Putting Lives Before Patents: India Says Pricey Patented Cancer Drug Can Be Copied
from the hello-compulsory-licenses dept
India has an interesting relationship with pharmaceutical patents. In 1970, India did away with drug patents entirely, believing it would help create a domestic drug industry. And it worked. As we discussed in the past:2,237 licensed drug manufacturers in 1969-1970 grew to 16,000 by 1991-1993, production of drugs grew at an average rate of 14.4% per year from 1980 to 1993, India became a net exporter of pharmaceutical products, and the market share of foreign multinational corporations (MNCs) dropped from 80-90% to 40% (Fink 2005). In 1995, six of the top ten pharmaceutical firms in India were domestic, and employment in the sector had reached half a million peopleNow, remember how people say that without intellectual property, industries protected by those monopolies collapse? Yeah, the opposite happened in India. And yes, many were producing generic versions, but not all of them were. Either way, despite all of this success, the international community, pressured by the big pharmaceutical firms, cracked down on such practices, and demanded that if anyone wanted to join the WTO -- an important organization for large countries to be a part of -- they had to recognize pharmaceutical patents as per the TRIPS agreement. India finally did so in 2005.
However, one key point in TRIPS that developing countries such as India and Brazil have paid close attention to is the fact that they can force a compulsory license on a drug patent holder in the interest of public health.
For the first time since re-instating patents on pharmaceuticals, India has granted just such a compulsory license, covering a kidney and liver cancer drug marketed under the name Nexavar. Indian generic drug company Natco requested a license, noting that Nexavar was in short supply in India and exceptionally expensive. A typical dosage costs around $70,000 per year in India -- something Bayer says is necessary to recoup the drug's R&D costs. However, reports show that it cost less than $300 million to develop this drug (not to mention that the US government subsidized the process) and Bayer has already made billions selling the drug around the world. In a detailed ruling (pdf and embedded below), India's Controller of Patents (nice title) granted Natco the right to make the same drug, requiring it to sell it at a significantly lower price than Bayer sells Nexavar for, and then pay back to Bayer a 6% royalty rate (which is actually at the high end of what the UN recommends). Natco has to make the drug itself and can't name it Nexavar, make it look the same or even state that it's the same as Nexavar -- but it can make its own version of the drug and sell it, and the license lasts the life of the patent. Bayer can and almost certainly will appeal, but this is going to be interesting to watch for a few reasons.
The real question here is how the US will react to this. The Obama administration has been trying to exempt drugs that treat non-communicable diseases (such as cancer medication!) from such compulsory license rights. In the meantime, the big (non-Indian) drug companies have been working hard to lock up the Indian drug market with patents. Not surprisingly, the Obama administration and the big drug companies have a cozy relationship when it comes to dealing with patents in India.
It's likely that you'll start to hear some rumblings from the US government about how this kind of ruling is a "problem" and how India isn't "respecting" international patent law. Expect to see diplomatic pressure placed on India to put limits on its compulsory licensing program, and potentially even noises about how India has to change its patent laws to "update" them and "harmonize" them with the world. Also don't be surprised if stuff like this leads India to jump up the charts on next year's Special 301 reports from the USTR, which list "naughty" countries. It's probably too late to make it into this year's list for this particular move. Is it really any wonder that India is so worried about ACTA? It knows that ACTA is entirely about ratcheting up enforcement, without any exceptions for things like this where something as important as saving lives comes into play.
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Filed Under: cancer, compulsory license, health, india, nexavar, patents, pharmaceuticals, trips, wto
Companies: bayer, natco
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But....what about the life of the corporations?!
Without these patents, "people" die!
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India's Controller of Patents (nice title)
"saving lives comes into play." Pish posh Mike. How dare you put lives before corporate profits.
Must be one of those them there Lord High Piracy Apologist Pirates.
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Re: India's Controller of Patents (nice title)
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Compulsory licensing would be a solution, but it cannot be "at any price". There has to be a respect for the costs (and risks) involved in developing the medications. Without balance on both sides, we may in fact be shooting the golden goose.
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Making a profit is fine, telling people they can either die or give you more money than they can ever make is extortion.
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There should be no such respect because that respect comes at the exclusion of others who could come in and do a better job at producing or finding something.
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But... but... but ... corporate profits!!!
Who cares about lives or innovation, BIG CORPORATE PROFITS!!!!!
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Sad to say, but without a profit motivation, and without a bottom line benefit, these drugs likely would not have existed at all. So what you are really saying is "you can pay nothing, and die, or pay something and get medication". By saving one life today by giving them free or very cheap drugs today, and hurt the potential for future developments in the field.
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Putting Lives Before Patents: India Says Pricey Patented Cancer Drug Can Be Copied
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Prize Money instead of Patend
Senator Sanders Introduces Medical Innovation Prize Bills
http://www.techdirt.com/articles/20110527/09213714456/senator-sanders-introduces-medical-inno vation-prize-bills.shtml
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The profit motivation is still there without the granted monopoly, people will still produce and finance others to find new drugs which by the way is a function of the government, most new drugs start not in private labs but public ones funded by public money.
The sad reality is that we don't need the monopolies, we need the freedom to make and trade. Those idiots that believe exclusionary tools are good will eventually be bitten by those same rules.
India and Brazil are becoming biotech giants in their own rights and none of them had protections before only recently, how without granted monopolies they did that if without them it shouldn't be possible?
Answer: Because that line is just BS, companies still have a strong incentive to create or they would fail in the market and they do so more aggressively and the only things that regulates prices are competitors without them prices go up and quality goes down. America is just proof of that, prices are high, so high that is cheaper to travel to another country and have five stars treatment in them than it is to do it in the USA. Americans discovered that going to New Zealand is cheaper and with the same quality of treatment, an Indian eye surgeon is probably more able than any American doctor just because of the sheer number of operations he needs to perform in any given day and that goes for manufacturing, the more people allowed to enter that market the more sources there will be, the lower the prices and the higher the quality of those products since everybody will be building off of others accomplishments and that knowledge spreads, while in a monopoly if that one entity disappears so do that knowledge, is like putting all ones eggs into a single basket and hoping for the best.
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Re: But....what about the life of the corporations?!
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I would say "I hope those thieves get cancer" but they seem to have a solution to that.
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Monopolies will destroy the USA.
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The rising cost for health care is one of the major problems in the Western world, closely connected to the ageing population. It seems we need to get to the root of the problem and exorbitant profits of Pharma companies seems a good start.
Yes, I said exorbitant profits, not profits. Profit=Good, Greed=Not good.
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US sitcoms are popular among the Indian kids.
You won't find any porn channels though. Or, European 'art' films :P
( Though, you could just download a torrent. )
Lived there for a year ^_^
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If only the drugs were as cheap everywhere. Only the 1% can afford medication that costs $5K per month...
It would be awesome if India could sell these affordable life-saving drugs all over the world...
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ACTA applies to patents too...
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Dumb statement: "However, reports show that it cost less than $300 million to develop this drug". Maybe. But if you average it over other drugs, money were spent on, but which didn't make it to the market, the picture will be quite different (see Forbes article below)
http://www.forbes.com/forbes/2012/0312/strategies-pharmaceuticals-lilly-stagger-cost-inventi ng-new-drugs.html
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http://www.forbes.com/forbes/2012/0312/strategies-pharmaceuticals-lilly-stagger-cost-inv enting-new-drugs.html
There is a cost "per drug" (one particular, that costed 300 mln) and an average cost (including the ones that failed, hence never make any money; they are in billions - see above).
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People are back to acupuncture, homeopathy and shamans.
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Its the Advertising....
If the $300 million is just for development, then you can be sure another $600 million will have been spent on advertising.
Why cannot the entire budget be spent on the R&D of the drug? At least make sure the majority of money is spent on R&D. This would decrease the costs of medications for consumers and increase the knowledge base for the drug companies.
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The high cost of developing drugs shouldn’t be a badge of honor for drug firms; there’s no reason it has to be this expensive. The outlay doesn’t justify the high cost of prescription drugs--just because something was expensive to create doesn’t make it good. On the other hand, even high-cost drugs are only a small factor in rising health costs. Medicines are just easy to scapegoat because their prices are easy to track. We can all only hope that new technologies and a better understanding of biology will turn things around.
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Perhaps it's time that patents expire whenever the costs to create the invention in question have been recouped.
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Our government already funds portions of drug studies. These companies then turn partially taxpayer-financed research into 100% private monopolies on the drugs. So we as a society foot some of the bill and get NOTHING back.
Screw them. I would rather the government support funding for drugs which the public would then have cheap access to, as a right for having participated in financing the research.
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Re: Its the Advertising....
Perhaps a nice catchy slogan, something along the lines of 'Random Drug X: Take it to not die.' Simple and to the point no?
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Now, can you see why pharma, big and small, has a bad name?
For North America and Europe this isn't as much of an issue as it is in places like India because at some point Bayer gets to gouge insurance companies/systems instead of individuals. Or Bayer may hope it isn't. Frequently patients will find themselves waiting to get a drug (perhaps this one) while a mess of hoops get jumped through before an insurance carrier or system demand to know if this is the only medication that will aid the customer so they can avoid the high cost.
In most other industries once the up front is paid off the next step is to get the product as widely used as possible to gain as much of a profit as possible to plow into the next one coming down the pipeline. It seems to me that lowering the price, even to $35,000 would get the drug more widely used and allow Bayer to make a greater profit which they then could invest in whatever else they're working on. Doesn't seem to work for pharma. (I'm sure there's a convoluted reason why it doesn't which will be explained to me by a pharma defender so I'll wait to see what it is.)
Then there's the opaque path a lot, if not most, of the research into new medications takes place. Most takes place at publicly funded schools who bear most of the cost or at private universities with injections of public funds as seems to be the case here. So the total risk taken by Bayer in developing this medication is far less than it would have been had it all been done in house. (The same applies when public funds are injected directly into in house research and development by drug companies.)
While the testing costs remain I'm unsure where "pure research" does as drug companies usually sponsor that at universities often far better equipped for that sort of thing and they aren't the largest sponsors by far.
As I said. I'm not talking about selling it for pennies. I am talking about getting a price point in a given market where the drug will actually sell and do what it was intended to do. In this case save a life.
Ultimately if pharma isn't in business to save lives or help repair broken ones then their market, at one point or another, will cease to exist. Over time there won't be anyone left to pay any price.
That extreme answers your extreme that ANY reduction in price will hurt future developments in the field. Maintaining stratospheric prices after your R&D is paid for is morally unconscionable it's also silly in the market for the simple reason that lowering the price means insurance providers and medical systems will be more likely to approve the use of the drug meaning the more MDs will be likely to prescribe it. Meaning you actually sell more of it. Or, in this case, Bayer does.
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learning by example
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