India Moves Even More Of Its Healthcare Away From Western Pharma

from the why-pay-more? dept

Wed, Jul 11th 2012 1:54pm — Glyn Moody

A few years back, Techdirt noted that India had 16,000 licensed drug manufacturers in the 1990s, and became a net exporter of pharmaceutical products. Things changed somewhat when India joined the WTO, which forced it to recognize pharmaceutical patents, but more recently it has started moving back towards generics, notably with the compulsory licensing of a kidney and liver cancer drug that was being sold by Bayer in the country for around $70,000 a year.

Now India has made another bold move in the field of healthcare:

From city hospitals to tiny rural clinics, India's public doctors will soon be able to prescribe free generic drugs to all comers, vastly expanding access to medicine in a country where public spending on health was just $4.50 per person last year.

The plan was quietly adopted last year but not publicized. Initial funding has been allocated in recent weeks, officials said.

Under the plan, doctors will be limited to a generics-only drug list and face punishment for prescribing branded medicines, a major disadvantage for pharmaceutical giants in one of the world's fastest-growing drug markets.

That's clearly going to have an immense effect on a country where 40% of the population live on $1.25 or less, meaning that paying for drugs is out of the question. The article quoted above estimates that 600 million people could take advantage of the scheme over the next five years.

But it will also have a major impact on the Western pharma companies, since it will effectively lock their products out of one of the two most important markets for the future. Combined with the compulsory licensing of more modern drugs, the latest move by India is deeply troubling for the world's main drug companies. That's reflected in both Bayer's attempt to contest the compulsory licensing order, and USPTO deputy director Teresa Stanek Rea's extraordinary claim that the move was in violation of TRIPS, clearly not the case.

India's decision to adopt generics across its entire healthcare system also stands in stark contrast to provisions in TPP that will make it much harder for local manufacturers in signatory countries to produce generics legally. As a result, TPP looks more and more like an attempt to lock emerging countries into old and one-sided business models that are stacked against them.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: generic drugs, india, pharmaceutical patents, teresa stanek rea, trips, uspto
Companies: bayer

13 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 11 Jul 2012 @ 2:13pm

Under the plan, doctors will be limited to a generics-only drug list and face punishment for prescribing branded medicines

I am strongly in favour of plans like this one that increase access to medicines for people who can't afford them at monopoly prices, but I am concerned that coercion of doctors is an overcorrection. Could that not be seen as anticompetitive in the other direction?
[ link to this | view in thread ]
surfer (profile), 11 Jul 2012 @ 2:13pm

what if find ironic..
is all these Big Conglomerates, be it big pharma, big oil, big content.., they are stacking up an incredible amount of hashes in the lose column of late. with all their politicians bought and paid for, and still not getting their way, i would think they (being the lobbyist/shareholder/politician) would start to get annoyed at all the loss of money, being as greedy as they are.

what i found ironic was the fact that they are all being beaten with little to no expenditures on the part of the winners.. i like the direction, perhaps one inch at a time and we might just save this planet by moving into this century.
[ link to this | view in thread ]
Anonymous Coward, 11 Jul 2012 @ 2:16pm

'As a result, TPP looks more and more like an attempt to lock emerging countries into old and one-sided business models that are stacked against them'

just like all similar bills/treaties/laws whatever you want to call them, it's designed to do nothing but benefit the US and certain US industries. how the hell are people being paid less for a year than someone on minimum wage gets for a day, supposed to pay $70,000 for life preserving treatment? best of luck to India and anyone else that goes down the same road. at least it appears to be putting people first, which is more than can be said for the US where industries and profits take priority!
[ link to this | view in thread ]
Anonymous Coward, 11 Jul 2012 @ 2:45pm

The US needs to take this direction as well. One of the major costs viewed for the future is the baby boomers entering medicare. I don't care who you are, $70,000 is outrageous just for A DRUG TREATMENT. Not to mention this is only one treatment of many, often with higher costs.

Our government is corrupt and bankrupting the country in the process.
[ link to this | view in thread ]
The eejit (profile), 11 Jul 2012 @ 2:46pm

Re:
Whyso? The generic versions are exactly the same drug.
[ link to this | view in thread ]
Anonymous Coward, 11 Jul 2012 @ 3:07pm

Re: Re:
Except for when their is no generic version of some new drug.
[ link to this | view in thread ]
arcan, 11 Jul 2012 @ 3:11pm

Re:
the 70 grand is how much the generic manufacturers have to pay to be able to produce the drug.
[ link to this | view in thread ]
Vog (profile), 11 Jul 2012 @ 3:24pm

Re: Re:
No, $70,000 per year is the cost of the drug to the consumer. Did you read the linked article?
[ link to this | view in thread ]
Beech, 11 Jul 2012 @ 4:38pm

I kind of understand that drug prices kind of have to be higher than you'd expect because although the marginal cost to produce them is low, the costs of development, testing, and approval are obscene and need to be made up for.

But that said, if $70k a treatment isn't pure gouging I don't know what is. Subsidizing new drugs is important, but there NEEDS to be a limit to how crazily high they can jack up the price.
[ link to this | view in thread ]
RonKaminsky (profile), 11 Jul 2012 @ 4:48pm

Re: Re: Re:
Which means (you did read the post, right?) that neither the patient, nor, it seems, the nation as a whole, could possibly afford using the drug anyway.

You did see that this applies to "public" doctors? The very rich of India will simply go to private doctors.
[ link to this | view in thread ]
Raj, 11 Jul 2012 @ 4:49pm

Opportunity for big pharma
As with other IT industries, big pharma should simply start developing drugs in india itself! The win for them here would be lower-cost drug development. Of course, they have the power (and india has the need) to get an FDA equivalent that is much less anal than the US one is.

It might take longer for them to bring such drugs to the US market, but who cares? They create drugs in india, make their money here.
[ link to this | view in thread ]
Anonymous Coward, 11 Jul 2012 @ 5:27pm

Re: what if find ironic..
PAst winnings were directly related to being able to stifle the flow of information. The internet is slowly correcting this deficiency all the world over.
[ link to this | view in thread ]
patent litigation, 16 Jul 2012 @ 9:33am

good news
I, for one, am heartened not only by the Indian Patent Office's decision to grant a compulsory license, but also by the further news that India now has plans to distribute some life-saving drugs for free. That -- and not gouging suffering patients at every possible opportunity -- seems to me to be the epitome of corporate responsibility.
[ link to this | view in thread ]