PER 2015
about the brand drug Glivec from Novartis. As quoted ‘In 2006, India’s patent office refused to give Novartis AG a patent for Glivec, an extremely effective drug for a rare cancer. The patent office argued that the drug’s active ingredient was already known before the development of Glivec, and that it wasn’t significantly more effective than the earlier version. The Swiss drug maker appealed the decision to the Indian Supreme Court, which in 2013 rejected the company’s argument that Indian patent law defined innovation too narrowly.’ With another example quoted ‘In 2012, India’s Intellectual Property Appellate Board revoked a Roche Holding AG patent for a hepatitis C drug saying technology involved in the drug’s invention was “obvious” and could be replicated easily.’ 7 These two examples show that the generic drug industry are still in a relative stable positon and so it will be an argument for them to use a low business prospect as a reason to charge a high price for their generic drugs with a low production cost.
Furthermore, the cost of raw materials have increased in recent years but it will be interesting to see the rate of increase in the cost comparing to the rate of increase the general price level of the consumer goods.
The above diagram shows the statistical figures from the UK which have given a strong evidence that the Pharmaceutical Producer Index (PPI) is lag behind the increase in the Retail Price Index (RPI) staring from 2010 to 2014. This suggests that the inflation which cause the persistent increase in price level had brought only a little effect to the pharmaceutical producers. The drugs producers should have not much pressure on the increasing price of raw materials for producing the drugs so it
7 ibid
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