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Novartis Loses Patent Battle in India: Time to Realign the Business Model to Emerging Markets?
On April 1, 2013, the Supreme Court of India rejects Novartis' patent application for its cancer treatment drug, Glivec. Many share the opinion that Indians should have access to cheaper generic alternatives for life-saving drugs and that multinational pharmaceutical companies should not be allowed to benefit from prolonging a drug's patent life. However, these companies often spend decades and invest billions of dollars to develop just a single drug. Novartis' existing business models and pricing strategies in the United States, Western Europe and Japan now need to be re-evaluated for emerging markets such as India; taking into account affordability, limited access to health insurance and government safety nets, different marketing and distribution networks, and the powerful generics lobby. What should Novartis' strategy be in India, and for emerging markets in general?