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

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."

Comments

Just keep in mind the tradeoff

[elrous0]

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.

Re:Just keep in mind the tradeoff

[Anonymous Coward]

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.

Re:Just keep in mind the tradeoff

[elrous0]

Well apparently the academic institutions, small biotechnology companies, and NIH are motivated by profit too, or they would be putting the drugs into the public domain, wouldn't they?

Re:Just keep in mind the tradeoff

[Anonymous Coward]

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.

Re:Just keep in mind the tradeoff

[Wain13001]

Popularity of a product doesn't lower the price...it results in a raised price or more production which lowers the cost for the company, but it doesn't necessarily lower the price.

Viagra is currently $8-12 dollars per pill *with insurance* under most plans in the US...and you only get 8 or 9 pills (forget how many) for what is supposed to be a 3 month supply.

Only when there is a legal generic in the US will that price drop (mass production/increased availability lowers price). Did the advertising impact the cost? yes it did, it made everyone on earth aware of the product's availability which greatly increased the potential market value, which in turn means the price the market is willing to bear in fact can often go *up*...not saying it did with V or not, just saying that it's not as simple as you're making it.

Re:Just keep in mind the tradeoff

[glop]

If you compare a country where advertisement for drugs is illegal, you can see that:
- new drugs are used just as well (as long as the doctors and patients see the value proposition)
- drugs are actually cheaper in countries where said advertisement is illegal (and we are talking expensive countries here, where most stuff is selling at prices similar to those of the US except for know ripoffs such as Verizon cell phone service or internet).

In such countries the doctors are usually determining what your ailments are and offering what they think are the best corresponding drugs. So drug companies just have to convince these experts that you need the drugs and they will be used. That seems quite reasonable, efficient and reasonably respectful of individual freedom, although there is some abuse (drug companies sometimes offer free seminars in tropical islands for instance).

In the US, advertising to end users also increases some risks that people will ask for drugs they don't really need. When you see the list of side effects, it's easy how to see how this could be quite dangerous and 'give cancer' as was said...

Example: Lovaza is refined Omega3 with some testing done (basically filtered fish oil...). They have ads on TV all the time and the drug is very expensive. You can buy Omega3 for much less from all kinds of supplement manufacturers. That seems to contradict your theory.

Re:Just keep in mind the tradeoff

[Xtravar]

Yeah, his example only works on things like Viagra, which are completely optional.

Re:Just keep in mind the tradeoff

[dkleinsc]

No amount of marketing can change the number of people who need a drug. That is fixed.

Actually, it isn't. For instance, there are endless TV ads describing a list of symptoms and instructing the viewers to diagnose themselves with a disorder X and ask their doctor for a prescription for treatment Y. This may motivate somebody to seek out medical aid for a real problem, but what the drug companies are really hoping for is that a layperson will be convinced they have X (even if their regular doctor tells them they don't) and shop around until they get a prescription for Y. And since it's a treatment rather than a cure, this same person will get treated with Y for years regardless of whether they really need it, so long as the side effects aren't too bad.

This is part of what's wrong with for-profit health care: It's profitable to create demand that's not only useless but actually counterproductive and sometimes dangerous.

Re:Just keep in mind the tradeoff

[Hatta]

Guess what category 'educating doctors' falls under? That's right, marketing.

Not a chance. Education and marketing are mutually exclusive.

How do they educate doctors? By buying ads, and sending reps to talk to the doctors

That's not education.

How does a busy doctor have time to talk to a rep? The rep buys him lunch.

Also not education.

How does the rep convince the doctor that his meds are right for the doctor's patients? By giving him samples.

Still not education.

Re:Just keep in mind the tradeoff

[P-niiice]

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.

there's a reason they're overpricing this drug

[ruebarb]

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

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

That argument is empirically false in this case.

[langelgjm]

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.

Nonsense! Capital will flee

[unassimilatible]

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.