Bayer's CEO: We Develop Drugs For Rich Westerners, Not Poor Indians
from the refreshingly-honest dept
We've covered the continuing efforts of emerging economies to provide key medicines for their populations at affordable prices. To do that, they often invoke their right to use compulsory licensing to bring down costs. For understandable reasons, the big pharma companies aren't happy with that approach, but usually dress it up as a concern about the supposed threat to "innovation" that it represents -- their claim being high prices are needed to fund expensive research. But as Techdirt has noted, pharma's estimates of expenditure here tend to be hugely inflated, which rather undercuts that argument.
One of the companies that has been affected by compulsory licensing moves in India is Bayer. Here's what its CEO said on the subject according to a report in Bloomberg Businessweek:
Bayer Chief Executive Officer Marijn Dekkers called the compulsory license "essentially theft."
That's a refreshingly honest admission that rather than wanting to save lives around the world, what Bayer is interested in is maximizing its profits by selling expensive drugs to "western patients who can afford it," and that those who can't pay can just, well, drop dead -- which, of course, is precisely what many of them will do without Bayer's drugs.
"We did not develop this medicine for Indians," Dekkers said Dec. 3. "We developed it for western patients who can afford it."
Some might say that's a perfectly reasonable position -- after all, Bayer and the other pharmaceutical companies are for-profit concerns. But they weren't always so dismissive of humanitarian concerns. Here's what George Merck, who became president of his father's eponymous chemical manufacturing company in 1929, said on the subject, as quoted on the Today in Science History site:
We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.
Bayer's CEO obviously disagrees.
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Filed Under: drugs, india, marijn dekkers, pharmaceuticals, poor, rich
Companies: bayer, merck
Reader Comments
The First Word
“Why does he care then?
If they didn't develop it for Indians, and only rich westerners were supposed to be their target consumer, then why should they give a rat's ass if Indians are producing their own and selling it for 97% cheaper (from the article)?I suspect they're really afraid that the world will begin to see what's really going on here, and other countries will follow India's lead.
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Want to see something more offensive: try the new safety wrapping from Vicks' Nyquil: We don't make generic brands.
What an arrogant, bullshit thing to put on a product. "We value profits over health" is exactly what the message says.
Pharmacy is part of the reason healthcare is so expensive.
But as long as there are Congress members with stock in these companies, things will never change.
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I'm not sure what you find objectionable about that. It's a widely-held but almost entirely inaccurate belief that generic drugs are made by the same companies as name brands - the only difference being labeling. They're just saying that, in this case, it's not true.
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Im just thinking if it can be a solution on cost terms.
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Im just thinking if it can be a solution on cost terms.
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No targeted demography? Good, no expected profits lost then. And since they don't plan to make those medicines, they can give them up for free for those who will.
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Why does he care then?
I suspect they're really afraid that the world will begin to see what's really going on here, and other countries will follow India's lead.
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Re: Why does he care then?
This would be especially painful if they those affluent Westerners his company claims to be targeting start buying these generics.
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When that is said, some prices in the west are starting to become artificially ultra-limited supply. In that way the prices can be set high enough to cover the cost of burning the overproduced stash and then some. Not even going into the complete madness of medicine pricing in socialized healthcare. Certain newer drugs are indefensibly expensive. Maybe the west should follow the example of India and set own compulsary licenses! The only other real alternative to deal with this problem is a complete dismantling of the patent system, but that is unrealistic.
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Certainly in the UK, the evaluation agency NICE looks closely at cost/benefit ratios, and just will not fund any drug seen as too expensive. That in turn means that companies wanting to supply the NHS have to be more realistic in their pricing. On the other hand, the US seems to be more of a free-for-all rush-to-the-trough for pharma companies.
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It is disappointing to see the constant vilification of long standing pharmaceutical companies as somehow the devil incarnate. There is nothing wrong with earning a profit. Nor is there anything wrong with differential pricing that depends upon market conditions in individual countries. For all those who rail "But people will die", it cannot be dismissed that the newer formulations are almost always not the only ones available in-country to treat a specific medical condition. Additionally, the entry into many foreign markets are conditioned upon the exporter creating domestic financial opportunities for a country's citizens. The construction of manufacturing facilities for any number of products is not at all an unusual mandate. The same can be said requiring the infusion of money to support domestic R&D. Companies is many, many industries do this all the time just to try and gain a foothold.
The comment by Bayer's rep was not particularly wise, but there is a measure of truth that Bayer does not devote significant resources over the course of many years to create a product, only to turn over all relevant information about that product to a third party so that the third party will immediately be established as a coat-tail-riding competitor having expended virtually no company resources other than modify its manufacturing facilities and processes, as necessary, to begin cranking out the product.
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Re: Re: Why does he care then?
Indeed. But there is a great deal wrong with prioritizing profits over human lives. Pharmaceutical companies are hardly the only ones vilified for doing this. I believe that it's an entirely criticism.
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What people here seem to rail about is "they are trying to financially rape people who cannot afford life saving medications". Is this really true? Who is going to enter into a market if potential users of a product will be unable to buy it?
This issue, associated in this instance with India, is about the perception that an unfair competitive advantage is being provided to domestic industry by government fiat. In addition, once the domestic industry has the means at hand to manufacture and distribute a medication, exports follow almost immediately.
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That's a problem. It's also a great argument for nationalizing the development of medications instead of leaving it in the hands of for-profit companies.
After all, one of the good things that governments do is those things that are both essential and that won't be properly done by private industry because of the lack of profit potential. Pharmaceuticals sound like they might fall into this category.
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Why is that?
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Ha - douche bag terminology
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Except, if you look at the actual history of the pharmaceutical industry, you would know that it came out of the chemicals & dyes industries, which had nearly all of its major breakthroughs in Switzerland and Germany during periods of time when those countries did not allow patents on chemicals -- and yet the industry and innovation thrived in both countries.
So, yeah, there's plenty of evidence that you get a very dynamic and innovative industry without patents when all you're doing is mixing a bunch of chemicals together.
You should learn some history.
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The problem in allowing copying is tied to the regulatory regime of several separate organs where each chemical compound has to be screened for safety, health, environmental and in case of consumables dosis-response before it is allowed to be sold in specific markets. These requirements are very expensive and time-consuming. Since the first to bring a product to market is stuck with this bill, there would be very little incentive to be first on the market since you are unlikely to be able to ever recover these costs.
Compulsary licensing is a strong mechanism for forcing medicine prices down and if it is long enough and high enough it is still very profitable to be an inventor. But it doesn't solve any other problems of patents like cost-benefit for rare ailments, market separations by regulations and enforcement costs.
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Patents make more sense for the production process than the composition anyway. To give some return of investment, one could simply make clinical trials count only for the company producing the respective medication specimens. So there would be a financial threshold for competitors, and delayed time to market.
Also independent corroborration from a third party with different financial incentives. Could have caused thalidomide to get pulled from the general market earlier.
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Yes, because it was an era of low hanging fruit and cheap development. We aren't in the same place now, where many bacteria are drug resistant, where there is extensive testing and insane levels of liability attached with each new release.
You sort of forget that not only has the date changed, but reality has changed as well.
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Re: Re: [Mostly publicly funded R&D anyway]
The largest expense is, wait for it, marketing. Someone has to pay for all those television and magazine ads that push drugs you (as a non-doctor) can't actually prescribe for yourself. That and all the encouragement (a.k.a. kickbacks, bribes, free dinners and retreats, and my favorite lobbying).
The longer a patent lasts, and the easier it is to restrict others (including generic manufactures) the less likely we are to see new and innovative drugs developed. Get a patent, cash in, tweak that patent, cash in, country doesn't let you extend the patent on an existing drug by cosmetically tweaking it, sue that Country.
If you look at history, countries with weak/non-existent patents on drugs created the most innovative treatments. Patents discourage innovation and encourage rent seeking.
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"Cholesterol at 140? Gasp! You need to take this pill every day for the next 50 years!"
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Seriously, they produce drugs and are going out of their way to price it out of the hands of a majority of the people on the planet. Do they understand the concept of if you let all of the people your drug could have saved die off your actively killing your total market?
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Did you even get the point? They don't want a market in India. An Indian life is too cheap to save, setting a bad example.
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And if they offered the drug at a reasonable price they would have a huge market, rather than the Indian Government feeling forced to allow production via legal loopholes.
I can sell this to a handful of rich westerners and make X.
I can sell this drug internationally at a lower price and end up making multiples of X, but I can't let everyone know I sell it cheaper elsewhere or they'll all want it cheap... even thought I'd still make huge amounts of cash.
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The original Mona Lisa is worth something. Copies of it are just that, copies, which are cheaper by the dozen.
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Yup - why sell a cure when you make more off treating the symptom. This is douche bag corptocrasy 101
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Greed seems to the cause to and the solution to the world's problems in the same way alcohol is.
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_______________________________________________________________________________________________ _______________________________________________________________RANTY RANT!
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All asprins alike
What I was searching for was a lawsuit about Bayer Aspirin marketing back in the 1970's.
Anyone remember those TV commercials suggesting that Bayer Aspirin was somehow better than generic aspirin? They had a commercial with various myths proven untrue such as:
* (picture of Wright Bros trying to fly) . . . If man were meant to fly, he's have wings!
* (man saying...) All aspirins alike
Then the commercial goes on to explain that all aspirins are not alike. Even though each tablet is the same exact active ingredient, somehow Bayer aspirin has magical qualities not found in generics.
Of course, after a lawsuit, it was found that generic aspirins were just as good and Bayer had to stop saying this. My sixth grade teacher said: they lied.
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And sometimes it's true. Two commercial preparations of a drug, with the same amount of the same active ingredient, may have different effects or effectiveness. For example, what binders are used and how quickly and completely the drug is absorbed. Or in the case of aspirin, coated or uncoated, buffered or not, etc. I know several people who have had bad reactions to ostensibly-identical generic versions of drugs.
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"Buffered," by the way, just means that an antacid is included in the formulation.
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I'd say (with my completely uneducated common sense) that if you are switching from a name-brand to a generic you should be mindful (and have your doctor evaluate it with you) that you could be changing your effective dose.
/disclaimer: faulty memory, cant find the article; IANAD. etc etc.
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That's right. I even acknowledged this in my comment. :)
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Ok, I call bullshit. Please explain how you can possibly absorb over 100% of an included ingredient? What do they include some magic fairy dust that makes replicate itself in a person's stomach? Or do they happen to have a special priest that blesses it so that it and makes it do Jesus's famous loaves and fishes trick?
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What it does affect is dosage (strength and frequency). The law requires generic versions of medications to be functionally equivalent, including having similar absorption rates, but they can vary -- not only between different manufacturers, but also between different production runs from the same manufacturer.
In practice, none of this matters the vast majority of the time. Most drugs do not require an incredibly precise dosing schedule, so any variations are meaningless. The ones that do require something exact require doctor's supervision and regular testing for drug levels anyway, so the dose can be adjusted as needed.
That brings up yet another aspect of this dosing thing: even if every pill is precisely identical, rates of absorption and abosorbed does will vary anyway -- it's affected by your stress level, diet, exercise, and all kinds of other things that have nothing to do with the pill itself.
So, in my view, this entire topic is a red herring when talking about generics vs name-brand.
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I agree completely with this except that it's relevant because those doing the comparison studies that claim the name brands work better are often funded by the pharmaceutical companies that will then quote those studies to claim that the generics aren't as good.
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It was found not to be any better after a court battle.
I do understand the issue that some people can have issues with inactive ingredients. I am more skeptical that inactive ingredients would be chosen that have an effect on the efficacy of the medication.
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The commercials I remember very strongly. I also remember the classroom discussion fairly well. I do not know any specifics beyond that Bayer had to stop the ads, and the public now knew that all aspirin was alike.
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It continues to this very day. Remember the business about aspirin helping to prevent heart attacks? Bayer went apeshit about that and advertised it heavily -- in the process, basically lying. The effect is true, but the does required to see the effect is absolutely miniscule. As one of the researchers commented at the time, you could lick a baby aspirin once a day and get the full preventative effect.
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He sees governments prioritizing sick patients over profits, and it scares the living dickens out of him.
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These Big Pharma Corps should have to abide by the same Hippocratic Oath that Physicians do world wide.
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If they would rather die, then they'd better hurry up and do it and decrease the surplus population.
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Indian is a side show... look to South Africa
sample:
http://www.forbes.com/sites/edsilverman/2014/01/18/as-pharma-eyes-patent-changes-i n-south-africa-a-government-minister-cries-genocide/
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Hey, Bayer
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For rich westerners...
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So then it shouldn't matter to you what the Indians do with it.
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And this is supposed to be considered a reasonable view of what copyright/IP law should be like. What a joke.
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-Tom Perkins
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Good going
1. The dollar to rupee conversion will put the product out of reach of most Indians
2. Most Indians don't have a health insurance like in the US, so the money has to come from their pockets
3. These American companies are free to sell their product in India and since the generic companies have to pay them a part of the price, they can easily undercut them. Not doing so is only artificially inflating the price while people die daily
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This Article is Idiotic
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And if price is a major factor in preventing people from getting the help they need then yes, it would be reduced. Same if food was suddenly jacked up to ridiculous prices.
You're a tool.
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Re: This Article is Idiotic
a. The Indian companies do have to pay these companies a part of the price, so this would actually help the company to recoup its initial investment
b. The Bayer CEO has clearly said that the drugs are not for Indians. If they do not sell their product in India and have no plans to do so, how would a different company selling it in India hurt them financially or prevent them from creating new drugs?
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Epipen is one clear case, the device itself was made in its entirety by the USA government
http://usuncut.com/class-war/epipen-taxpayer-money/
But Mylan got a monopoly in the US, thanks to the senator Joe Manchin and his daughter Heather Bresch corruption
http://freebeacon.com/issues/government-funds-mylan-spiked-sen-manchins-daughter-became-ce o
http://abcnews.go.com/WNT/YourMoney/story?id=129651
http://www.citizen.org/publications/publicationr edirect.cfm?ID=7065
The irony of this form of capitalism is that it relies on socialism to be profitable.
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