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Lessons from the Novartis patent rejection case

Financial markets have so much influence!

On everything from major company decisions to governmental policies that affect millions of people. But the influence exists only because it is allowed to exist. CEOs make hard decisions about what products to launch, when to launch, how much to invest in R&D, and so on with financial market reactions as one of the key drivers. Governments decide on policies like FDI limits, import subsidies, tax breaks and so on also with half a mind on the potential impact on the financial markets. This allows a few institutions with short-term profits (most of the time) in mind, to influence all such important decisions.

In this scenario, the decision to not grant Novartis a new patent was a commendable one. The reason for rejecting the patent claim was that the new process made no difference to the efficacy of the drug. This saves a lot of money for the people and makes the drug affordable to those who wouldn't otherwise be able to afford it. It looks like a populist measure, and one that can be expected to scare off foreign investors, and the Novartis stock price took a hit as a result (as expected).

The decision is commendable because it paves a better outlook for the common man. The regulatory systems in place in the country is supposed to take care of the interests of the common man and that is exactly what has happened here. Sure, this might slow down investment for a while (short-term). But India is a huge market and nobody wants to be left out. Companies like Novartis will focus their R&D efforts on real improvement now (improvement that actually benefits the end customers).

This example must strike a chord with every marketer. Although it is the job of the marketer to increase sales for the company, it is also his prerogative to take care of the interests of the customer. It is the marketer's job to understand what a customer needs and to enable delivering a product to him that satisfies those needs. Merely trying to increase short term sales does little good to both the customer and to the brand he represents.

The lesson from the Novartis patent rejection case is to understand who matters to a brand, whose life it claims to impact for the better, and to act in a way that that person will want the brand to act. Anyone can make tall claims, show flashy ads and fool (?) the customer into buying his product. But can you earn the trust, can you make the customer believe in you?

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