By Kejal Vyas 

BOGOTÁ -- Colombia's government will override Novartis's patent on a cancer medication by the end of May and open it up to generic manufacturers unless the Swiss pharmaceutical giant accepts a price cut, the country's health minister said Friday.

Citing severe strain on its universal health-care budget, Colombia says it needs to break Novartis's monopoly on imatinib by issuing a compulsory license, an exception to a patent when deemed a matter of public interest.

The government says it plans to make the drug -- marketed as Gleevec or Glivec for use against leukemia -- available at a cheaper price, with or without the consent of Novartis, despite what the Health Ministry says has been international pressure against the move.

"Technological pressure and high drug prices have brought the health-care system to a financial crisis," Alejandro Gaviria, the health minister, said in an emailed response to questions. "Colombia is a paradigmatic case of a middle-income country, with a growing health system and with rising expectations from its middle class, which cannot pay high prices for new drugs."

Novartis spokeswoman Julie Masow said the company "is aware and sympathetic" to the financial challenges in Colombia and is actively seeking a resolution.

But compulsory licenses, she said, "should never be used to force price negotiations, as is the case here. This would create a damaging precedent that could apply to all patent-covered innovations -- pharmaceutical or otherwise."

Colombia, a country of 47 million that economists view as market friendly, has never before issued a compulsory license. The debate over imatinib has the potential to set an important precedent for developing countries and the battle against soaring drug prices, said James Love, director of Knowledge Ecology International, a Washington-based advocacy group that works on intellectual property issues.

"This is a test for Colombia. If they don't stick to their guns, they'll basically have a sign on them that says 'Kick Me,'" Mr. Love said.

Mr. Gaviria said the use of a compulsory license wouldn't lead to similar moves on other drugs. "It's a legal mechanism, but exceptional," Mr. Gaviria said. "And that's how it will continue being."

Gleevec was Novartis's biggest-selling drug last year, with revenue of $4.7 billion. However sales from the blockbuster drug are poised to decline sharply after a cheap generic version launched in the U.S. in February.

Authorities in Colombia say a proposal to cut the drug's regulated price to less than half of the $15,000 it currently costs each patient a year was rejected by Novartis, even though the proposed price was above comparable generic versions.

Imatinib has been sold in Colombia since 2003 and is currently used by 2,000 patients. For nearly a decade, it wasn't under patent protection, giving rise to generic competitors who sold it for about half the price, according to the Health Ministry. A 2012 Colombian court order then granted Novartis a patent until mid-2018.

About a decade ago, Colombia began paying for new medicines not included in its benefits portfolio with public funds. "Pharmaceutical companies, providers, and doctors quickly realized that the state was willing to pay for almost everything (at almost any price)," Mr. Gaviria said in a 2014 paper for the International Monetary Fund outlining the challenges in keeping the health-care system solvent.

"Countries have a right to negotiate the prices that they are going to pay and use the legal mechanisms at their disposition," Mr. Gaviria said in his email.

--Denise Roland contributed to this article.

Write to Kejal Vyas at kejal.vyas@wsj.com

 

(END) Dow Jones Newswires

May 20, 2016 15:03 ET (19:03 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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