The free market is a myth. From drug patents to quantitative easing, businesses make money because of state help
Earlier this week, India’s supreme court ruled that the country will not grant a patent to Novartis, the Swiss pharmaceutical company, for the cancer drug, Glivec. Being a new version of an existing drug, the ruling said, it does not deliver enough innovation to warrant a patent. Novartis condemned the ruling as “a setback for patients that will hinder medical progress for diseases without effective treatment options”.
This statement is rich coming from a company from Switzerland – a country that infamously had no patent law until 1888, half a century after its introduction in most rich capitalist countries.
Even after 1888, Switzerland refused to award pharmaceutical and other chemical patents for two decades, the new patent law having stipulated that patents are granted only to “inventions that can be represented by mechanical models”. The country introduced chemical patents only in 1907 under intense pressure from Germany, whose technologies its pharmaceutical companies were liberally “borrowing”. Ciba-Geigy and Sandoz, whose merger in 1996 created Novartis, were among those companies.
What is more, until 1978, Switzerland granted patents only for chemical process (that is, how you make a chemical) and not for chemical substance (that is, the chemical itself), on the reasonable ground that the substance had always existed in nature and the “inventor” has only found a way of isolating it. This was actually a rather widely accepted view at the time. Germany and France had only just introduced chemical substance patents in the late 1960s. Canada and Spain refused to grant patents to pharmaceutical substances until 1992.
Despite all this history, the pharmaceutical industry is extremely aggressive with substance patents, as in the case of Glivec, because it knows that its