Thatcher, Chandraswami and I

 

K. NATWAR SINGH 

How a future Prime Minister of Britain warmed to the godman with an Indian diplomat playing the reluctant translator

 

India House is among the better known diplomatic establishments in London. I first set eyes on the imposing building in 1952, when I was a student at Cambridge University. Thirty years later I entered India House as Deputy High Commissioner. One of my less attractive duties was to meet the unreasonable demands of visitors from India. Not all were disagreeable but many were.

Early in the summer of 1975, Mr. Chandraswamy telephones me. He was in London. The late Yashpal Kapoor had asked him to contact me, Chandraswamy invited me to meet me at his place. I said if he wished to see me, he should come to India House. This he did the next day. At the time he was in his late twenties. He was in his “Sadhu” attire. He did not speak a word of English. Now he does.

At this, our first meeting, he dropped names. After a few days he again come to see me. He invited my wife and me to have dinner with him.

The food was delicious. After dinner he said to us, “I will show you something you have never seen”. He then produced a large sheet of white paper and drew lines from top to bottom and left to right. Next he produced three strips of paper asked my wife to write a question on each strip, make a ball and place each one on a square on the chess board. My wife wrote the questions in English. He closed his eyes and went into a trance. I was, by this time getting restless. Suddenly he asked my wife to pick up any of the paper balls. She did so. Opened it. Chandraswamy then told her what the question was. He was spot on. My wife, who is an amateur astrologer, was sceptical at this stage. When Chandraswamy got the next two questions right, she was amazed and interested. I was intrigued. I could not, as a rationalist, accept mumbo-jumbo. Neither could I dismiss Chandraswamy as a complete hoax.

A few days later Y.B. Chavan, the then External Affairs Minister was on his way to the United States. I went to meet him at London’s Heathrow airport. He confirmed he knew Chandraswamy well. I also told Chavan that Chandraswamy had asked me to arrange a meeting with Lord Mountbatten and also with Mrs Thatcher. Should I arrange these meetings? To my discomfiture and surprise, Chavan sahib saw no harm in Chandraswamy meeting Lord Mountbatten or Mrs Thatcher.

I rang up Lord Mountbatten. He said he would have been glad to meet “your friend”, but he was leaving for a holiday in Northern Ireland the next day. I was quite relieved. I informed Chandraswamy. What about Mrs Thatcher?

She had been elected leader of the Conservative Party six months earlier. Doubts still assailed me about Chandraswamy meeting Margaret Thatcher, not yet the iron lady. Suppose Chandraswamy made an ass of himself. I would look a bigger ass. I sought an appointment with the Leader of the Opposition. She promptly obliged. I met her in her tiny office in the House of Commons.

Her response was, “If you think I should meet him, I shall. What does he want to see me for?” “That he will tell you himself,” I said. She agreed to see him in her House of Commons office early the next week. “Only ten minutes, Deputy High Commissioner,” she announced. I thanked her and left.

Chandraswamy was on cloud nine when I gave him the news. I cautioned him not to do or say something silly. I was putting my neck on the line for him. “Chinta mut kareay, (don’t worry”) said the sage. So, to the House of Commons the two of us proceeded. Chandraswamy was dressed in his “sadhu” kit, with a huge tilak on his forehead and a staff in his right hand. Rudraksha malas round his neck. He banged the staff on the road till I told him to stop doing so. I confess, I was feeling self conscious. Not Chandraswamy. He relished the attention he was inviting. Finally we reached Mrs Thatcher’s office. With her was her Parliamentary Private Secretary, Adam Butler, M.P. son of Rab Butler, the Conservative leader.

Introductions over, Mrs Thatcher asked, “What did you want to see me for?” Chandraswamy spoke in Hindi. I translated. “Tell her she will soon find out.” His tone was arrogantly respectful. Mrs Thatcher — “I am waiting.” The clock was ticking away. Chandraswamy was in no hurry. He asked for a large piece of paper. Went through the same routine as with my wife. He gave Mrs. Thatcher five strips of paper and requested her to write a question on each. She obliged, but with scarcely camouflaged irritation. Chandraswamy asked her to open the first paper ball. She did. He gave the text of the question in Hindi. I translated. Correct. I watched Mrs Thatcher. The irritation gave way to curiosity. Next question. Again bull’s eye. Curiosity replaced by interest. By the fourth question the future iron lady’s demeanour changed. She began to look at Chandraswamy not as a fraud, but as a holy man indeed. My body language too altered. Last question. No problem. I heaved a sigh of relief. Mrs Thatcher was now perched on the edge of the sofa. Like Oliver Twist, she asked for more. Chandraswamy was like a triumphant Guru. He took off his chappals and sat on the sofa in the lotus pose. I was appalled. Mrs Thatcher seemed to approve. She asked supplementary questions. In each case Chandraswamy’s response almost overwhelmed the future Prime Minister. She was on the verge of another supplementary, when Chandraswamy regally announced that the sun had set. No more questions. Mrs Thatcher was not put out. She enquired if she could meet him again. I was entirely unprepared for this. Very coolly, almost condescendingly he said, “On Tuesday at 2.30 p.m. at the house of Shri Natwar Singh.” I told him that he was over reaching himself by dictating the day and time without taking into account her convenience. This was not India. He was unmoved “Kunwar sahib, Anuvad kar dijiye aur phir dekhiye.” Please translate and then see. I was astounded when she asked me, “Deputy High Commissioner, where do you live?” This was not all. What followed was something out of a weird novel. Just as we were about to leave, Mr. Holy Man produced a talisman tied to a not so tidy piece of string. He then pronounced that Mrs Thatcher should tie it on her left arm when she came to my house on Tuesday. I was now on the verge of losing my temper. I said I would not translate this dehati rubbish. Mrs Thatcher intervened to know what the holy man was saying. “Mrs Thatcher, please forgive me, but Chandraswamy would like you to wear this talisman on your left arm.” She took the talisman. We were saying our goodbyes, when Chandraswamy produced his sartorial bomb. Turning to me he said “Kunwar Sahib, kindly tell Mrs Thatcher that on Tuesday she should wear a red poshak. I felt like hitting him. He was overdoing this. I firmly told him it was the height of bad manners to tell a lady what she should or should not wear. Mrs Thatcher looked a bit apprehensive at this not so mild altercation between a distraught Deputy High Commissioner and a somewhat ill-mannered holy man. Very reluctantly I said to her that the holy man would be obliged if she wore a red dress on Tuesday. I was looking down at the floor as I said this.

On Tuesday, at 2.30, Mrs Margaret Thatcher, leader of the Conservative Party, arrived at Sun House, Frognal Way, Hampstead. It was a beautiful day. She was wearing a stunning red dress. The talisman too was in its proper place.

She asked many questions but the most important related to the chances of her becoming Prime Minister. My wife was also present. Chandraswamy did not disappoint Mrs Thatcher. He prophesied that she would be Prime Minister for nine, eleven or thirteen years. Mrs Thatcher, no doubt believed that she would be Prime Minister one day. Nine, eleven, thirteen years was a bit much. Mrs Thatcher put one final question. When would she become a Prime Minister? Chandraswamy announced — in three or four years. He was proved right. She was PM for eleven years.

This narrative should have ended here. But there was an aftermath. The Commonwealth Summit was held in Lusaka, Zambia in 1979. Mrs Margaret Thatcher had by then become Prime Minister. I had been posted to Zambia in August 1977. Along with other High Commissioners I went to Lusaka airport to receive Mrs Thatcher. When she greeted me and my wife, I gently whispered “Our man proved right.” For a moment she looked flustered. She took me aside, “High Commissioner, we don’t talk about these matters.” “Of course not, prime minister, of course not,” said I.

(Extracted from K. Natwar Singh’s new book “Walking with Lions — Tales from a Diplomatic Past,”HarperCollins)

Patent justice

SAKTHIVEL SELVARAJ  

The HinduThe Supreme Court’s patent denial to Novartis for its anti-cancer drug Gleevec leaves the door open for Indian pharmaceutical companies to produce their own versions of the drug.

Drug patents are designed to create profits that enable more research on diseases affecting millions. But in practice, they have often generated super profits for big pharma companies while erecting access barriers for the poor. The Novartis case spotlights much that is wrong with the system.

The rejection of the Novartis petition challenging one of the most progressive tenets of the Indian Patents Act (1970), as amended in 2005 by the Supreme Court, is a landmark verdict for the public health community and the generic drugs industry, in particular, and for global health. Under the amended Indian Patents Act, Section 3(d) allows drug companies to obtain product patents for new salts or chemical ingredients. This is intended to encourage drug companies to protect their rights and prevent these from being copied by competitors, allowing for a 20-year protection period to recoup investments. However, Section 3 (d) does not encourage frivolous patents. It is intended to encourage only breakthrough innovations and discourage new use of known chemical substances or new delivery mechanisms of existing chemical compounds.

Transnational drug companies not only possess the first mover advantage, but owing to the high-voltage brand image they create, often extend their patents well beyond the already long period of protection. Drug companies are known for ‘evergreening’ patents by filing new patents, tweaking existing molecules to show novelty. Innovation is a red-herring, often used by multinational drug companies to make super-profits at the expense of social good and well-being. Under the mailbox agreement of Trade-Related Aspects of Intellectual Property Rights (TRIPS) provisions, India received over 9,000 mailbox applications as patent filings post-2000, while a major share of those were for pharmaceutical patents. Global evidence, on the other hand, shows that roughly 275 such patents were filed and granted for blockbuster drugs during this period. In order to pre-empt Indian generics companies from producing these drugs and to keep them away from the market, the big pharma companies have flooded the patent offices with frivolous patent applications, known to be existing molecules tweaked to appear as a novel product.

The R&D myth

The night before the apex court verdict, Novartis threatened to stop investing in research and development in India, if the verdict went against it. How serious is the threat and how realistic the scenario? In India’s drug production of over Rs. 100,000 crore, Novartis’ turnover is a little over Rs. 1,000 crore, constituting around one per cent. Out of the total expenditure of over Rs. 800 crores incurred by Novartis India in 2012, a paltry Rs. 29 lakhs was for R&D, constituting roughly 0.03 per cent of its entire expenditure in India.

Can such low spending can be considered R&D investment? In fact, Novartis R&D expenditure in India for the past five years has been in a similar range. On the other hand, Novartis consistently posted a profitability ratio (Profit After Tax as percentage of Total Income) of over 15 per cent in the last five years, something to envy for other sectors.

Big Pharma argues that if global R&D of innovator companies were to be considered, transnational drug corporations spend over US $ one billion to come up with a new drug. This includes cost of R&D incurred on failed drugs as well, as pharmaceutical companies take, on an average, roughly 12-13 years to get patents on new drugs. The magic one billion dollar figure is a gross overestimate. Even by conservative calculations, this figure would be one-fifth or one-fourth of the billion dollar estimate. But Big Pharma is quick to recoup its R&D spending from blockbuster drugs. Take the case of Gleevec (Imatinib Mesylate), sold in the US. Novartis raked in a total turnover of US $ 1.69 billion from the US alone in 2012 from the drug. The global turnover on Gleevec is anybody’s guess. It is also widely known that the cost of manufacturing drugs is only a fraction of the turnover.

Novartis currently sells Glivec (Gleevec) for Rs. 4,115 per tablet, while Resonance, an Indian generic drug company dispenses it at Rs. 30 per tablet. The annual cost of treatment per patient on Glivec would be in the range of Rs. 15 lakhs while Indian generic companies are offering it at Rs. 10,000. If Novartis were to get its patent on Glivec, Indian generic companies would have to stop their production, and therefore an unaffordable scenario would have prevailed for the common man in not only India but in other developing countries. Thankfully, the court ruled in favour of Section 3 (d) of the Patent Act.

Novartis claims that 95 per cent of cancer patients in India were provided the medicine free. This is patent untruth. Retail market sales in India for Glivec, sold by Indian generics producers are currently worth Rs. 20 crores. Novartis sells Glivec directly to patients and not through the usual retail chain, a system that is designed to make people believe that they offer the drug free.

After seven years of battle, the Supreme Court verdict seals this issue, facilitating Patent Controllers to strictly enforce Section 3 (d), thereby pre-empting pharmaceutical companies that seek to evergreen products. However, there are several other safeguards that are enshrined in the patent law that must be utilised to make life-saving and essential drugs affordable. And one such key safeguard is invoking compulsory licensing for blockbuster drugs, if the original manufacturer fails to sell it affordable rates.

Last year, India invoked the provision to license generic player Natco to produce Nexavar, after Bayer, the innovator failed to make it affordable. Such policy measures are critical, in order to improve access to life-saving medicines, as households in India are known to pay nearly 70 per cent of their health care spending on medicines.

(Dr. Sakthivel Selvaraj is Senior Health Economist, Public Health Foundation of India, New Delhi.)

Also read

Company profits depend on the 'welfare payments' they get from society

Novartis loses landmark patent case in India

Why Novartis case will help innovation

 

ACHAL PRABHALA

SUDHIR KRISHNASWAMY 

  PRINT   ·   T+  

TOPICS

company information

patent, copyright and trademark

crime, law and justice

judiciary (system of justice)

disease

cancer

health

generic drugs

medicine

The Supreme Court judgment on Glivec is a blow for a patent regime with a higher threshold of inventiveness

On April 1, 2013, the Supreme Court upheld the Intellectual Property Appellate Board’s decision to deny patent protection to Novartis’s application covering a beta crystalline form of imatinib —the medicine Novartis brands as Glivec, and which is very effective against the form of cancer known as chronic myeloid leukaemia (CML). The judgment marked a crucial conclusion to a saga that has been several decades in the making. The story could start in 1972, if you like, when the Indian Patents Act of 1970 — grounded in the findings of the Bakshi Tek Chand and Ayyangar Committee Reports — came into force, enabling the explosive growth of the Indian generics industry into the world’s largest exporter of bulk medicines. Or, it could start in 2005, when India amended its patent law to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), a trade rule at the World Trade Organisation (WTO) that established a new global regime of intellectual property.

Key lesson

No matter where we start, the saga has come to a close, and the key lesson seeping through is that good sense won. Firstly, the Supreme Court decision was not about the patentability of the imatinib compound as such: that patent, having been instituted in 1993, is excluded from the purview of the Indian patent system, which is only obligated to consider patents filed in 1995 or after. The case the Supreme Court heard was whether Novartis’ beta crystalline form of imatinib was worthy of patent protection: its judgment was that this modification by Novartis did not satisfy the standard of inventiveness required under Indian patent law. Secondly, Indian patent law is as yet unchallenged at the WTO; Novartis’s earlier challenge to the constitutionality and TRIPs compatibility of Indian patent law was rebuffed by the Madras High Court in 2007 and no appeal was pursued. Thirdly, the Supreme Court judgment effectively recast Indian patent law as being nuanced and original in its meshing of domestic political economy concerns with the integrated global economy it participates in.

The outcome of this nuance and originality? Imatinib will continue to be 

available to patients in India from multiple suppliers at a price 10 times less than the current cost of Glivec; approximately 27,000 cancer patients in the country who pay for their imatinib will continue to have access to the medicine in the public and private sectors at the lowest cost possible; and should Novartis ever suspend its charitable programme, all 15,000 of the cancer patients who currently receive imatinib free from Novartis will have similarly equitable access to the medicine.

Hackneyed narrative

Despite substantial progress in the popular understanding of the place of patents in a developing country like India, a hackneyed narrative has emerged, especially in the pink press, warning us that this judgment will have a negative impact on innovation in the long run. As it happens, one of the most useful outcomes of the Supreme Court judgment is a renewed focus on what innovation is — and how it should be rewarded. Behind the headlines foretelling various levels of doom — the death of innovation in the country and the end of research for diseases which matter to us — is the popular idea that patents are a proxy for innovation. After all, patents are widely understood as short-term monopolies enshrined in the law and provided as incentive to inventors on the evaluation of publicly disclosed innovation. It would seem as if patents are synonymous with innovation. Except, this is not quite the case.

Minor variations

In the last three decades, the global gold rush for patents has been dominated by filings for minor and mostly inconsequential innovations — at the expense of breakthrough innovation. In large part, this is because weak standards in the patent laws of developed countries (led by the U.S. and Europe) have explicitly encouraged this shift. The whittled-down, lobbied-out, stretched-beyond-recognition patent regime that is characteristic of these countries — and other less-developed countries where they influence the polity — is unfortunately the ‘norm’ to which India now finds itself an ‘outlier.’ But the outlier is a solution: the norm is the problem. A British Medical Journal report from 2012 succinctly summarises the global research situation for new medicines: “This is the real innovation crisis: pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures.”

If the patent regimes of developed countries are dominated by minor patents, many or most of which have no demonstrable innovation to show, why are they so avidly pursued by global pharmaceutical companies? A Public Library of Science study from 2012 points to the answer: secondary patents extend the patent life (and thereby, the monopoly pricing) of pharmaceutical products long beyond their designated life span, adding, on average, between six and seven years to the patent life of the original compound. Any patent regime which incentivises secondary patents with weak laws will only serve to extend commercial monopolies at low levels of innovation — and will no longer provide the incentive for genuine innovation. The genius of the Supreme Court judgment on Novartis’s patent application lies in restoring the connection between patents and innovation by upholding and legitimising a regime with a higher threshold of inventiveness.

Will Indian patent law change the way the global pharmaceutical industry innovates? No; not immediately, at least. Could it positively affect pharmaceutical innovation in the long run? Absolutely. In the present day, India comprises 1.3 per cent of the global pharmaceutical market by value. That figure, in itself, is why changes to Indian patent law will not help global pharmaceutical giants break free from the incentive model they are prisoners of. At most, they might have to learn how to compete in a crowded market for some of their less original products. The symbolic opportunity presented by the Supreme Court’s backing of Indian patent law, however, is a real threat — and pharma CEOs in New York, London and Basel get it. In the long run, as more countries understand the Indian model, appreciate its legitimacy, and reflect on its benefits to both public health and innovation, they might want the same. And if that happens, when that happens, we may begin to see real, positive change in the way pharmaceutical innovation works.

Empowered scenario

The Indian Patents Act of 1970 was a game changer. From the perspective of 43 years of experience, we can safely say that it shook up the pharmaceutical industry and altered it irreversibly. The new, empowered scenario was most vividly illustrated during the peak of the HIV/AIDS treatment crisis in the first decade of the 21st century, when countries like Brazil, Thailand, South Africa and, of course, India, took health security into their own hands and legitimately moulded their domestic patent systems to respond to the crises within. The Indian Patents Amendment Act of 2005, which gave us the law we have today — a law which was ratified last week — has the potential to change the game once again. This time, however, the change might come more slowly; the hell the Indian government was dragged through has not been lost on anyone. The lengthy trials, the frequent challenges, the full-scale vilification, and every other scare tactic thrown our way by a public-relations juggernaut (along with the implicit support of many developed country governments) was not for nothing. And the Supreme Court judgment is all the more important as a result, for it shows a new way may be hard and tiresome, but is ultimately possible.

(Achal Prabhala works on access to medicines; Sudhir Krishnaswamy is on the faculty of Azim Premji University, and is the Dr. B.R. Ambedkar Visiting Professor of Indian Constitutional Law at Columbia Law School)

The nation at the heart of the offshore tax haven scandal is Britain

Britain's relationship with its overseas territories means it could – if it wanted – easily tackle offshore global secrecy

• 
• • James Ball
  • guardian.co.uk, Friday 5 April 2013 18.00 BST

'The British Virgin Islands are perhaps rivalled only by Switzerland as a global capital for the offshore industry'. Photograph: James Marshall/Corbis

It's a tumultuous time for the offshore industry. For decades, there's been an uneasy equilibrium: opprobrium from campaigners, torpor from regulators, apathy from the wider public, and delight for the wealthy benefiting from the arrangements to cut their tax bill or avoid regulatory scrutiny.

Recently, though, the rhetoric and action have changed. In tougher economic times – for which the financial sector has copped a huge amount of the blame – the public is more aggrieved by tax avoidance arrangements than ever, while recent proposed offshore crackdowns have been cautiously welcomed by campaigners as having the potential to actually be effective.

The leaking of more than 2m offshore files to the International Consortium of Investigative Journalists, and through them to the Guardian for our Offshore Secrets stories is just the latest in a series of unwelcome developments.

Amid this backdrop, and with ministers from George Osborne to Vince Cable willing to speak out strongly against offshoring and tax avoidance, it's easy to imagine the villains of the piece to be irresponsible foreign nations – happy to shelter the mega-rich in offshore secrecy, unconcerned about the tax avoided in other, larger countries.

If only the British government can prevail in these overseas battles, things will get better, it seems.
But such a stance ignores that one nation in particular has ties to offshore havens everywhere. It's a veritable nexus of offshore influence, related to havens in the Caribbean, and much closer to home. That nation is, of course, the United Kingdom.

The clue is quite often in the name. The British Virgin Islands are perhaps rivalled only by Switzerland as a global capital for the offshore industry, with more than 1m offshore companies registered on the Caribbean island (population 31,900). Plaques for registration agents, solicitors and more line almost every wall of the islands' tiny capital.

The islands are a British Overseas Territory: legally under the jurisdiction of the UK (and with a British governor), but in practice self-governed. Other havens with this UK imprimatur include the Cayman islands, Gibraltar, and the Turks and Caicos Islands.

Closer to home, the UK wields even more control over the crown dependencies: Jersey, Guernsey and the Isle of Man, whose role in legal tax avoidance techniques has been documented time and again for decades.
Even within the UK itself, little is done against tricks of the offshore trade that have been known for decades.

In 1999, Sark islander Philip Croshaw was struck off as a UK director for acting as a "nominee" – a sham director who hides a company's real controllers – for thousands of companies in the UK.

At the time, then-trade minister Kim Howells said: "The government today struck a fatal blow against the practice of so-called 'nominee directorships' … The trade in providing 'nominee director' services from the island of Sark has been a scandal … The courts have now effectively outlawed this abuse."

And yet today – 14 years later – more than 175,000 UK companies have had directors based in offshore havens, and the Guardian has identified 28 sham directors with tens of thousands of companies between them.

In short, a huge string of the world's foremost offshore havens have, at minimum, a strong and long-lasting symbolic relationship with the UK, and in practice are susceptible to significant influence and pressure from the UK government.

Even at home, offshore practices known and deplored by governments for more than a decade are still going strong. The temptation for campaigners and government alike is to look overseas for the villains in the offshore trade. The reality is more complex, and the trouble closer to home. The upside of this is it means that if Britain really wants to tackle global offshore secrecy, there's a lot it can do.

But so far, everywhere – on its home turf, in its dependencies, and in its overseas territories – the UK brand is on both sides of the fight. For Britain, the battle against offshore tax havens – if it wants to fight it – begins at home.

US universities offer software which they claim can instantly grade students' essays and short written answers

From The Independent 6/4/2013

Students could soon find their essays being instantly graded by a computer - rather than waiting weeks for a professor’s ponderous comments.

New software developed in the United States which means they receive an instant grade through their computer if they send it online will be available for UK universities to use.

The software programme has been developed by EdX, a non-profit making enterprise set up by Harvard and Massachusetts Institute of Technology, and will be available free on the web to any organisation that wants to use it.

It uses artificial intelligence to grade students' essays and short written answers - freeing professors to carry out other work.

So far its use has been confined to the US - where a row is raging over whether it is right to use it to measure students’ essays which, in some subjects, include a fair amount of opinion around the factual content.  Many academics believe it cannot replace the words of wisdom of a professional lecturer.

However, Anant Agarwal, president of EdX, predicted it would be a useful pedagogic tool - allowing students to redo essays over and over again thus improving the quality of their answers.

“There is huge value in learning with instant feedback,” he said.  “Students are telling us they learn much better with instant feedback.”

He added: “We found that the quality of the grading is similar to the variation you find from instructor to instructor.”

An online petition against the practice, launched by a group calling itself Professionals Against Machine Scoring of Student Essays in High-Stakes Assessment, has amassed almost 2,000 signatures - including that of Noam Chomsky - protesting at the idea.

The group’s petition says: “Let’s face the realities of automatic essay scoring. Computers cannot ‘read’. They cannot measure the essentials of communication; accuracy, reasoning, adequacy of evidence, good sense, ethical stance, convincing argument, meaningful organisation, clarity and veracity, among others.”

On the other hand, students said that - if it was available for the individual to use - it could become a handy tool for a student to test the water on their essay before submitting to a professor for grading.

Company profits depend on the 'welfare payments' they get from society

The free market is a myth. From drug patents to quantitative easing, businesses make money because of state help

• 
• • Ha-Joon Chang
  • The Guardian, Friday 5 April 2013

Swiss drugmaker Novartis's headquarters in Basel. ‘Switzerland infamously had no patent law until 1888, half a century after its introduction in most of rich capitalist countries.’ Photograph: Christian Hartmann/Reuters

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 profit level will fall dramatically without them. Unlike a BMW or an Airbus, chemical substances are very easy to copy. Even if the processes of manufacturing them are patented, you can relatively easily come up with alternative processes. Without the artificial monopoly conferred by the patent, the inventor of a chemical substance can make only little money (generic drugs typically cost 5% of drugs with patent monopoly).

Patent monopoly creates a lot of problems. It allows the patentee to charge the maximum to consumers. This may not be a problem if the patented product is a luxury item, like parts that go into a smartphone, but can violate basic human rights if it involves things such as life-saving drugs. Patent monopoly also blocks technological progress in the relevant fields during its duration (20 years), as other people cannot use the patented technologies in developing other technologies.

Despite all these problems, we, as society, grant patent monopoly because we believe that it brings more than compensating benefits. By giving greater incentives to invest in developing new technologies, patent monopoly can create more innovative technologies. This means that society has the right not to grant a patent for a technology when it feels that the benefits are outweighed by the costs, as in the Indian court ruling against Novartis.

The pharmaceutical industry most starkly reveals how profits are "social" creations – it makes its profit because it is granted artificial monopolies in the form of patents. But it is not alone in this respect.

Another obvious case is the banking industry. Today, many banks all over the world would not have existed but for the huge public money poured into them in the aftermath of the 2008 crisis. Even in the case of those that have not been bailed out, their profits would have been much lower (or their losses far bigger, in the case of loss-making ones) without the cheap money showered on them – without any condition, unlike in the case of state supports such as unemployment benefit – through cuts in interest rates and thequantitative easing by the Bank of England.

In other instances, the social protection of business is more roundabout. The horsemeat scandal has revealed that British supermarkets and the European meat industry have made higher profits from the relaxation of regulations regarding food standards, introduced by the coalition government in 2010 in the name of cutting government spending and, more important, "red tape". The Poundland scandal has revealed that British retail stores would make lower profits if they were not allowed to use the claimants of unemployment benefits as unpaid workers.

I can go on, but the point is that all businesses make what profits they make only because the government, and the electorate as the ultimate sovereign (at least in theory), helps them in all sorts of ways – free money (banks), free workers (Poundland), monopoly rights (pharmaceutical companies), implicit permission for substandard products (supermarkets).

Once we accept that the amounts of profit companies make are ultimately determined by these "welfare payments" society decides to confer upon them, we begin to see the problem with the free-market view that has dominated the world for the last few decades.

For far too long we have been told by the business lobby and free-market ideologues that profit is the objective indicator of a company's contribution to the economy, when it is really socially and politically determined. Poor people receiving government benefits have been told far too often that they are spongers, when the rich get even more government benefits.

It is time that we dispensed with the myth that the market is a force of nature that should not be meddled with. Markets are social creations that can be, and have been, modified for social purposes.

---------

West should learn from India’s high patent standards

SA Aiyar
07 April 2013, 06:03 AM IST

 

 

 

The Supreme Court’s denial of a patent for Glivec, an anti-leukaemia drug made by Novartis of Switzerland, has been widely but wrongly hailed by NGOs and castigated by pharmaceutical companies as an attack on patents and a victory for cheap medicine. Actually, the Court fully upheld the principle of patents, but set a high bar for deciding what’s innovative and what’s mere tweaking. 

Instead of attacking the verdict, Western countries should raise their standards too. Their overliberal grant of patents has led to the tiniest design changes becoming patentable. This was exemplified by last year’s ridiculous battle between Samsung and Apple on whether features like a rounded rectangular cellphone screen and finger movements were patentable. Smartphones are a great invention, but hardly justify the grant of as many as 25,000 patents, many for piffling details. 

Till 1995, India refused to patent drug molecules. But as a consequence of WTO membership, India in 2005 allowed product patents for drugs, but only for innovations after 1995. This meant no patent for Glivec, which was patented first in 1993. To get around this, in 2006 Novartis tried to patent a new variation of Glivec, for which it claimed improved efficacy. Some other countries granted patents for this variation. But the Indian Patents Office rejected the claim as insufficiently innovative. So too has the Supreme Court. 

Many NGOs hailed the judgment for the wrong reason. The Cancer Patients Aid Association, which led the fight against Glivec, declared: “We are happy that the apex court has recognised the right of patients to access affordable medicines over profits for big pharmaceutical companies through patents.” 

False: no such right was recognized by the court. It simply said Novartis had not proved that the new variation was innovative enough. The court clarified that it would grant patents for variations that were more efficacious, but set a higher standard for proof than many western courts do. 

NGOs are wrong to paint Novartis as a bloodsucker that pauperizes patients. Glivec has saved lakhs of leukaemia patients from death. This is a great boon, and we must encourage more such life-saving boons by granting patents for new drugs. However, this does not mean giving patents for mere tweaking and “evergreening” of existing drugs through minor variations. 

Normally, governments promote competition and prohibit monopolies. But temporary monopolies (patents) are justified to promote innovation in drugs and other fields. The patent regime should ensure that the public benefit from innovation far exceeds the cost imposed by monopoly profits. This implies a high bar for granting patents. But the US and other western countries have been giving patents so liberally and broadly that these lead more to lawsuits than innovation, leaving lawyers as the chief beneficiaries . Patents are supposed to spur innovation, but when granted over-liberally they create so much lawsuit risk and cost that they end up hampering innovation, not aiding it. 

The Economist (UK), no basher of multinationals, acknowledges that over-liberal “proliferation of patents harms the public in three ways. First, it means that technology companies will compete more at the courtroom than in the marketplace. Second, it hampers follow-on improvements by firms that implement an existing technology but build upon it as well. Third, it fuels many of the American patent system’s broader problems, such as patent trolls (speculative lawsuits by patentholders who have no intention of actually making anything); defensive patenting (acquiring patents mainly to pre-empt the risk of litigation, which raises business costs); and “innovation gridlock” (the difficulty of combining multiple technologies to create a single new product because too many small patents are spread among too many players).” 

Patent trolls buy up patents in bulk, typically from bankrupt companies, not for actual use but simply to hit other innovators with lawsuits for patent infringement, forcing them to settle to avoid fat legal bills. One US study estimated such legal costs at $ 29 billion in 2011 alone. 

Last year, Google bought Motorola’s failing smartphone business for $ 12.5 billion, to access its 17,000 patents. Microsoft and others paid $ 4.5 billion for 6,000 patents from Nortel. Most of these will never be used in actual production: they are simply kept as legal weapons for possible lawsuits. This has nothing to do with innovation, which patents are supposed to promote. 

The West’s over-liberal patent system is broken. It should learn from India’s much tougher system. Patents should be seen as monopolies, to be given sparingly only for genuine innovations where the public benefit clearly exceeds the monopoly cost. This means setting a high bar for innovation. High standards are desirable for patents, as for everything else.

Why Cook's right for England

Or: the merits of long-term character over short-term flashiness

Ed Smith

April 3, 2013

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	Cook: not a "natural" leader, and that's perfectly fine © PA Photos  Enlarge
Related Links Players/Officials: Alastair Cook | Brendon McCullum Matches: New Zealand v England at Auckland Series/Tournaments: England tour of New Zealand Teams: England

Alastair Cook took on the job of England Test captain with a reputation as a man unlikely to spring many surprises. In fact, he has produced two shocks already: a series win over India, coming back from 0-1 down, and then a scramble to avoid series defeat against eighth-placed New Zealand.

Captaincy being what it is - a convenient mechanism for pundits to shoehorn their general opinions of a team into a judgement of a single human being, as though the captain actually is the team - Cook has already experienced an accelerated cycle of ups and downs. Lauded in India, he was immediately widely criticised for his tactics in New Zealand.

Both judgements were hasty and incomplete. India first. England did superbly to win the series. But it was, in fact, a moment of hubris that let them back into the series. India prepared an ultra-turning pitch for the second Test, in Mumbai, mistakenly believing they were attacking England's weakness. In fact, the decision empowered Monty Panesar, who helped swing the series. On flat pitches, as we later saw in New Zealand, Panesar would have been unlikely to challenge the Indian batsmen. If India hadn't got cute with their pitch preparation, England would have struggled.

Then, in New Zealand, though Cook clearly made some mistakes, I saw nothing to challenge my initial view that Cook possesses the tools to become a very considerable England captain. In fact, after one winter in the job, I think it is more likely than ever that Cook will prove to be the right man for the job. If the England management takes a single lesson from the tour, it should be to do everything possible to provide Cook with as much support as possible. Here are three reasons why England should feel optimistic about backing Cook:

A huge question mark about all captains is how office will affect their individual performance. A captain has a short shelf-life if he doesn't produce his fair share of runs and wickets (invoking the example of Mike Brearley does not buy much time in the modern game). Cook's form, if you take the whole winter as a whole, has been spectacular. Seven matches, four hundreds, all of them scored in critical situations.

Ah, but we always knew he could bat. Can he set a field? Many successful captains have been widely regarded as tactically unremarkable. Allan Border was never talked about as a captain who set innovative, surprising fields. He relied on leading by example through his personal resilience and tenacity. It worked. Andrew Strauss led England to two Ashes victories, throughout which time a standard view in the media was that he was "tactically naïve". I challenge anyone to reach 35 years old as a professional sportsman and remain "naïve". No, the word is "cautious", or, if you're feeling more generous, "conventional".

The crucial point here is that you never get everything with one captain. Imagine having to choose between two leaders. The first is a talented, adventurous tactician who is personally unreliable and a flaky performer. The second is a strong, reliable player and a courageous person but a cautious and unsurprising tactician. Give both captains 50 matches in charge with the full support of the management. I know where my money lies about who will achieve the better results.

	I asked Geoff Boycott if he could remember an England batsman who had a more admirable talent-to-performance ratio. Boycott had to go back to David Steele before he could think of someone who had squeezed more from his ability

The media generally overrates captains who are exciting and interesting to watch. That is partly because such captains provide more talking points, hence making the media's job easier. Alpha-male captains also receive disproportionate praise. Pundits are quick to credit the work of "natural captains" - by which they usually mean people with gladiatorial body language - even though a moment's reflection reveals that the whole concept of a natural captain is undermined by the extraordinary diversity of characters who have become successful captains.

We saw the "alpha male/pro-adventure" bias at work in the reaction to Brendon McCullum's captaincy. The experts loved him because he was bold, intuitive and original. And I would generally agree. But a bandwagon effect emerged in which everything McCullum tried was greeted with gasps of admiration, while many tactics Cook used were written off without first considering whether it was the fault of the tactic or simply the fault of the execution by the bowler.

Let me give two examples to balance the ledger. On the last morning of the final Test, in Auckland, McCullum, searching for a victory, opened the bowling with the part-time offspin of Kane Williamson rather than his best bowler, Trent Boult. The batsmen at the crease were Ian Bell and Joe Root, both accomplished players of spin. By that point in the series, however, it had already been decided that McCullum was "a brilliant tactician", so the mistake slipped by mostly without criticism.

A second example came in the over before the second-last one of the match. After the fourth ball, McCullum seemed undecided about whether to bring up the field or leave it out. It seemed to me that everyone in the New Zealand team had an opinion and McCullum was finding it difficult to navigate events. Finally, watch again the last over of the match. Many arms were waving around in the field, not all of them belonging to McCullum. Had it been Cook, this would have been taken as evidence that he was insufficiently "in charge".

My point, far from attacking McCullum, is two-fold. First, the incredibly challenging role of captaincy demands constant decision-making, not just "natural leadership". Secondly, any captain can be easily criticised if you are minded to search for mistakes.

We already know enough about Cook to be sure he is an exceptionally balanced and accomplished young man. At the age of 28, he has more hundreds than any other Englishman. More revealingly, he has batted with more prolonged calmness and self-awareness than any English player I have seen. In New Zealand, I asked Geoff Boycott if he could remember an England batsman who had a more admirable talent-to-performance ratio. Boycott had to go back to David Steele before he could think of someone who had squeezed more from his ability, and Cook, of course, has far more ability to squeeze.

In making predictions, we should be guided by past achievements. Cook has a proven record of self-improvement. After one winter of varied, difficult Test cricket, there is no evidence to overthrow the presumption that Cook the captain will follow a similar path to Cook the batsman. Put differently, English cricket should back long-term character not short-term flashiness.

****

A favourite theme of this column is the tension, in both sport and life, between rationality and intuitive judgement. There is no doubt about the orientation of Trouble With the Curve, Clint Eastwood's new film about baseball. It is a manifesto for homespun wisdom, experience and intuition, and a thinly veiled attack on data, innovation and novelty.

Eastwood's film is the inverse Moneyball. Michael Lewis' story was full of liberal optimism, how the scientific method could shine a light on sporting success. It lampooned the faux-wisdom of old baseball scouts, the crusty old men in baseball jackets with their arch-conservatism and imperviousness to the evidence. Now, with Trouble With the Curve, we have the conservative rejoinder. These flash guys with laptops: phonies, charlatans, lightweights. The old men in the stands: sages, gurus, keepers of the flame.

You do not have to take sides to enjoy both interpretations of sport. Indeed, perhaps not taking sides ideologically is a prerequisite for a full enjoyment of sport. Five years ago I wrote this in my book What Sport Tells Us About Life:

We are what we want to see when we watch sport. The angry fan finds tribal belonging; the pessimist sees steady decline and fall; the optimist hails progress in each innovation; the sympathetic soul feels every blow and disappointment; the rationalist wonders how the haze of illogical thinking endures.

What I failed to point out in that paragraph is that we all, to some degree, take on each of those perspectives within one lifetime. One individual sports fan can be all of those people, sometimes simultaneously.

Sport provides us with a never-ending conversation about the nature of experience. Not only do we constantly change our minds, we never reach a final judgement. We are right not to.