Novartis stops investing in India

What is the objective of a company? We accept, that people want to earn money. Money makes the world go round. As we read newspapers, watch TV, talk with friends, we all accept, that we want to earn money to buy stuff.

We all know, how communism has failed. And we all know that greed is a sin. But as we do not want to work all day without receiving money, therefore also accepting, that we have to pay for what we want to buy.

One might talk bad about money, but in the end, money is an accepted auxiliary to get what we want and need.

We also accept, that Ford didn’t build cars to aid the drive-in cinemas but to earn money.

Somehow, we do not feel comfortable if physician see the patient as a means to earn money. Therefore we have the Hippocratic Oath. And we feel a bit uncertain about pharmaceutical companies.

As we accept their right to earn money, we also want them to research better medicine and as a formula once discovered can be easily copied, we have the concept of patents to allow companies researching to profit from their research.

Now India has denied Novartis certain patents. Of course we understand the concern and the responsibility of governments for their people and that supplying patients with cheap medicine is per se a good thing. But those countries are also whining about foreign countries neither doing research and development of pharmaceuticals nor they are not researching medicaments for the specific need of poor countries.

It is not just India. Also Africa and South America, patents tend to be ignored and this with the consent of the governments. Why should Novartis invest millions trying to find a cure for Malaria and other Third World diseases when they can expect that even when they find a cure, they will receive no ROI (Return on Investment). It takes more than ten years to do that kind of research.

As a shareholder of Novartis, I want them to earn money to pay dividends. If Medicins Sans Frontieres (MSF) really want to find cure for those diseases, they either have to protect the companies patents or pay themself for the development of such medicine.

Novartis has, in a first reaction, stopped investing in their R&D. Daniel Vasella, CEO of Novartis, has said in an interview with the Financial Times that „this is not an invitation to invest in Indian research and development, which we would have done. We will invest more in countries where we have protection. .... Do you buy a house, if you know people will break in and sleep in your bedroom?“

Seems that China will be the beneficiary for some hundreds of millions worth investing.