This whole thing is really about the old debate over whether medicine should be for-profit at all.
Is there a way to compare innovation and results between a system that allows medicines to be created and distributed for profit and one that does not?
Welcome to the real world, where reputation strongly affects how people and organizations act towards you.
Why?
To those who think that the amount charged is price gouging - what is a fair amount of time to expect recouping of development costs in a market segment that could see your product superceded by a better one at any time? A year? Two? Three? At the revenues amount I could find and the reported development costs, this is on track for three years until it is true profit.
To me it is more interesting that the market bears this price. It does very little good. It is not saving lives. It at best prolongs dying with advanced cancer by a couple of months. But we will pay virtually anything for that and therefore Pharma is incentiviced to develop for that indication.
Der Trihs actually you make the point that some on the other side of this discussion are making. India is developing its reputation as a country that steals intellectual property. This will affect how other organizations and countries act towards them in the future. Real world.
Again Bayer could do better - offering product on a compassionate use basis for example … but this seems less about India providing care to its poor (who they provide little medical care to) and more about flaunting IP standards.
That’s not “wasted” money, that’s part of the cost of doing research. Or do you think researchers have a magic crystal ball they can look into to eliminate fruitless lines of research before they’re actually done?
I would imagine the billions could indeed be counted. I know big pharmaceutical companies spend a lot on research but it’s a fairly predictable amount, usually ranging from 10 to 20 percent of a big pharma company’s operating budget.
Price gouging or predatory pricing doesn’t come into it at all.
The fact is that Bayer owns the intellectual rights to a particular drug and the processes to produce it, and the Indian judiciary has effectively stolen that and granted it to a local company without recompense.
This is NO different than India deciding that they need some jet engine model that Rolls Royce, CFM or Pratt & Whitney developed, and handing it over to some Indian firm for production, simply because Indian airlines can’t afford the spiffy new engines.
In effect, India has not only ignored the concept of patents and intellectual property, but deliberately flaunted them by granting the rights to produce the drugs to a local company.
It would be not quite so wrong if some Indian drug company was illegally producing the drug and the Indian judiciary turned a bllind eye, but actively flouting generally accepted principles is something else entirely.
I suspect that Bayer and other pharmaceutical outfits will cease marketing expensive drugs in India at all in the future if this sort of action continues.
So… if the Indian government had first reimbursed Bayer some or all of the R&D costs of the drug THEN went forward with producing a generic you’d be OK with that?
Another way of phrasing the question is: could Bayer license another company to produce some of its patented products? Of course. That’s one of the benefits of having a patent.
But if you were to invent some novel thing, I couldn’t just give you $20 and then start making the thing without your permission. Just because I gave you unsolicited money doesn’t mean I get legal rights to your inventions.
I do medical guinea pigging for cash, my last flu vaccination was at the lab I pig for, I was pigging delivery systems so I did actually get the vaccine, I got paid $50 for going in, getting the shot, and recording daily certain stats for 4 weeks, then the follow up appointment. The most money I have made was $500 for an 8 month study where I may or may not have gotten the med in question with monthly appointments and a single follow up appointment. So the cost of being in a study for the guinea pig is pretty freaking minimal, not counting the cost of the medication or the company actually doing the guinea pig part of the study.
My opinion? Bayer needs to suck it up, you balance out your costs with the profits from your ‘bread and butter’ medications - the cold remedies, the upset tummy meds, the headache remedies, the blood pressure meds, the insulin. [and the viagra gold mines, though that is a different company] Just like any other business, you make your profits across the board - the stuff you can sell supports the stuff you can’t sell.
I don’t see what your point is, about being a subject in those studies. Are you suggesting that clinical trials are not enormously expensive?
As for using OTC medication to fund the cost of new drugs, I don’t think you are taking into account how many of those have generic equivalents.
RickJay you are usually more intelligent than this. This is a court ruling rather than decision by the Government of India. Moreover, this a specific type of drug for a specific type of cancer. It’s not as if its WHO Essential drug.
As has been alluded to, this is the kind of thing eminent domain was designed for: India buys the patent at some non-negotiable rate (because India is sovereign and Bayer isn’t, and popular sovereignty trumps personal property every single time) and produces it however it sees fit. If Bayer wants to refuse the payment, it can, but, like someone whose house is being demolished for an overpass, it can’t stand in the way of progress.
There. That’s entirely consonant with our shared traditions of jurisprudence and therefore unimpeachable. Now that we’ve established what Bayer is, the only thing left is to haggle over the price.
Its an incredible cold and heartless thing to say, but it also happens to be completely true
Right. Had the Indian government negotiated out some sort of licensing agreement, then I’d be totally fine with it. Otherwise it’s no different than you inventing something in your garage and some other state’s government deciding that it would be useful for their poor people and taking it and having one of their firms produce it without paying you.
How would you feel in that case?
Except, again, this is unlikely going to be used for the benefit of their poor people. It is going to benefit the generic pharma maker and pretty much only them. Okay maybe a few middle class and higher Indians, and others in Asia and perhaps the ME, will have their deaths prolonged by a few months, if you count that as a benefit. The poor? They will not be getting this medicine. Not in India.
Derleth does your eminent domain argument apply to software? Movies? Technology? Books? Or only pharmaceuticals?
Hopefully related question: given how short drug patents are, how come companies don’t just keep their formulas a trade secret, like Coke does with it’s secret formula? Couldn’t they then just have exclusivity forever, assuming success at keeping it a secret?
I expect it is because most drugs are a molecule, not a compound of several ingredients, like Coke. It is much easier to reverse engineer a molecule, using mass spectrography and similar technology.
First of all, so far as I’ve ever heard, eminent domain applies to real property. Secondly, at least in the United States, the one who had the taking thrust upon them are entitled to just compensation, which is typically fair market value.
So, under your scenario, the Government of India would probably owe Bayer hundreds of millions of dollars by taking their intellectual property. Is that what you’re really thinking about, a huge government payoff to Bayer? That is, if you’re actually proposing something consonant with our shared traditions of jurisprudence and therefore unimpeachable?
None of those are needs, so it’s much harder for a government to argue that those things are for the good of the people. The Indian government has successfully argued that preventing the pricing prescriptions out of the purchase ability of those who need it is something that is good for the people. They have successfully passed laws that allow them to do what they are doing.
I don’t like the framing of this in solely capitalistic terms. It has to be weighted against the public good. Medicine is definitely not the same as entertainment media. The same rules should not apply. Countries have free national healthcare, but they don’t tend to have free national entertainment. Governments don’t make you go to a specialist to determine what DVD you need to get.
And it doesn’t help that Bayer threw in what sounds like a bigoted argument. The drug should not be made for Westerners and not Indians. There should never be any a priori assumption that one type of people can have something and another can’t. Even if it was stealing, it’s harder to get all that upset about stealing from a bigot.
Also, let’s not forget that medicine use is not unregulated. There is an ability to confine different prices to different regions. It would be possible for India to set it up where only Indian citizens with Indian prescriptions could get the drug for cheap. If you can effectively prevent anyone who would willingly pay more from being able to get something for cheap, then it makes no economic sense not to sell for the best price in that region, as long as they can make a profit on versus manufacturing prices. It’s better to make some money than none.
I mean, I do see the argument that, if India cares so much, they should subsidize the drugs. But I also see the argument that a government has a duty to protect against price gouging of drugs, and paying for a high priced drug only encourages higher prices.
In theory, yes, without question.
In practice, it would be extraordinarily rare for any government to have a pressing need for such things such that eminent domain would be the most practical way to acquire them. Books, movies, and software are all most often bespoke once you have a rich enough client, and ‘technology’ in general isn’t necessarily bespoke but government (which is most often military) technology must live up to different standards than civilian stuff.
No gotcha here. Just standard operations of sovereign states, which go back to the era in the Western World when sovereignty (theoretically) inhered in a single person, not a process founded on popular consent.