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Medicine Government The Almighty Buck Science

Indian Gov't Uses Special Powers To Slash Cancer Drug Price By 97% 556

Posted by Soulskill
from the opening-a-can-of-worms dept.
suraj.sun sends this quote from the Times of India: "In a landmark decision that could set a precedent on how life-saving drugs under patents can be made affordable, the government has allowed a domestic company, Natco Pharma, to manufacture a copycat version of Bayer's patented anti-cancer drug, Nexavar, bringing down its price by 97%. In the first-ever case of compulsory licensing approval, the Indian Patent Office on Monday cleared the application of Hyderabad's Natco Pharma to sell generic drug Nexavar, used for renal and liver cancer, at Rs 8,880 (around $175) for a 120-capsule pack for a month's therapy. Bayer offers it for over Rs 2.8 lakh (roughly $5,500) per 120 capsules. The order provides hope for patients who cannot afford these drugs. The approval paves the way for the launch of Natco's drug in the market, a company official told TOI, adding that it will pay a 6% royalty on net sales every quarter to Bayer."
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Indian Gov't Uses Special Powers To Slash Cancer Drug Price By 97%

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  • by elrous0 (869638) * on Tuesday March 13, 2012 @02:22PM (#39341539)

    I know I'm going to burn karma for saying this (wouldn't be the first time), but do keep in mind that the R&D costs for developing these drugs is paid from the profits these companies make. Now, maybe governments themselves should be doing the development instead of for-profit companies, maybe the drug company profits are too high, and maybe Bayer were dicks to charge that much for a drug in a poor country. But if you're going to keep the system as-is, you had think long and hard before you just start ripping patents left-and-right. It may be politically popular, but you can't have your cake and eat it too.

    If you're going to say "X company doesn't get to patent its drugs" you need to come up with a replacement for the money that X company put into its research and development. If the government wants to serve its people this way, that's fine, but they also have an obligation to pony up the money for their own R&D program (and not one that just does knockoffs of existing drugs). Because without that profit motive from those patents, the drug companies sure aren't going to be developing anything new.

    • by Anonymous Coward on Tuesday March 13, 2012 @02:25PM (#39341589)

      1. Most drug company expenditure is on marketing;
      2. Most drug research is academic;
      3. They can settle for less profit;
      4. If they won't settle for less profit, someone else will be prepared to take their position in the market.

      Problems solved.

      • by cpu6502 (1960974) on Tuesday March 13, 2012 @02:38PM (#39341813)

        1. Advertising actually save money because it encourages more sales.
        2. Academic research is funded by drug companies and other corporations.
        3. They don't make that much profit. I don't see Bayer in the top 100.
        4. Doubtful. No company sells at a loss. Bayer would just avoid India completely, and not release their patented drugs until 10-20 years later (after they recover their initial R&D investment).

        • by Microlith (54737) on Tuesday March 13, 2012 @02:44PM (#39341893)

          1. Advertising actually save money because it encourages more sales.

          Thus, advertising gives you cancer. QED.

        • by Anonymous Coward on Tuesday March 13, 2012 @02:45PM (#39341907)

          1. Yes, because advertising for cancer drugs increases demand. In what universe?

          2. And at a pittance compared to government funding. Plus they demand tax cuts for doing it, so...net loss.

          3. Because that kind of comparison is valid, even if it were true.

          4. So let's see, Bayer is going to pursue profits from medicine by sitting on their hands instead of taking a lesser cut? At what price? The lives of human beings? You're not defending them, you're indicting them for gross indifference manslaughter. You've made them criminals.

          • by poity (465672) on Tuesday March 13, 2012 @03:25PM (#39342537)

            1. Yes, because advertising for cancer drugs increases demand. In what universe?

            isn't that an argument AGAINST the initial (implied) claim that Bayer spends more on ads than research? It doesn't seem like Bayer would spend money on ads over research when obviously as you've pointed out cancer treatment demand doesn't increase just due to more awareness. So that's more of a rebuttal to the GP anon than to cpu5602

            2. And at a pittance compared to government funding. Plus they demand tax cuts for doing it, so...net loss.

            which government would fund this, India? If the Indian government had funded the research in its totality, I wonder how it or the tax paying population would respond to another country taking the research without compensation. The solution then is a global fund, but who pays how much?

            As for points 3 and 4, it would seem that in a world where research is given away, the countries or companies which invest in their production capability will always win over those which invest their research capability. Just build your factories and wait for the other guys to publish the formulas.

        • by PraiseBob (1923958) on Tuesday March 13, 2012 @03:06PM (#39342249)
          3. They don't make that much profit. I don't see Bayer in the top 100.
          You must've missed Pfizer at 31, and Johnson & Johnson at 40. Those two make more than Target, Kraft Foods, Goldman Sachs, Morgan Stanley, Dow Chemical, and obviously most other companies on the planet.

          They can take a 97% decrease in price and still remain profitable? What other industry can possibly have that level of markup and keep customers? It is only possible because of patent restrictions, and a "captive market" where people die or have horrible illnesses when they don't take your product.
        • by rolfwind (528248)

          4. Doubtful. No company sells at a loss. Bayer would just avoid India completely, and not release their patented drugs until 10-20 years later (after they recover their initial R&D investment).

          Wouldn't India just smuggle the drug from a country that has it and reverse engineer it?

          I don't that strategy is viable.

        • by Miamicanes (730264) on Tuesday March 13, 2012 @03:32PM (#39342643)

          > Bayer would just avoid India completely, and not release their patented drugs until 10-20 years later

          To a large part, this tactic is why most countries grant compulsory licensing in at least some instances -- to make it impossible for a company to metaphorically "take its ball and go home". Most countries besides the US take the attitude, "If the IP owner isn't interested in selling it here, and won't allow anybody else to sell it here by granting them a license under reasonable terms, we aren't going to stand in the way of somebody else independently taking the initiative to do an end run around them, make it themselves and sell it here anyway." India just happens to be notorious (within the pharmaceutical industry) for doing it openly, loudly, and proudly when lifesaving drugs are priced out of reach for most Indians by rent-seeking drug companies.

          India is also somewhat unique in that it doesn't grant or recognize patents for "method of use" or "molecules", only manufacturing processes. So when finasteride was repurposed in lower-dose form as Propecia for baldness, it wasn't eligible for a new patent in India. That's why Propecia is patented and expensive in the US, but costs next to nothing when purchased from India. Likewise, when Indian companies came up with new ways to manufacture atomoxetine (the ingredient in Strattera), they were able to get their own patents and begin selling it, even though the original patent for Strattera was still in effect and valid in India. In the US, you can combine two old drugs in new doses into a new drug, and get it patented for another 17 years. In India, you'd be laughed at (unless you somehow came up with an innovative new manufacturing process that did something differently than just making the two original drugs by their original processes, mixing them together, and pressing them into tablets containing both).

        • You're missing a major contributor to academic research in point 2. 28% of funding for biomedical research comes from the US NIH [wikipedia.org]. The NIH only contributes to new drugs that have a material impact on the improvement of public health. I would easily believe that 72% of new drugs to market provide little additional benefit over preceding drugs and are mostly there to pad the pockets of Big Pharma. In order to pass the FDA they only need to show that they are as effective and no less safe.
          • by paiute (550198)

            You're missing a major contributor to academic research in point 2. 28% of funding for biomedical research comes from the US NIH [wikipedia.org]. The NIH only contributes to new drugs that have a material impact on the improvement of public health. I would easily believe that 72% of new drugs to market provide little additional benefit over preceding drugs and are mostly there to pad the pockets of Big Pharma. In order to pass the FDA they only need to show that they are as effective and no less safe.

            No. Drugs do not come out of academia. The goal of a scientist in academia is to publish papers. The goal of a scientist in pharma is to sell products. And you have a a gleefully optimistic view of how easy it is to get a drug past FDA hurdles an into the market.

        • by P-niiice (1703362) on Tuesday March 13, 2012 @04:21PM (#39343395)
          Since when does less profit = loss? Less profit (even a little less) and putting the money to good use elsewhere would be the cure for so many of our problems today, it's uncanny.
        • by guruevi (827432)

          1. Drugs shouldn't be advertised because it leads to consumerism of drugs which is a lot more dangerous to one's health.
          2. Academic research is largely funded by the government and individual donations. I work in the field and it's very rare to see drug companies funding any type of research
          3. Bayer's profit is in the billions and 2011 Q3 had it's profit doubled in the emerging market.
          4. There are a lot of drug companies out there and they would be glad to cannibalize Bayer's share in a large, growing marke

      • by unassimilatible (225662) on Tuesday March 13, 2012 @02:51PM (#39342011) Journal
        If they won't settle for less profit, someone else will be prepared to take their position in the market.

        Who is "they"? Spoken like a guy who doesn't own stocks. Scare investment capital from drug companies, and it won't go elsewhere in the market - it will go to Exxon and Apple! Buh-bye, private R&D!

        Government will never give out free gas and iPhones, so my investment dollars will go there.
      • by Anubis IV (1279820) on Tuesday March 13, 2012 @02:52PM (#39342027)

        1. Most drug company expenditure is on marketing

        Simple fix: Ban drug advertisements. That's the way it used to be and the way it should've stayed, since there is no valid reason why consumers should be the target of drug marketing when they shouldn't even have any say over their prescriptions.

        Bonus: No more hastily spoken disclaimers regarding dry mouth and constipation at the end of every other commercial.

        • Though I agree that drug advertising should not target consumers; I 100% disagree that consumers shouldn't have any say over their prescriptions. I shouldn't have to take it on blind faith that my doctor is going to give me the right drug. I should have the right to research it and know what the pros and cons of taking a medicine is.

          • by Alex Belits (437) *

            If you are capable of such research, you ARE a doctor.

            • by NormalVisual (565491) on Tuesday March 13, 2012 @03:29PM (#39342593)
              If you are capable of such research, you ARE a doctor.

              No, not really. You're assuming that the doctors are really researching every new thing the drug companies push on them, and that you have to have an M.D. to read and understand the available information. I recently had the doctor prescribe two rather expensive (and new) medications that also weren't covered under my insurance. I did a bit of research, found a couple of much less expensive alternatives, and spoke to him about it. He agreed that there likely would be no problem with the substitutions and wrote some new scripts, and after having been on the different meds for a little while, he says that the cheaper meds have done just as well as he would have expected the others to do. So, a little research by this non-M.D. is saving me a little over $250/month.
          • by Anubis IV (1279820) on Tuesday March 13, 2012 @03:27PM (#39342567)

            Doing your due diligence in researching drugs is fine. Asking questions of your doctor after doing your reading is fine. Realizing that you had neglected to mention a potentially important detail is extremely valuable. I don't want to discount any of those, because they are very good things. But consumers are not meant to have any say over their prescriptions, and by that I mean that the choice of what prescription you're walking out of the doctor's office with at the end of the day should still be the doctor's and not yours (obviously you should still have the right to refuse and the right to seek a second opinion, of course).

            Because of that, there's no good reason to be marketing to consumers, since the only thing you can be doing is indoctrinating an uninformed bunch of people who have no basis for understanding the complex interactions taking place and the results that might occur. For similar reasons, licensed engineers are barred from advertising in America by most of the major engineering associations. People have no basis for measuring the credibility of the claims being made, nor could they without years and years of training, so you'd be taking advantage of their cluelessness by addressing them directly.

      • by medcalf (68293)
        Sure, someone else will take teir position on drugs already invented. But who's going to invent the next drug? When the risk is billions of dollars, lawsuits, ruined reputations and dead or maimed people, and the reward is making money only until the drug is reverse engineered (maybe a couple of years), then who will take risks on anything but the safest bets? You see the good now (cheaper known drugs) but not the cost later (fewer new drugs).
      • Re: (Score:3, Insightful)

        by Artraze (600366)

        > Most drug company expenditure is on marketing;

        On the other hand, advertising, by definition, increases profits or it's a waste of money. Thus, advertising actually _decreases_ individual costs because they sell more units and can thus amortize the overhead costs (which are the primary costs) across more units.
        For example, suppose your overhead is $1000, which cores things like labs, employees, trials, and other failed drugs and the cost to manufacture is $1. If you only sell 100 units, you must charg

        • by Znork (31774)

          The advertisement argument would be sound except the customers in this case is a specific group of people who should be receiving it and who will consult experts to obtain your product and no more. Hopefully the advertising isn't what makes people sick, and while informing them on treatments may be commendable, if the ailment is not severe enough to seek help then that money (socialized or privatized insurance) should be spent on people in enough need to seek help without prompting.

          Further, mass production

      • by Anonymous Coward on Tuesday March 13, 2012 @03:03PM (#39342199)

        1.) Most R&D medicine is taken by volunteers who don't get paid for being part of the clinical trials.

        2.) Most of the scientists and others conducting the clinical trials don't get paid

        3.) The government pays for a ton of R&D and contributes a lot to R&D.

        4.) Pharmaceutical corporations don't get independently audited to ensure that their government established monopoly prices are justified.

        5.) Advancements in medicine will occur, and have occurred, perfectly fine without patents. There is absolutely no evidence, whatsoever, that patents facilitate drug advancements. Most of the evidence suggests otherwise.

        http://levine.sscnet.ucla.edu/general/intellectual/against.htm

        the pharmaceutical cartel gets all the free work of others and it gets to charge monopoly prices for it and keep the profits to itself.

        • by superwiz (655733)

          Most R&D medicine is taken by volunteers who don't get paid for being part of the clinical trials.

          But the doctors conducting the trials are not volunteers. Not are the companies producing medical and chemical equipment they use. Nor are the labs doing their tests. Nor are the lawyers filling paperwork by the pound that is related to regulatory approval.

          Most of the scientists and others conducting the clinical trials don't get paid

          Outrageous lie.

          The government pays for a ton of R&D and contributes a lot to R&D.

          Roughly 5% (6-7billion out of the 300-400 billion market), but ok, "tons".

          Pharmaceutical corporations don't get independently audited to ensure that their government established monopoly prices are justified.

          They are justified by the virtue of the fact that they ask for them. In exactly the same way that the gas stations are justified in charging the price for gas th

          • > And if demand that government makes the cookie maker work for the price other than the one they name,
            > then you, sir, are advocating slavery.

            You're conflating 'theft' with 'infringement'.

            If India's government forced Bayer to manufacture the drugs and sell them at a specific cost, you could argue that they're being robbed, if not metaphorically enslaved (particularly if they're forced to sell them below cost). However, in this case, what India's government is doing is allowing somebody ELSE to make t

    • by sohmc (595388)

      Or even worse, they won't bring the drug to unfriendly markets, making it so that only the people who can afford to go out of the country to receive treatment.

      It's not bad karma. It's bad business.

      • by sjames (1099) on Tuesday March 13, 2012 @02:42PM (#39341871) Homepage

        If they choose not to market a drug in India at all, I guess the government will save a lot of deliberation when they approve a local company to make the generic. It's not like they can't figure out how it's being made.

    • Re: (Score:3, Funny)

      by zlives (2009072)
      I wonder: On the opposite side, if the drug companies no longer develop new treatments; would a non profit based entity (govt, charity) do the work? and if they would then perhaps that is whats best for humanity?
    • Just like Apple needs patents on rounded corners for smartphones, or it will never be able to recoup all the money it put into market research? Aspirin still sells like hotcakes, and I'm pretty sure the patents on it expired long ago.

      Patents cause industry to stagnate, aren't necessary for innovation, and get people killed. They are a great way to enrich huge corporations, though, who can keep out competition of every sort by having the cash to keep the FDA in their pocket.
    • I believe a big portion of the expense, at least in the US, isn't so much the R&D as the time it takes to get something to market. Some drugs take decades of trials and government approval after the initial R&D just to prove it's safe. Having to wait this long to market a product is a major factor in driving the cost up. There's a large time lag between the initial investment and when you see any profit from it, so the profit needs to be fairly considerable to make it worth developing in the first p

    • by langelgjm (860756) on Tuesday March 13, 2012 @02:34PM (#39341733) Journal

      That argument does not work in this situation. Bayer had priced the drug so high in India that it was clear they had no interest in serving the Indian market. I'm on a listserv for this type of information, and someone close to the issue noted that "Last year Bayer sold 493 boxes of 120 tabs of Sorafenib in India. That was enough for about 49 people, in a country with a population of 1,210,193,422."

      Any money Bayer was making in India off this drug was a rounding error compared to the lucrative North American and European markets. Furthermore, Bayer argued to the Indian court that the Indian population did have access to the drug through an infringing version produced by Cipla, while at the same time Bayer was suing Cipla for patent infringement, trying to get their product off the market.

      Given the 6% royalty rate that NATCO has to pay to Bayer, I wouldn't be suprised if Bayer ends up making more money with the compulsory license than before.

      • by b0bby (201198)

        Given the 6% royalty rate that NATCO has to pay to Bayer, I wouldn't be suprised if Bayer ends up making more money with the compulsory license than before.

        But as you said before, they have no interest in the Indian market. What they're scared of is these cheap Indian drugs leaking out to their lucrative North American and European markets. That's where this is likely to hurt their bottom line.

    • by tonywong (96839) on Tuesday March 13, 2012 @02:38PM (#39341807) Homepage
      If you read the article it does give the circumstances of the ruling. I would be inclined to agree with you on principle, but from the article:

      Economist and intellectual property expert James Love said, "The Bayer price of Rs 34,11,898 per year ($69,000) is more than 41 times the projected average per capita income for India in 2012, shattering any measure of affordability. Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details of its actual outlays on the research for Sorafenib, a cancer drug that was partly subsidized by the US Orphan Drug tax credit, and jointly developed with Onyx Pharmaceuticals. Bayer has made billions from Sorafenib, and made little effort to sell the product in India where its price is far beyond the means of all but a few persons."

      This is in direct contravention to the WTO TRIPS agreement:

      Under Section 84, a compulsory licence to manufacture a drug can be issued after three years of the grant of patent on the product, which is not available at an affordable price. Under the World Trade Organisation TRIPS Agreement, compulsory licences are legally-recognized means to overcome barriers in accessing affordable medicines. This is the first time in the history of the Indian Patents Act, 1970, that the provision under Section 84 has been invoked.
    • by EvilBudMan (588716) on Tuesday March 13, 2012 @03:07PM (#39342267) Journal

      Did you see the numbers? It's almost $50 a pill. Some drug company has now patented a propellant for asthma medicine. Since you can't use the old inhalers because of environmental concerns, if you want asthma medicine that used to be off patent is now back on. The patent office is screwed up entirely. Bayer may have lots of research tied up in this but many companies are mere patent trolls.

    • by nbritton (823086)

      The number of diseases out there is, relatively, finite. So assuming a drug can provide complete system control with little to no side effects, why do we have to keep on inventing new drugs for that disease?

      Their are plenty of drugs out there that worked great, but got dumped because their patent expired. To be replaced by the "Next Big Thing", that is covered by patents, because the company sabotaged the old drug.

      Worse yet is the complete lack of incentive for drug companies to find cures. While they obvio

  • by OldGunner (2576825) on Tuesday March 13, 2012 @02:28PM (#39341627)
    The issue with compulsory licensing would get very muddy if Natco Pharma is allowed to export the medication outside of India's borders.
    • Yes, it's for domestic use only. It also has to manufactured domestically, which is why this type of agreement doesn't work in smaller countries without adequate manufacturing capacity for pharmaceutical products (e.g., most of Africa).
  • by ruebarb (114845) <colorache@hot m a i l.com> on Tuesday March 13, 2012 @02:33PM (#39341709)

    average life expectancy according to an article on the BBC is extended by only 3 months -

    http://news.bbc.co.uk/2/hi/health/8367614.stm [bbc.co.uk]

    with results like that, you have to overcharge like hell to get your money cause the patients will only be around three more months than usual if they weren't taking the drug -

    but if you're desperate and dying anyways, why not blow 2 months salary on a 120 day supply, right? And yet, I have no sympathy for the drug companies - I wonder why....could it be their way of using lawsuits to keep generics off the market for a few extra years while they re-release a "timed" version of their product?

    Drug companies are vultures - and I'd love to see more university/public funding of this research for the public interest and less for the profit motive - especially when lives are at stake

    • Re: (Score:3, Informative)

      by Anonymous Coward

      Wow, so they make you pay almost 6 grand for a 3 month supply of a pill that can't actually keep you alive long enough to take all 120?

  • by Maximum Prophet (716608) on Tuesday March 13, 2012 @02:49PM (#39341979)
    Any decent chem lab can reproduce almost any drug given the patents and FDA approval documents. (Some drugs are difficult or perishable) People are responding that the big pharm companies will leave these markets, but if they do, it's unrelated to this.

    R&D are sunk costs. *Any* sales over your fixed production costs results in profit. If you want to maximize profit, you sell.

    What this might do, is limit the number of new drugs in the pipeline, but even that isn't a given. It's possible that (most) every good idea is being worked on, and all the great scientists are working on them. Once you've reached idea saturation, more money in a system just increases profits to the shareholders.

    Wait, wait, I hear people yelling. If there's more money given to the shareholders, then they will invest in venture startups, and many more great new drugs will be discovered. Maybe. It's also possible that too much money in the drug company ecology will just lead to more viagra clones if not "snake oil" type products. More money might lead to more advertising, causing people to misuse drugs they don't really need.
  • by bmajik (96670) <matt@mattevans.org> on Tuesday March 13, 2012 @02:52PM (#39342025) Homepage Journal

    ...that can only be cured by the heavenly touch of Natalie Portman's hand upon my forehead.

    Without this treatment, I fade in and out of conciousness, slowly losing body weight, muscle mass, and organ function. I have only 6 months to live if I do not get the treatment I need.

    I've asked Mrs. Portman many times if there is a way she could lay her hand upon my forehead for the prescribed 8hr sessions 3 times a week. I've offered her all of my money. I've sold my home and my surviving family members have taken up disreputable work.

    Alas, she refuses to lower her price, she has told me that she will not help me even if I pay her 1 million dollars per week!

    I emplore you, caring people of the modern world. Please won't you save me?

    I desperately need Natalie Portman's healing hand to save my life. But I cannot afford the outrageous prices she is demanding.

    Can't someone do something?

    • by Nidi62 (1525137)
      Maybe you can get the government to allow the production of the generic cure for your disease. However, you may not want that as I am told the generic is actually Snooki.
  • by dragisha (788) <dragisha.m3w@org> on Tuesday March 13, 2012 @04:03PM (#39343129)

    http://www.usatoday.com/news/world/2008-09-17-brazil-AIDS_N.htm [usatoday.com]

    It is logical thing for governments to do. At least as long as they have enough sovereignity for such action. Think World Government here...

  • by gtirloni (1531285) on Tuesday March 13, 2012 @04:23PM (#39343429)
    This has happened in Brazil (not specifically to this drug) and it works just fine.

    The pharma companies that were crying out the end of the world are all here, still making a profit, everything is fine.

    I really doubt $5500 is the correct price for that drug in India. Whoever decided to charge that much should go to jail.

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