Indian Govt uses special powers to slash cancer drug price by 97%

MUMBAI: 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 licencing 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 capsule. The order provides hope for patients who cannot afford these drugs.

I don't see something like this ever happening but one can hope.

http://timesofindia.indiatimes.com/i...

This will only drive up prices in the United States. If the world market collapses because of governmental action like this case, even more money will be charged in countries that respect intellectual property or R&D will cease.

Greg wrote:

This will only drive up prices in the United States. If the world market collapses because of governmental action like this case, even more money will be charged in countries that respect intellectual property or R&D will cease.

i agree, which is why I support nationalizing pharmaceutical research.

This isn't the first time I have seen something like this:

Brazil

Brazil did this, researchers said, largely by pursuing controversial policies that prompted pharmaceutical companies with exclusive drugs to lower their prices dramatically and generic companies to develop lower-cost alternatives for use in emerging markets.

"Brazil has proved it is possible to treat people with AIDS in developing countries," said lead author Amy Nunn, assistant professor of medicine (research) at The Warren Alpert Medical School of Brown University. She added that the country saved more than $1 billion as a result of bargaining with multinational pharmaceutical companies, resulting in significant changes in global AIDS policy.


China and India

These generic drug companies say they are on the verge of selling cheaper copies of such huge sellers as Herceptin for breast cancer, Avastin for colon cancer, Rituxan for non-Hodgkin’s lymphoma and Enbrel for rheumatoid arthritis. Their entry into the market in the next year — made possible by hundreds of millions of dollars invested in biotechnology plants — could not only transform the care of patients in much of the world but also ignite a counterattack by major pharmaceutical companies and diplomats from richer countries.

Already, the Obama administration has been trying to stop an effort by poorer nations to strike a new international bargain that would allow them to get around patent rights and import cheaper Indian and Chinese knock-off drugs for cancer and other diseases, as they did to fight AIDS. The debate turns on whether diseases like cancer can be characterized as emergencies, or “epidemics.”

It is an interesting issue... The mostly US based pharm companies spent a lot in R&D and expect a lot back. The 2nd and 3rd world companies see nothing to lose by taking the research from these companies by hook or crook (or by government). They claim that it is for the best and the pham companies claim that they will go out of business if they can't make their numbers.

Oncologics are a special area of hell for cancer sufferers. The companies cry about R&D costs and use that to justify the INSANE margins they make on these drugs.

There are certain types of cancer where your survivability it directly link to your ability to pay for the best meds.

Irongut wrote:

The story seemed to read to me like this:

Indian government honors the patent for 3 years per their law. (I can only guess that many people have died in the meantime that cannot afford the set price.) They attempt to negotiate with pharmaceutical giant a price that Indian citizens can afford. This goes nowhere. They allow another Indian company to manufacture the medicine, selling it at a more affordable price and guaranteeing a 7% royalty back to Bayer on each sale.

In essence, isn't Bayer getting money they would not have received otherwise by pricing themselves out of the market. Sure its not their price, but its an interesting situation none-the-less.

It sounds like Indian law allows for this and well, it actually seems like something being done for the good of a suffering portion of their people. It's seems hard to call it outright theft of IP as they waited the 3 years and.. they are paying a fixed royalty. I think our medical / insurance system is so out of whack these days that I can't help but like the idea of sick people getting the medicine they need at a price that is more affordable.

Then again, I know there is more to it than I understand I guess.

I bolded the interesting part of your statement. I do not disagree with anything you state, but who is right depends on who you ask. If the government removes the right from Bayer to set their own price on these medicines, then they are taking from the company. The government is forcing the companies to negotiate or else the government will empower another company to make the product and the government will set the royalty payment.

Frankly, I do not blame the countries from doing it. It can be a slippery slope argument as to which drugs need to be treated this way.

And, as it was mentioned before, the US (and its screwed up health care system) will be used to make up "lost profits".

The story seemed to read to me like this:

Indian government honors the patent for 3 years per their law. (I can only guess that many people have died in the meantime that cannot afford the set price.) They attempt to negotiate with pharmaceutical giant a price that Indian citizens can afford. This goes nowhere. They allow another Indian company to manufacture the medicine, selling it at a more affordable price and guaranteeing a 7% royalty back to Bayer on each sale.

In essence, isn't Bayer getting money they would not have received otherwise by pricing themselves out of the market. Sure its not their price, but its an interesting situation none-the-less.

It sounds like Indian law allows for this and well, it actually seems like something being done for the good of a suffering portion of their people. It's seems hard to call it outright theft of IP as they waited the 3 years and.. they are paying a fixed royalty. I think our medical / insurance system is so out of whack these days that I can't help but like the idea of sick people getting the medicine they need at a price that is more affordable.

There are way more implications to this, but I guess I wish it were just about sick people getting the medicine they needed to get healthier.

Ego Man wrote:
Irongut wrote:

The story seemed to read to me like this:

Indian government honors the patent for 3 years per their law. (I can only guess that many people have died in the meantime that cannot afford the set price.) They attempt to negotiate with pharmaceutical giant a price that Indian citizens can afford. This goes nowhere. They allow another Indian company to manufacture the medicine, selling it at a more affordable price and guaranteeing a 7% royalty back to Bayer on each sale.

In essence, isn't Bayer getting money they would not have received otherwise by pricing themselves out of the market. Sure its not their price, but its an interesting situation none-the-less.

It sounds like Indian law allows for this and well, it actually seems like something being done for the good of a suffering portion of their people. It's seems hard to call it outright theft of IP as they waited the 3 years and.. they are paying a fixed royalty. I think our medical / insurance system is so out of whack these days that I can't help but like the idea of sick people getting the medicine they need at a price that is more affordable.

Then again, I know there is more to it than I understand I guess.

I do not disagree with anything you state, but who is right depends on who you ask. If the government removes the right from Bayer to set their own price on these medicines, then they are taking from the company.

Isn't the government only taking back what it gave to Bayer in the first place, the 'right' to a temporary monopoly? Isn't it, in this case, a slightly more 'free' market that is going to reduce the amount Bayer can charge?

absurddoctor wrote:
Ego Man wrote:
Irongut wrote:

The story seemed to read to me like this:

Indian government honors the patent for 3 years per their law. (I can only guess that many people have died in the meantime that cannot afford the set price.) They attempt to negotiate with pharmaceutical giant a price that Indian citizens can afford. This goes nowhere. They allow another Indian company to manufacture the medicine, selling it at a more affordable price and guaranteeing a 7% royalty back to Bayer on each sale.

In essence, isn't Bayer getting money they would not have received otherwise by pricing themselves out of the market. Sure its not their price, but its an interesting situation none-the-less.

It sounds like Indian law allows for this and well, it actually seems like something being done for the good of a suffering portion of their people. It's seems hard to call it outright theft of IP as they waited the 3 years and.. they are paying a fixed royalty. I think our medical / insurance system is so out of whack these days that I can't help but like the idea of sick people getting the medicine they need at a price that is more affordable.

Then again, I know there is more to it than I understand I guess.

I do not disagree with anything you state, but who is right depends on who you ask. If the government removes the right from Bayer to set their own price on these medicines, then they are taking from the company.

Isn't the government only taking back what it gave to Bayer in the first place, the 'right' to a temporary monopoly? Isn't it, in this case, a slightly more 'free' market that is going to reduce the amount Bayer can charge?

Yeah, but it doesn't do this with any other type of drugs. And I am not sure how they handle other types of IP In other words, if they see a "National Emergency" will they selectively strip the IP rights from those products as well?

I also don't see this as a way to a freer market since the gov't is taking the ability to produce the drug from one company and giving it to another (local) company.

Ego Man:

IPs and patents are monopoly rights. They are explicitly so in the first documents that talk about them way back when. Obviously, removing monopoly rights from one company allows for a freer market.

Bayer in this case isn't really concerned about Indian patients. They can live or die as far as Bayer is concerned. Their inability to pay money means that they're neutral at best. Where the sh*t hits the fan is when local Indian companies make the stuff cheaper, and the cheaper stuff erodes Bayer's monopoly rights and large profit margins in more wealthy nations like the US. That's the situation in which it becomes profitable for Bayer to prevent other companies from making life saving drugs for dying people.

Temozolomide costs about $4,000 for a 30-day supply. If I didn't have health insurance, I'd be homeless.

Just putting that out there.

Ego Man wrote:

I also don't see this as a way to a freer market since the gov't is taking the ability to produce the drug from one company and giving it to another (local) company.

The headline would be much more accurate if it read "Indian government colludes with U.S. government to increase price of cancer drugs by nearly 100 times, denying treatment to millions of Indians" and then "Indian government grants crony corporation special legal immunity to increase profits". It should be obvious that the price would be within reach of ordinary Indians if the government simply stopped enforcing the monopoly rights it granted to Bayer. It's nothing more than the classic Mafia market takeover model: threaten everyone with attack or theft if they participate in the market, then grant an exemption to your buddy. Instant obscenely profitable monopoly.

LobsterMobster wrote:

Temozolomide costs about $4,000 for a 30-day supply. If I didn't have health insurance, I'd be homeless.

Just putting that out there.

Government-enforced monopolies are very expensive for the people who live under them. With competition suppressed by patents and the high barrier to entry provided by the FDA, such prices are not at all surprising - and are even beyond the capacity of most health insurance plans as well.

This is relevant.

(PDF warning, very heady economic text.)

LobsterMobster wrote:

Temozolomide costs about $4,000 for a 30-day supply. If I didn't have health insurance, I'd be homeless.

Just putting that out there.

sh*t, I thought my $1600/month medication was expensive.

Seth wrote:
Greg wrote:

This will only drive up prices in the United States. If the world market collapses because of governmental action like this case, even more money will be charged in countries that respect intellectual property or R&D will cease.

i agree, which is why I support nationalizing pharmaceutical research.

May not be a bad idea, but I would like to see regulated utilities first.

Aetius wrote:

Government-enforced monopolies are very expensive for the people who live under them. With competition suppressed by patents and the high barrier to entry provided by the FDA, such prices are not at all surprising - and are even beyond the capacity of most health insurance plans as well.

Without the patents to protect potential profits why would a drug company invest hundreds of millions of dollars to bring a drug to market? Would Lobster rather Temozolomide not exist at all?

Greg wrote:
Seth wrote:
Greg wrote:

This will only drive up prices in the United States. If the world market collapses because of governmental action like this case, even more money will be charged in countries that respect intellectual property or R&D will cease.

i agree, which is why I support nationalizing pharmaceutical research.

May not be a bad idea, but I would like to see regulated utilities first.

Utilities are hugely regulated. Do you mean more regulated than they already are, or a new definition of the term 'utility'?

LeapingGnome wrote:
Aetius wrote:

Government-enforced monopolies are very expensive for the people who live under them. With competition suppressed by patents and the high barrier to entry provided by the FDA, such prices are not at all surprising - and are even beyond the capacity of most health insurance plans as well.

Without the patents to protect potential profits why would a drug company invest hundreds of millions of dollars to bring a drug to market? Would Lobster rather Temozolomide not exist at all?

The answer to this question lies in the second half of aetius' prepositional phrase, bolded above. That is, without the extraordinarily onerous and costly fights and regulations that a drug-maker has to fight through to get a drug to market, the need for exorbitant prices disappears. It can take 10-15 years and more than a billion dollars to bring a single drug to market -- and for every one that makes it, 99 were left on the floor in various stages of unrecouped investment.

There are, of course, some advantages to a highly-regulatory system, but the question no one seems to be willing to ask is if those benefits outweigh the harms -- the harm of taking 15 years to bring a life-saving drug to market, of having to price it stratospherically high, etc.

If you truly want to know how a pharmaceutical system can run without patents, I highly recommend you take 30 minutes or so to read the PDF I posted above. It's but one chapter of a whole economics book, but it's very enlightening on the subject.

Ego Man wrote:

I also don't see this as a way to a freer market since the gov't is taking the ability to produce the drug from one company and giving it to another (local) company.

They haven't taken away the ability to produce the drug from Bayer though. They didn't even restrict Bayer from selling it in India.

LarryC wrote:

Ego Man:

IPs and patents are monopoly rights. They are explicitly so in the first documents that talk about them way back when. Obviously, removing monopoly rights from one company allows for a freer market.

I do not see this as being obvious. They are taking it from one company and granting those rights to another. They are not opening it up to all companies equally.

Bayer in this case isn't really concerned about Indian patients. They can live or die as far as Bayer is concerned. Their inability to pay money means that they're neutral at best. Where the sh*t hits the fan is when local Indian companies make the stuff cheaper, and the cheaper stuff erodes Bayer's monopoly rights and large profit margins in more wealthy nations like the US. That's the situation in which it becomes profitable for Bayer to prevent other companies from making life saving drugs for dying people.

Yep. This is why I find it an interesting discussion. Bayer is in the business to make money. If there is not profits, then why would they research these drugs. The Indian (and other countries) generic drug manufacturing companies get the ability to make a product without investing in the research to create the drugs. If they had their own IP, then they may not be so quick to get involved.

Again, I do not have a position on this. I can see both sides of the equation. I am not sure where we can find the fulcrum. (warning social science major trying to use physics for illustrative purposes...it ain't always pretty)

LeapingGnome wrote:
Aetius wrote:

Government-enforced monopolies are very expensive for the people who live under them. With competition suppressed by patents and the high barrier to entry provided by the FDA, such prices are not at all surprising - and are even beyond the capacity of most health insurance plans as well.

Without the patents to protect potential profits why would a drug company invest hundreds of millions of dollars to bring a drug to market? Would Lobster rather Temozolomide not exist at all?

Except the problem is that much of the funding for actual health-related drugs (rather than luxury drugs) comes from government grants -- i.e. through taxpayer funding.

LeapingGnome wrote:

May not be a bad idea, but I would like to see regulated utilities first.

Utilities are hugely regulated. Do you mean more regulated than they already are, or a new definition of the term 'utility'?[/quote]

In my state there is deregulation which means my electricity bills went up 30% and I have the joy of shopping for electricity like a cell phone plan.

Farscry wrote:

Except the problem is that much of the funding for actual health-related drugs (rather than luxury drugs) comes from government grants -- i.e. through taxpayer funding.

There is a significant funding gap between the end of academic research and the R of R&D of a therapeutic company. As noted many drugs have $1 billion development plans. Billions of dollars of private money have been poured into drugs that never make it to the market. I do not think that the FDA is the problem. The problem is that the low hanging fruit has been picked.

There is vast of amounts of private research dollars looking for cures. They need a ROI or else the advances stop.

Greg wrote:
Farscry wrote:

Except the problem is that much of the funding for actual health-related drugs (rather than luxury drugs) comes from government grants -- i.e. through taxpayer funding.

There is a significant funding gap between the end of academic research and the R of R&D of a therapeutic company. As noted many drugs have $1 billion development plans. Billions of dollars of private money have been poured into drugs that never make it to the market. I do not think that the FDA is the problem. The problem is that the low hanging fruit has been picked.

There is vast of amounts of private research dollars looking for cures. They need a ROI or else the advances stop.

So why the f*ck don't books and CDs cost $300 apiece?

H.P. Lovesauce wrote:

So why the f*ck don't books and CDs cost $300 apiece?

Try introducing Book Insurance. I'll bet in 20 years they will.

H.P. Lovesauce wrote:

So why the f*ck don't books and CDs cost $300 apiece?

I don't understand your point.

LeapingGnome wrote:
Aetius wrote:

Government-enforced monopolies are very expensive for the people who live under them. With competition suppressed by patents and the high barrier to entry provided by the FDA, such prices are not at all surprising - and are even beyond the capacity of most health insurance plans as well.

Without the patents to protect potential profits why would a drug company invest hundreds of millions of dollars to bring a drug to market? Would Lobster rather Temozolomide not exist at all?

I think, for the sake of discussion, we should use a hypothetical cancer patient. A hypothetical patient would probably prefer the treatment exist even if they have no access to it. However that may be more out of the goodness of their heart: that they're glad someone can be treated even if they can't. I'd like to think there are millionaires and billionaires out there who have that same kind of good heart, and would fund medical research not for the profit motive, but because cancer is f*cking terrible and the only people who deserve to go out like that are vicious tyrants, medical charlatans, and hateful fanatics who picket the funerals of soldiers.

LeapingGnome wrote:

Without the patents to protect potential profits why would a drug company invest hundreds of millions of dollars to bring a drug to market? Would Lobster rather Temozolomide not exist at all?

Because drugs would still be in high demand and very profitable - and without the high barrier to entry would be much cheaper to develop? And far from stymying the production of new drugs, the increased competition would do what it does in every other market - drive down costs and drive new product innovation. If you read Minarchist's link, you'll read about the research that has studied the damping effect patents have on innovation and cost reduction.

LobsterMobster wrote:

A hypothetical patient would probably prefer the treatment exist even if they have no access to it.

While this is true, I think the hypothetical patient would prefer a lot more that the treatment exist and they have access to it.

I'd like to think there are millionaires and billionaires out there who have that same kind of good heart, and would fund medical research not for the profit motive, but because cancer is f*cking terrible and the only people who deserve to go out like that are vicious tyrants, medical charlatans, and hateful fanatics who picket the funerals of soldiers.

You don't have to wonder about that - there are plenty of people who support cancer research because it's worthwhile, many of them not millionaires or billionaires. Americans give $300 billion a year to charity, and a substantial portion of that goes to cancer research and mitigation.

Aetius wrote:

You don't have to wonder about that - there are plenty of people who support cancer research because it's worthwhile, many of them not millionaires or billionaires. Americans give $300 billion a year to charity, and a substantial portion of that goes to cancer research and mitigation.

...and then the pharmaceutical companies price the drugs out of the reach of most of the people who donate to the research. Which brings us right back to the article in the OP.

I think the idea that lower prices would kill drug research is an industry born lie. Pure propoganda. As long as there is money to be made, research will happen. If there is less money to be made, maybe research will become more efficient or adapt. How many organizations are doing research purely because.. there is money to be made. Probably a lot.

Irongut wrote:

I think the idea that lower prices would kill drug research is an industry born lie. Pure propoganda. As long as there is money to be made, research will happen. If there is less money to be made, maybe research will become more efficient or adapt. How many organizations are doing research purely because.. there is money to be made. Probably a lot.

I did a stint at a small (1 billion dollar) animal research and testing facility. their primary clients were biotech firms trying to get FDA required tests so they could move on to human trials. Many of these tests (especially the expensive ones on big animals like pigs or monkeys) lasted for 2, 5, even 10 years.

Thing is, some of these biotech firms were often two chemists working out of a garage, sitting on huge piles of venture capital - venture capital given *because* of how lucrative a successful drug can be. Not all of these drugs come from Big Pharma.

Or, that's the line we were given. havent worked there since 2001.