOVN.S to lower the price of imatinib, which is used to treat leukemia and other cancers, in an effort to save costs for the country's beleaguered healthcare system but negotiations broke down and prompted the country to announce it may declare a compulsory license.

Compulsory licenses permit companies to make cheaper generic versions of medications considered vital to public health, overriding drugs patents.

“We have not shut the door to negotiations, we’re keeping it open, but not for much longer,” Health Minister Alejandro Gaviria told Reuters in an interview late on Tuesday.

Government sources said the ministry’s deadline for reaching a deal is the end of May.

The drug, sold under brand names Glivec or Gleevec, was not under patent in Colombia between 2003 and 2012, sparking competition from generic producers whose prices are 197 percent cheaper than Novartis, according to the health ministry. The current patent is valid until mid-2018.

The declaration would mark the first time Colombia has used compulsory licensing. Thailand, India and Brazil have come under fire from pharmaceutical companies and the U.S. government for violating patents.

“Compulsory licenses are part of the rules of the game for all countries, they are exceptions to free trade agreements,” Gaviria said.

Each 400 milligram tablet of imatinib currently costs 129,000 Colombian pesos, around $43. The government had proposed to Novartis that the price be lowered to $18.50, but says the company did not take the offer. Imatinib is used by some 2,500 patients in Colombia.

“They have been very reticent,” Gaviria said. “They say they do not want to negotiate under the threat of compulsory licensing.”

Novartis, which would be allowed to charge Colombia compensation should a license be issued, told Reuters this week it is actively seeking a resolution.

The possibility of compulsory licensing has sparked worries among Colombian diplomats in Washington that approval could endanger $450 million in proposed funding for the so-called Peace Colombia aid package if an end to the nation’s 52-year-old conflict with Marxist rebels is reached.

An official from the U.S. Senate Finance Committee told diplomats the pharmaceutical industry fears it could set a precedent and may impact other Colombian interests in Congress, according to leaked diplomatic letters.

Reporting by Julia Symmes Cobb and Luis Jaime Acosta; Additional reporting by Michael Shields in Vienna and John Miller in Zurich; Editing by Alistair Bell