Novartis chairman Daniel Vasella
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Many pharmaceutical firms have drawn criticism for extending their franchises through frivolous lawsuits blocking equivalent generic drugs that are much less expensive. To allow drug companies to recoup investments and collect healthy returns, the Hatch-Waxman Act of 1984 gives companies 20-year monopolies from the day they patent a product. (After that, revenues from a drug can drop as much as 80% within months as generics erode the market.) The law allows drug firms a 30-month monopoly extension to resolve patent disputes. That loophole is much abused. Companies often sue generic manufacturers just to buy time.
Vasella points out that bringing a drug to market can take a decade and that the glacial pace of drug development and FDA approval puts companies under tremendous pressure to extend exclusive rights to their drugs. Better, he suggests, to grant a drug market exclusivity for a limited period that starts only after it obtains FDA approval.
That sounds reasonable, like most of what Vasella says. But consider what happened two summers ago, after the Greenpeace protesters unplugged their stereo and took the helicopter home. "I got the impression that after this talk, things moved faster," says Stefan Weber, who had breakfast with Vasella that morning. It's telling, however, that the problem has not yet been solved. There are apparently too many technical difficulties--and too many other companies involved. --With reporting by Odette Frey/Zurich