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NY Times business section reportsDocument Transcript
June 5, 2003
Company's Vow to Donate Cancer Drug Falls Short
By STEPHANIE STROM and MATT FLEISCHER-BLACK
When Novartis, one of the world's largest pharmaceutical companies, set out to give
away a revolutionary cancer drug to people around the world who could not otherwise
afford it, the company promised that no patient who needed the medicine would go
It was an incredibly ambitious pledge. Often, drug companies donate in bulk to public
health systems to combat epidemic diseases like AIDS or malaria. Novartis, however, set
out to build a system that would evaluate the health and finances of individual cancer
patients scattered around the globe. Those who qualified would get Glivec, a capsule that
combats certain types of leukemia and stomach tumors, at no cost. Experts estimate that
as many as 600,000 patients — most of them in poor countries — could benefit.
Two years later, 2,000 patients in the United States have gotten free Glivec, which costs
an average of $27,000 a year. But elsewhere, doctors and patients say, the effort is off to
a fitful start — one that has exposed Novartis to criticism that its charity is a stalking
horse for its commercial goal of building Glivec sales to $1 billion annually.
For example, in India — a country that holds huge promise for Western drug makers —
Novartis began its donations of Glivec with a warning that it would halt the program if
the government let local companies eat into its profits by selling generic versions of the
Hundreds of Indian cancer patients got Glivec free, and commercial sales soared, as well.
But after India cleared generic Glivec for sale, Novartis made good on its threat last
month, saying it would leave it to Indian companies to meet the needs of the indigent.
The Glivec donations are a study in both the promise and the perils of corporate
philanthropy. Across a wide span of industries, a growing number of companies are
giving away products and services, entwining doing good with doing business.
Drug makers, their images battered by criticism of high drug prices, have become some
of the world's biggest corporate philanthropists. NeedyMeds, an online service that
provides information about donation programs, lists 213 of them in the United States
alone, giving away 1,030 drugs that treat everything from AIDS to hay fever.
With Glivec, Novartis has stumbled in reaching the neediest people. Its international
patient assistance program — run by a tiny nonprofit group that Novartis selected after
established charities turned down the job — has gotten the drug to just over 1,500
patients outside the United States. In the 49 poorest countries, where Novartis estimates
that 9,500 patients could be helped by Glivec, the program has reached 11 people,
according to the latest count.
In wealthier countries like South Korea, Hong Kong and New Zealand, Novartis,
meanwhile, has encouraged patients who have received free drugs to become advocates,
pressing public health systems to pay high prices for the drug. One company document
declared that drug donations — along with media campaigns and legal tactics — were
part of a concerted plan to win reimbursement for Glivec.
"The glorified term `patient assistance program' is nothing but a marketing strategy," said
Dr. Arun Bal, a medical ethicist in Bombay.
Novartis acknowledged encouraging patients to campaign for access to Glivec. A
spokeswoman said that the internal document was probably genuine, though officials
could not recall creating it. But the company denies that its program has commercial
aims. It is not intended "to obtain or lobby for treatment reimbursement," said Gloria
Stone, a Novartis spokeswoman.
Beneficiaries care little about the company's motives. The family of Vasamvada Shukla, a
52-year-old woman in Bombay, had almost bankrupted itself trying to pay for Glivec,
selling land it had owned for generations for the $2,769 monthly cost. Then Mrs. Shukla
was accepted for the free program. "We went to the temple to pray and give thanks," said
her daughter Prachi.
How Novartis Found the Max Foundation
Glivec is a miracle drug for the new century, the first in a class of medications that fight
cancer cells without being toxic to healthy cells. Clinical trials showed that it restored
healthy blood counts in 9 of 10 patients with chronic myelogenous leukemia, or C.M.L.,
one of the four main types of the disease. Recent studies have shown Glivec to be
effective against other diseases, as well.
To get the drug to needy patients in the United States (where it is called Gleevec),
Novartis selected Documedics, a fast-growing company with 110 employees.
Finding someone to handle the effort in the rest of the world proved more troublesome.
Paula Boultbee, global director for brand management of Glivec, said that Novartis was
looking for an organization that had experience with cancer patients, particularly those
with leukemia, and had run an international drug donation program. An administrator
would have to be on top of customs, tax and shipping rules, transportation conditions and
the structure of health care systems in scores of countries.
Novartis said it ran the idea past organizations it had worked with before, like Doctors
Without Borders and the International Red Cross, but found no takers. Among the issues,
cost loomed large: budget projections submitted by some prospective partners were twice
Novartis's own estimates.
"The vast majority recommended that we not do such a program," said Dr. David R.
Epstein, president of Novartis Oncology, the unit dedicated to cancer treatments.
So Novartis officials jumped to respond in March 2001 when the Max Foundation, an
obscure Seattle-area charity that helped cancer patients in Latin America, sent the
company an e-mail message asking for a donation of cyclosporine, an
immunosuppressant, for a patient in Honduras.
A few days later, Ms. Boultbee, the Glivec brand manager, left a message for Max's
founder, Pedro Rivarola, asking him to fly to New Jersey to discuss plans for Glivec.
They met for the first time on April 2. A month later, the Food and Drug Administration
formally approved Glivec. And in July, Dr. Epstein sent a memo to company executives
around the world proudly announcing that Novartis was establishing a drug donation
program aimed at ensuring that "no CML patient will be denied treatment with Glivec for
He described the effort as "the most generous and far-reaching access program ever
developed for a breakthrough cancer therapy," adding that the intent was to help the
company "achieve its therapeutic and business goals" for the drug.
A slide presentation prepared by Novartis a month earlier was more explicit in outlining
the path to meeting the latter objective. "Max Patient Advocacy Work," it said, would be
directed at "payers," "physicians," "patients," "media," "legal pressure" and "community
involvement," all with a single aim: "OK Reimbursement."
With financing of $1 million a year from Novartis, the Max Foundation rented an office,
hired an administrative staff and began building a computer system that could handle the
program, called the Glivec International Patient Assistance Program, or Gipap.
According to Dr. Epstein's memo, Novartis granted the foundation "sole and final
responsibility for approving each single patient's eligibility" for the program.
The assignment was an astounding leap for an organization that reported revenue of just
over $20,000 the year before. The foundation was a mom-and-pop operation, established
to honor the memory of Mr. Rivarola's son Maximiliano, who died in 1991 of the
leukemia that Glivec combats. Ms. Stone, the Novartis spokeswoman, said "they were
one of the only foundations dedicated specifically to helping C.M.L. patients, and
therefore they understood both the scientific aspects of the disease and the desperation of
patients seeking a treatment or cure."
It did not take long, however, for many patients and their advocates and doctors to
question Novartis's choice — and for a program intended to sow good will instead to
By January 2002, objections from around the globe began appearing in online discussion
groups dedicated to C.M.L. Patients complained that eligibility requirements were out of
step with the way doctors were prescribing the drugs. Some patients were getting the
drug and others were not, for reasons not easily discerned.
"A C.M.L. friend of ours in Singapore who had applied for Gipap got 37 percent worth of
Glivec free," Anjana Rai Chaudhuri, a chemist in Singapore whose husband has
leukemia, wrote on a Yahoo bulletin board. "He has to pay for 63 percent himself. There
is no `free' Glivec as we have been led to believe."
In part, the frustrations stemmed from the inconsistency of medical standards from nation
to nation. Novartis requires patients' treatments to match local drug regulators' guidelines
for Glivec. While the United States has approved Glivec as a first-line treatment, many
countries recommend it only after other drugs have failed.
Yet the reports of Glivec's success have led doctors to prescribe it for their patients
anyway. A result is that patients who qualify for assistance on financial grounds — often
because they have bankrupted themselves buying the drug — are rejected because they
have not first taken an older drug, interferon. And "many of them can't afford that either,"
said Robert W. Neill Jr., a North Carolina real estate developer who administers an
Internet list for leukemia patients.
Yet for some patients, the rules are bent. Sourabh Ghosh, an Indian student studying in
Switzerland who is a volunteer for the Max Foundation, said he had been receiving
Glivec since last June, even though he has never taken interferon. Rakesh Nagpal, a 41-
year-old father of twins in New Delhi who makes $4,800 a year, said he was also getting
the drug without having first taken interferon.
Such inconsistencies abound. Fatima Ouassini, a patient in Tangiers, Morocco, waited
seven months for acknowledgment of her application, said her son, Khalid Hmam. Mr.
Hmam, who runs an electronics repair business, e-mailed, faxed and finally called the
foundation. He said that he was told by Patricia Garcia-Gonzalez, who runs the program
and is married to Mr. Rivarola, that there was nothing it could do, because Glivec had not
been approved in Morocco.
But when he sought help from Life Raft, a support group for patients with the tumors his
mother has, he was able to get Glivec directly from Novartis.
Ms. Garcia-Gonzalez said that the foundation had met patients' needs while running the
program on lines dictated by Novartis.
"We have done an outstanding job managing the program, and more than 1,000 patients
are benefiting from it," she said. "I believe we should be judged for what we do and not
for what is still to be done."
Novartis is satisfied with the Glivec program, Dr. Epstein said. "Considering how much
there was to learn when we set it up, it's done remarkably well," he said.
While Novartis alienated some patients with the fitful start of Gipap, another, larger
group became vocal advocates for the company's interests after receiving Glivec free.
Under a special program, these 7,500 patients got Glivec as Novartis undertook clinical
trials, country by country, to win regulatory approvals. But once Glivec is approved, the
company stops supplying it under the special program; patients must then seek Glivec
through private or government insurance and other conventional channels.
But instead of becoming angry at Novartis, patients have protested to governments and
have helped win victories for the company.
In South Korea, for example, the Ministry of Health and Welfare initially set the price of
a Glivec capsule at $15, lower than what Novartis wanted. The company refused to sell
the drug at that price, and as the two sides bickered, patients held demonstrations.
Novartis encouraged them, promising to reimburse patients for a portion of their co-
payments. In January, the government and Novartis agreed to a price of almost $18 a
capsule, a 20 percent increase over the government's original offer.
Under terms of the national health plan, that means patients will pay $243 to $486 a
month for the drug, depending on their dosage, keeping it out of reach for many,
according to Hee Seob Nam, a patent lawyer turned patient advocate in Seoul. When
patients protested the new price outside Novartis's office in February, 13 were arrested
and one protester was injured so badly he had to be taken to the hospital.
In March 2002, as Novartis was having a similar wrangle with Hong Kong authorities
over Glivec's price, it sent a letter to the 53 patients in clinical trials there, telling them
that the trials were ending and their free drugs would be cut off in July 2002, according to
a patient who received the letter.
Another patient in Hong Kong said that Novartis hired the public relations firm Ruder
Finn to help patients get their stories of financial distress into the newspapers. Patients
lobbied through the summer and fall, and in December, the government went along with
When Novartis told 30 patients in New Zealand a year ago that their free Glivec supplies
were about to end, Wayne McNee, the head of Pharmac, the country's drug purchasing
agency, issued a press release branding the move "a marketing exercise to increase
pressure on getting Pharmac to fund the drug."
He has not changed his opinion, though the agency agreed in October to purchase Glivec.
"There was no doubt that by threatening to remove the medicine, it put pressure on the
funding decision," Mr. McNee said in a telephone interview.
Novartis sees no reason to shy from mobilizing patients in such disputes. "Patients play a
key role, and they're going to continue to play a key role," said Dr. Epstein of Novartis
Oncology. "I think it's the wave of the future, and it's a good thing. It helps drug
manufacturers get closer to the people we're doing this work for."
Nowhere has Novartis been more active in giving away Glivec than in India. About 44
percent of the Max Foundation program's beneficiaries live there. But while the
company's generosity is applauded, its motives have been questioned.
Novartis started the program in India with a warning. "They had told us all in the
beginning that they will stop the program if somebody launches a generic version in
India," said Dr. P. P. Bapsy, an oncologist at the Kidwai Memorial Institute of Oncology,
the leading cancer hospital in Bangalore.
To some doctors in India, the warning underscored the pragmatic aims of the company's
philanthropy. The giveaway was a means, they contend, to establish a commercial
beachhead in India's brutally competitive drug business. If Novartis somehow managed
to ward off generic versions of Glivec, India could be a huge market for the drug and a
bellwether for other emerging markets.
After all, India's middle class is growing, and private insurers like Cigna and others have
begun selling insurance more widely there, hoping ultimately to cover 100 million to 300
million Indians, according to a report by McKinsey & Company. Moreover, starting in
2005, global trading rules will require India to honor drug company patents. So brand-
name drug manufacturers like Novartis have hopes of wresting away a bigger share of the
Indian market, where 76 percent of sales are controlled by local companies.
A Key Market
Generic Competitor Starts Sales in India
The market for Glivec certainly seemed promising. Profits at Novartis's Indian unit in the
quarter ended Sept. 30 were 48 percent higher than a year earlier, thanks in large part, the
company said, to Glivec sales.
But those results are unlikely to be replicated. On Jan. 26, Natco Pharmaceutical, a
generic drug maker based in Hyderabad, began selling generic Glivec under the name
Veenat. A month's supply costs $377, versus $2,769 for Glivec.
Mente Subba Rao, a Natco spokesman, said that the months-long process of winning
government approval for Veenat, while swift by American standards, seemed unusually
long and tedious. "We are guessing that Novartis attempted to pressure the drug
controller," he said, referring to India's top drug regulator.
That suspicion was echoed in an interview with Dr. Yusuf K. Hamied, the chairman of a
Natco competitor, Cipla, which is planning its own generic version of Glivec.
Asked if generic licenses had been delayed because of pressure from Novartis, Ashwini
Kumar, the drug controller of India, said, "No comment." In response to the same
question, Ms. Stone said in an e-mail message that Novartis had provided information on
the manufacture of Glivec to the drug controller's office.
With Veenat's approval, Novartis made good on its threat, announcing that as of May 1 it
would accept no more applications for the Glivec giveaway program in India. Since a
generic version is available, the company said on its Web site, generic manufacturers
should "shoulder some of the responsibility" of supplying the drug. It also chided the
Indian government for failing to respect international patents.
"Within Novartis's capabilities," the company said, patients in the Max Foundation
program will continue to get the drug.
Novartis offered to turn over its donation program's apparatus to Indian manufacturers,
but Natco, at least, did not wait for the offer to try its hand at mixing commerce and
charity. With an eye on rivals like Cipla, it already had established a giveaway program
for Veenat in conjunction with the Cancer Patients Aid Association, which had sought the
same role in Novartis's program.
Ms. Garcia-Gonzalez, meanwhile, has asked Natco to take over the Max Foundation
program in India.
Chowdary V. Nannapaneni, Natco's chairman, said the company had agreed in principle
to give three-month supplies of Veenat to 200 patients screened by the foundation.
Natco, Mr. Nannapaneni said, does not want poor patients to suffer on its account. "We
are not as big as Novartis," he said, "but we are eager to help needy Indian patients in the
best way we can."
June 5, 2003
Questions on Choice of Foundation for Drug Program
By STEPHANIE STROM and MATT FLEISCHER-BLACK
Novartis says that its choice of the Max Foundation to run its ambitious program to give
away Glivec was largely a result of the foundation's success establishing a bone marrow
registry for leukemia patients.
But while the registry is promoted on the foundation's Web site and in other documents,
it has never come into existence, and, indeed, has become a focus of bitter criticism in
"There was never any registry," said Leeora Freifeldt, an Israeli patient advocate who
worked with the foundation on the project until she had a dispute with its founder, Pedro
After he was unable to find a marrow donor to save his son Max's life as the boy was
dying of leukemia in 1991, Mr. Rivarola set out to establish a bone marrow registry
comprising donors with the complex blood mix typical to Latin Americans.
In 2000, Mr. Rivarola set out to broker a partnership of the foundation, two Brazilian
organizations and the world's largest registry, Deutsche Knochenmarkspenderdatei of
Germany, known as DKMS. The goal was to create a Brazilian bone marrow registry.
But DKMS quickly concluded that it was not interested in a partnership that included the
Max Foundation, said Claudia Rutt, its executive director. "The Max Foundation didn't
have any experience, any computers, anything, and we were uncertain about their
finances," she said. "I never got any answers."
Mr. Rivarola persuaded the Brazilians to go ahead without DKMS, and the project
collected samples from 1,061 donors during a first drive. But the partners had a falling-
out. Now, no one has access to the donors. The foundation holds the lab work, a blood
center in São Paulo holds the donors' identities, and neither will share its information.
In Peru, Dr. Victor Ulloa, an oncologist at a Lima medical school, said that he had tried
for a year to start a Peruvian registry with Mr. Rivarola. But Mr. Rivarola, he said, had
not answered e-mail or phone messages and had failed to show up at meetings.
"His attitude doesn't appear to be very serious to me," Dr. Ulloa said.
Last month, Ms. Freifeldt sent an e-mail message to Dr. Marcelo Fernandez-Vina, a
prominent oncologist at Georgetown University, alerting him that his name was listed on
the Max Foundation's Web site, www.themaxfoundation.org, as a member of its scientific
"I never received and signed a document for my affiliation," Dr. Fernandez-Vina
responded. On his demand, his name was removed from the Web site.
Requests to speak to Mr. Rivarola went unanswered. His wife, Patricia Garcia-Gonzalez,
said the foundation was still interested in the Peruvian registry, but that the Glivec
program, which she runs, had forced it to put the discussions on hold.
Of the foundation's registry efforts in general, she said, "Unfortunately, it has not been as
successful as we would have liked."