After India, Now Indonesia Introduces Patent Licenses For Generic Versions Of Drugs

from the who's-going-to-be-next? dept

Thu, Oct 18th 2012 3:17am — Glyn Moody

As we noted a couple of weeks ago, when we wrote about India's moves to issue compulsory licences for the production of generic versions of expensive, patented drugs, the big fear for Western pharmaceutical companies was that other countries might follow suit. It looks like that's happening in Indonesia, where the country's president has signed a decree authorizing low-cost versions of key HIV drugs:

the measure would introduce widespread generic competition and generate major cost savings in the world’s fourth most populous country. The decree licenses patents for a slate of HIV medicines, and represents one of the most robust uses of pharmaceutical patent licensing power by a country since the World Trade Organization 1995 Agreement on Trade-Related Aspects of Intellectual Property (WTO's TRIPS).

Again, the concern for the major drug manufacturers must be that this latest move will encourage even more countries to start granting patent licenses for drugs needed by their populations, but which are currently unaffordable thanks to Western-level pricing. Indeed, it's hard to see what can stop that happening now that India and Indonesia have shown the way by invoking the right of countries to issue compulsory patent licenses, as enshrined in TRIPS.

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Filed Under: drugs, india, indonesia, patents, pharmaceuticals

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yawar, 18 Oct 2012 @ 3:39am

events
Google sends invitations for Android event on 29th October.

http://huntall.com/google-sends-invitations-android-event-29th-october
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Zakida Paul (profile), 18 Oct 2012 @ 4:00am

These pharma companies and the governments who bow to them are the real terrorists of this world. They hold vital drugs hostage with ridiculous mark ups and patent licenses so that the people who really need them are unable to have access to them.
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Richard Ahlquist, 18 Oct 2012 @ 4:02am

And big pharma's response
All big pharma will do now is whine about foreign drug sales, get customs to lock mail-order medicine from outside the country down tighter. We are not likely to ever see an end to the price gouging here in the US.
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Anonymous Coward, 18 Oct 2012 @ 4:23am

The big fear for Western pharmaceutical companies is what, that no sales will be replaced by sales of a locally made cheap product. It seems that they would rather let people die than make drugs available at an affordable price. So long as the drugs are not exported the impact on their bottom line is nearly zero.
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abc gum, 18 Oct 2012 @ 5:03am

This is another step in the march towards third world status.
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Big Al, 18 Oct 2012 @ 5:42am

Re:
" It seems that they would rather let people die than make drugs available at an affordable price."
That certainly seems to be the way they're going in their relentless pursuit of profits at any cost.
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Anonymous Coward, 18 Oct 2012 @ 5:54am

Re: Re:
What profits, no sale equals no addition to profits. It would make more sense for the to sell at a reasonable price in such markets as some profit is better than none.
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Anonymous Coward, 18 Oct 2012 @ 6:52am

+2 for mankind.
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Ho Chin, 18 Oct 2012 @ 6:57am

Re: And big pharma's response
Its already cheaper to get a ticket to India, fly down, get operated, get generic drubs, see the Taj Mahal and come back than to get treated for an infection here in the US.
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Anonymous Coward, 18 Oct 2012 @ 6:57am

Re: Re: Re:
A reasonable price in such a market is hard to set.

1. It is a heterogenous market with some able to afford very high prices and a large percentage still not able to afford it at a much lower cost. Generally: The poorer the country the less linear the pricing curve is!

2. If you lower a price too much, you will start to see parrallel import to other market and competition against your own company! Look at publishers of books and their fight against that import! That is completely unacceptable for a company and to bet that it will get caught and shot down in court is just too shady for the companys renome and very risky.

3. You need to look at "overhead" and compare it to the research-investment. You cannot afford to have a low overhead with more than 5 years (or whatever the lenght of the patent is.) payback-time on research-investment since the peanuts after a patent goes out of order is not really enough.

Taking those effects into account it is almost impossible for the company to enter the poorer of markets!

Compulsary licensing is actually a somewhat good deal for the company. It no longer has to enter the market and they will get some money out of it. The compulsarily licensed product is illegal to move to other markets for sale and it is a lot easier to spot in costums.
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Anonymous Coward, 18 Oct 2012 @ 6:58am

Re:
"It seems that they would rather let people die than make drugs available at an affordable price."

Sort of two sided. Would you like them to jack the price up in the Western markets another 30% to make up for it? Do you really think it's fair to keep making the western countries pay for it all? Is it an American's fault for doing well, is it America's fault for having one of the biggest economies?

I think they would love to make the drugs available at an affordable price, but also at one that allows them to stay in business. Generic companies don't have to pay for the research to get there, making it possible for them to sell for much less. It's not really fair, is it?
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Ninja (profile), 18 Oct 2012 @ 7:04am

They could have profited by reaching more people but no, why allow cure and relief for millions when we can extort a few?
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silverscarcat (profile), 18 Oct 2012 @ 7:07am

Re:
"They could have profited by reaching more people but no, why allow cure and relief for millions when we can extort a few?"

When was the last time you heard of a disease getting cured?

There's no profit in cures, just treatments.
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Anonymous Coward, 18 Oct 2012 @ 7:33am

Re:
Do you think they could profit by selling stuff at a loss?

You clearly don't understand business.
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Spencer (profile), 18 Oct 2012 @ 7:59am

Re: Re:
You honestly think that any drug costs $70,000/treatment to produce?

Pharma companies set prices high because their business is literally "pay or die", so they can get away with it.
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Anonymous Coward, 18 Oct 2012 @ 8:17am

Re: Re: Re:
The marginal cost is not $70k/treatment, but when you include the fixed cost for R&D it is. Someone has to develop these treatments.

I understand why the governments of these countries would do this. It makes sense to me and I'm glad lifesaving treatments are available to the 3rd world poor. But they only work in a world where the US has its current set of laws and market conditions that allow pharma companies to recoup their development. Our high healthcare costs subsidize the research and development of these kinds of treatments that the whole world gets to use. Other countries - even western european ones - pay much less for drugs because their laws limit pricing and patent-based monopoly on new drugs.

I look at it not as a negative but rather as one of the ways that the richest country in the world gives back a little bit. But if we adopt a healthcare system that mirrors Western Europe odds are pretty good that either other countries are going to start feeling the pain of prescriptions or a lot less money is going to be spent on researching new treatments.
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Anonymous Coward, 18 Oct 2012 @ 8:32am

Re: Re:
Human life > profit
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Anonymous Coward, 18 Oct 2012 @ 8:53am

Re: Re: Re:
That's the case. Unless those fairly priced drugs will start to pop up in different market. The only solution Pharma sees is to limit the manufacturing capacities, to ensure that locally produced drugs are locally consumed and not exported.
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Anonymous Coward, 18 Oct 2012 @ 8:55am

Re: Re: And big pharma's response
That's if you make it back. Read an article in latest "The Economist". Chances that you'll get a fake drug is 20-80% in a third world countries. Ready to take a chance, or you'll be bringing your own meds?
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varagix, 18 Oct 2012 @ 9:01am

Re: Re:
How can you sell medicine at a loss? It quite literally takes pocket change to produce a handful of pills. You could only lose money on making medicine if you gave it away for free.
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out_of_average_bob, 18 Oct 2012 @ 9:23am

Remember, kids. I mean filthy pirates.
If you can't afford it you should just do without. Just like how blind people aren't entitled to modified ebooks. Don't be a filthy life pirate.

Blargha flargha!
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Anonymous Coward, 18 Oct 2012 @ 10:57am

Re: Re: Re: Re:
Stop rolling the massive marketing budgets into 'R&D,' and we'll get more realistic numbers.
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The dude, 18 Oct 2012 @ 12:50pm

Re: Re: Re: Re: Re:
And don't forget the part of the research that is funded by the public.
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Anonymous Coward, 18 Oct 2012 @ 5:20pm

Re: Re: Re: And big pharma's response
Nice try pharma industry
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TheLastCzarnian (profile), 18 Oct 2012 @ 8:18pm

Re: Re: Re: Re:
I would like to take this time to mention that your are totally full of shit.
NO fixed R&D cost justifies $70k per treatment. (Note, as mentioned, that often the government is footing the bulk of the bill!)
Also, have you NOT noticed the massive profits the pharma's are making? They are not breaking even. They are not making a tidy profit. They are gouging people in need, because they know they can. Plain and simple.

And lying about it puts you squarely in their corner.
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k-h, 19 Oct 2012 @ 1:53am

Re: Re: Re: Re:
Most drug research is publicly funded. Most of the money big pharma spend is on marketing and litigation and what they do spend on developmnt is developing things that are patentable and extending patent way beyond their dates.

Look at the story of neem for an example.
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Philly Bob, 19 Oct 2012 @ 8:53am

Re: Re:
It's called weeding... only the rich can afford life-saving drugs while the poor just die off. We don't want those useless paupers sucking up all of our resources now do we??
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Anonymous Coward, 20 Oct 2012 @ 4:48am

If I owned a pharmaceutical company I wouldn't take any risk, I wouldn't invest lots of money to try to create new drugs. What is to prevent a third world country from taking that drug and giving it away to a generic manufacturer? Why would I as the owner of a company dump tens of millions of dollars into research, development, and testing, when the end result would be that a third world country would just take ownership of that drug?
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