Bayer CEO Says Cancer Drug is for Insured Western Patients, not for Indians

I hope you’re not implying that those are the only (or even the primary) expenses incurred for a clinical trial.

What else is there?

The facility where the trial takes place, including all of its overhead costs (electricity, admin, janitorial, groundskeeping, etc.)
The lab where biological samples are analyzed, including all of its overhead costs
The people who write up the reports
The researchers who develop the drug in the first place
The facility where they work, including all of its overhead costs
The animal testing that takes place prior to human testing
The statisticians who boil a sea of results down to a few comprehensible numbers
miles and miles of red tape requiring many man-hours to sort through: FDA approvals, IRB approvals, legal wrangling, and so on
The engineers who develop industrial processes to economically produce large quantities of what the researchers have developed in the lab
The setup costs of the facility where these large quantities get produced

Not being in the field, there’s probably a bunch of stuff I’m leaving out. Bottom line, there are a lot of people besides the phebotomist at the clinic who need to be paid in order for a drug to make it from the “this might work” stage to “for sale”.

Sure that can help, but not always. Just look at all the problems Johnson & Johnson have had with their facilities in the last few years in such far-off foreign places like Pennsylvania and Puerto Rico.

Then let us not pretend that Bayer have been deprived of anything they own through divine right or some abstract moral code. They have been deprived of a monopoly they were granted for the common good. They were granted it for the good of science and medicine and were deprived of it for the benefit of those Indians suffering the relevant forms of cancer and able to afford $177, but not $69,000. Which, in a country of over a thousand million people may constitute several thousand. It has been argued that the drug has little actual value, due to being ineffective and only providing a potential two months of extra life. Perhaps this is so, but the exclusive right to sell the drug does not become more sacred because the drug becomes more worthless.

I would like to quote Thomas Babbington Macauley, in a speech he was given in the House of Commons over a proposed change in copyright law back in 1841, as a related matter of intellectual property, so-called:

In this Indian case, not only has Bayer’s monopoly lasted long enough for them to have recouped any losses, but in India there were never any profits to be made and never any that were planned to be made, as the company has admitted. To maintain the monopoly at the expense of the public is a significant impost, with no gain to be had. To dissolve it will benefit the public, with no losses to be had.

Related:

Bayer had, in the year wikipedia covers, revenues of $44bn, profits of $6.4bn and R&D costs of $1.7bn. That is the highest ratio of profits to research spending on the list, although the list as a whole spends more on profits than research. They also make the sixth highest profits despite being only thirteenth in terms of sales.

And, for those who don’t like generics, Bayer do seem to have knowingly infected their products with HIV.

So, for the moment, let’s not worry about their abandoning pharmaceuticals for the high profit world of console manufacturing.

On behalf of prostitutes of all varieties, I object to this ugly and unfair comparison to Bayer.

Once again, IANAL, but from what I can gather in the eminent domain argument, it does. Ignoring patent, copyright, whatever, is by that argument, only potentially justified because it serves the public good; not the good of a domestic manufacturer of generic drugs. If the major beneficiary of the seizure of intellectual property is private domestic industry, and not the greater public good, if no greater public good actually exists, then the argument is completely null and void.

What does the WTO (of which India is a member) say about IP and pharmeceuticals?

As an aside, my seed question is answered as follows:

So the flexibility to seize the IP of seed is quite constrained, more constrained than pharmaceutical IP seizure is, but pharmaceutical IP seizure is still constrained. The seizure of pharmaceutical IP is justified if it is service of protecting public health. It is not justified if the seizure is not protecting public health but instead is primarily serving the benefit of a domestic industry, as is clearly the case in this specific circumstance.

It first came to market, as best I can tell in 2008 and began to hit its stride in 2009, increasing sales since then. Seems like they (Bayer who actually justs markets it, and Onyx, the company that actually developed it and that ran a loss every year until Nexavar sales took off, fundig other R&D that they do) have recouped the direct R&D costs. Is that all a developer of a new invention is entitled to though? To recoup their costs. Is the message “build a better mousetrap and the world will pay you for what it cost you to do it and then take it from you”?

Here is what I think is the real motivation for India’s action:

Its use there startedtaking off in 2012. Just a coincidence that in 2013 India confiscates the IP. Yeah, right.

Yes, Bayer negotiated with China and came up with a price that both felt was fair, no doubt much less than it sells for in the West. China, not exactly famous for respecting IP, respected this IP and came to a negotiated price. You think India is aiming to treat their few middle class and higher with advanced non-resectable hepatocellular carcinoma with this generic knock-off? It is that overwhelming public good it is after? Or is it the hope of sales to the largest potential market for the product there is, their neighbor, China?

Before you answer factor this into your assessment: China is a high incidence zone for hepatocellular carcinoma. Couple that with its population size and the total hepatocellular carcinoma deaths there are over 300K a year. India is a low incidence zone for hepatocellular carcinoma. Even with its large population India runs under 13K hepatocellular carcinoma cases a year. And only a very few of them could afford the discount price and India will not provide it for them.

Yeah, Bayer has an ignoble history and the statement made was idiotic to say. They do make it for the Chinese, happily so, even if they don’t for India. They don’t for India because the market there is too small and India does not care to negotiate a fair price because serving the public health good is not the goal. Bayer may be a less than noble actor. But the fact that the person you are mugging to line your own pocket is guilty of past crimes does not mean that what you are doing is any less neferious.

This does happen, even in oncology drugs. However, there is more risk in conducting clinical trials in India and other poorer countries due to factors like quality of care standards and protocol adherence.

For example, it takes a lot of time to do a work up on a patient to make sure that the patient is eligible for a trial (lab tests, data collection, listing all of their coexisting conditions). Not all centers have the equipment or experience necessary for an oncology clinical trial that a regulatory-caliber trial requires, e.g., MRIs and specimen handling and research staff and dealing with adverse experimental drug reactions.

Well suppose that after all of that work by specialists, the patient gets a first dose of experimental drug and then never comes back to clinic? People in poverty tend toward non-adherence, non-compliance with the rules of a trial, and miss clinic visits. No one knows if the patient died or got better. All of that effort is down the drain and the pharmaceutical company paid for all of it.

So pharmaceutical companies are rightfully very picky about what clinical centers they choose and the research teams with whom they work (in India and elsewhere). Deploying a clinical trial overseas in countries like India isn’t a cakewalk because those cohorts of patients bring along their own sets of problems.

Machine Elf and bleach gave some nice feed-back on the cost of clinical trials.

But I do have more to say on drug safety - although this might be a hijack.

You’re not from the industry, are you?

For every major story on a recalled product there are … a lot of recalls that never get reported in the popular press. I can’t give you stats, because I don’t know how to count / estimate how many recalls are reported in the press. I can tell you how many drug recalls there have been in a given period; FDA tells us.

Let’s see - here’s a recall of a popular anti-fungal medication from last November (and reported last week), a generic, used to prevent AIDS associated opportunistic infections, manufactured by Teva, no FOR Teva, by a CMO in India. Nope, nothing to worry about there.

We can rely on the FDA to protect? How? Do you think they have the money and the personnel to inspect every declared shipment of drugs? Or even every domestic, never mind ExUS facility, that frequently? When congress is taking money the drug companies pay to get applications reviewed away from them?

The Tylenol poisoning didn’t effect many people? What … wait, are you talking about the events in the '70s (that led to the tamper evidence packaging regulations)? What about the current shortages? See below.

Your drug supply is not safe because there is some vast army of nameless servants to the greater good monitoring them - actually, there is, and they are paid by Big Pharma.

And they do not come cheap.

That was my point. If I have a head-ache, I can look at the package of an OTC, see “McNeil”, and make an informed risk-benefit assessment (and probably opt for chamomile tea and a darkened room.) And the store brand could be made at a higher quality facility; but I don’t know that, because I don’t know where it is made.

I was actually being facetious, but thank you for the information.

One wonders if Macauley could explain how the common good is served by allowing India to steal the stuff and sell it to the Chinese, as DSeid mentions.

Regards,
Shodan

Here is the R&D portion from their most recent posted annual report:

http://www.annualreport2012.bayer.com/en/research,-development,-innovation.aspx

€3.0 billion spent in directly allocated R&D

Overall financials:

Bayer: continuing growth momentum

Group targets achieved in 2012 – sales and earnings before special items increase in all subgroups
Sales €39.8 billion (Fx & portfolio adj. +5.3%)
EBIT €4.0 billion (-4.6%) – net income €2.4 billion (-1.0%)
Further accounting measures for legal claims
EBITDA before special items €8.3 billion (+8.8%)
Core earnings per share €5.35 (+10.8%)
Encouraging growth in the emerging markets
Steady progress with innovation pipeline strengthens life-science businesses
Forecast for anniversary year 2013: continuing record development

This reminds me of a line by Tom Lehrer:
[Such-and-such fictitious doctor] soon became a specialist–specializing in Diseases of the Rich…"

Don’t you wonder where all that money is going? I sure do…

Seems like a mighty stupid way to foster innovation and a thriving economy, if you ask me.

There’s a big difference between a country seizing a domestic patent (i.e making it secret, rather than a published patent) and a sovereign nation blatantly stealing technology from another during peacetime. If India stole P&W or RR jet engine technology without license, that would likely be reason for lawsuits and trade sanctions, not just shoulder-shrugging.

This seems to me like a relatively ham-handed way to give their domestic pharmaceutical industry a boost by effectively stealing an advanced compound through some sort of fucked-up intellectual property eminent domain concept.

Actually, copying from first movers is a great way to jump start innovation and a thriving economy. Look at China’s manufacturing industry. To sustain and build on that start will require a change in values no doubt, but that evolution can come with time. When the competence and ability to build IP develops in India, there will be domestic pressure to have stronger IP protection.

You can call it stealing, but you’d be wrong. What India’s done - granted a compulsory license - is specifically allowed under the WTO IP agreement. There is a relevant legal authority that has adjudicated the matter, and indeed the result of that adjudication is why this is in the news. You may disagree with the adjudication, and personally I do, but it’s not stealing, by virtue of the fact that the authority which has the right to decide the matter has decided it is not.

Do you have a link to the WTO decision in these types of cases? I read a few of the articles, but I haven’t seen the relevant WTO responses to any challenges. It appears the US might be looking into this, as India is targeting several drugs for this treatment.

Um no.

Granting a compulsory license is specifically allowed under certain constrained conditions - to protect public health. Not in order to give a competitive advantage to a domestic company in the marketplace.

And the relevant legal authority in the case of a dispute is not India’s patent court, which is who ruled this last week. There is a defined process that may now occur, which may wait to proceed until India actually begins sales in China. The “relevant legal authority” is

As to your other point

This in yesterday’s NYT is timely. Yes, look at China. Yes, stealing works when you get away with it.

Yup … greeaaat.

I admit I was not following the patent case. I have been following the US actions against certain manufacturing facilities in India, though, and I wonder if there is a direct connection. That the Indian government is essentially saying they do not need the US / European market.

The decision makes no sense to me from a political viewpoint. The benefits to manufacturing in India are already under pressure, from increased regulatory scrutiny, as well as the ongoing legal actions. Why make it even less attractive by throwing the likelihood of loss of patent protection in to the mix?

This will very likely be brought to the WTO, by way of that defined process linked to above. Whenthe initial ruling first occurred the US had already stated that if the appeal in India failed that they would do so:

Stay tuned. The relevant legal authority has yet to be involved.

The WTO process you’ve pointed to is dispute resolution. The TRIPS compulsory licensing decision making body is the domestic one - the one that has made the ruling. That the process is not complete does not make the part of the process that has so far taken place illegitimate.

I don’t get your point here. Are you contesting that stealing technology can be a great way of jump starting your own efforts? I’m just saying it works, and am not taking a moral stance.

Dseid, you seem to be mistaken on the public health reasons for compulsory licensing - Here, from the WTO page on compulsory licensing -
http://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm

The page also mentions that an attempt at voluntary licensing must be made, but states that ‘anti-competitive’ practices can allow compulsory licensing without an attempt at voluntary licensing. Overall, I’m in agreement with you that this is essentially a grab by private interests at what they don’t own, but I don’t know that it is necessarily a ‘bad’ thing. Who does this decision harm, and in what way? India was never a viable market for Bayer’s Nexavar at the prices that it wants.

Your post doesn’t make sense to me. This case has been going on for a very long time, and the most recent decision is only a decision on appeal. Also, as AK84 has pointed out, the Indian decision is not an executive decision - it is made by an adjudication body. Nor do I see how this decision makes manufacturing in India more or less attractive. Are you under the impression that copying/stealing/whatever you want to call it requires a manufacturing setup in the country in question? That Bayer had to be manufacturing Nexavar in India for it to be copied? Most Indian pharmaceutical manufacturing is anyway done by Indian companies.