That seems to contradict the other WTO page I had cited … so no surprise that there is, as they state on your cite “some confusion.”
Not quite sure what qualifies as anti-competitive practices and suspect that if this is, as I still suspect it will be, taken to the WTO Dispute Settlement Body, the issue will be if such a standard has been met.
Indeed the domestic market in India really does not matter for this product, given the low incidence of liver cancer in India and the lack of insurance or adequate resources or intent for the government to provide for even the highly discounted product by/to most of its population, there will be few sales there. This drug never was “for Indians” which is not a viable market for it. The generic drug made in country is not going to be for Indians either. The page you linked to confirms the big deal: it specifies that export to countries without production capability is permissible once a compulsary license has been granted.
Again … the China market, half of all advanced liver cancer in the world, 300K annually, where Nexavar sales have been increasing fairly rapidly, is the clear reason for this grab.
Given the page you cite I am not sure if this sort of mugging will will be allowed after review by the Dispute process or not, but it is still clear that a mugging it is.
India is developing a generic drugs industry and is declaring that they will use these rules to take the patent of any profitable drug there is in the world and produce it for sale wherever they can sell it, to whichever country will allow its import. That is using the “flexibility” of TRIPS to confiscate IP with the sole goal of supporting a domestic industry. IF such is allowed, which clearly was not the intent of the rules, then there still will be consequences between countries in tit for tats … and should be.
Is it working for seeds? Note that the “Chinese have not developed a major corn hybrid since 2001” Not much innovation turning up. At the risk of sounding goody two shoes, turning in someone else’s paper as your own may get you a good grade but it does not teach you how to write better.
The risk of stealing and not cracking down? The “country’s second most popular corn, which debuted in 2007, was a collaboration between Pioneer and a Chinese company.”
Stealing does not foster innovation; it poisons the well for collaboration. Countries and multi-national companies are no different than people this way - if we feel we have been taken advantage of we will seek retribution even if it costs us to do so.
Actually what I meant was that if IP is a gift from government (which I don’t agree with), meant to advance the commonweal, and if it doesn’t, the government can revoke it, then revoking it is mighty stupid because people with good ideas will tend to go places where their ideas won’t be stolen and they can profit from them.
I know that copying the first-movers is a good strategy, but I was trying to say that not having robust IP protection isn’t a good way to foster innovation.
It’s working for electronics manufacturing. Much innovation is happening in China that did not, could not, have happened earlier. There is a ‘learning by doing’ aspect that is involved in manufacturing processes. There is an initial capital requirement in pharma(and other industries) that may be a barrier to R&D but not to manufacturing which could allow the sector in India, once it develops further, to start doing R&D. Out and out stealing is, agreed, probably not the optimal way for such learning to take place. I’m just not sure that this case can be classified as such. There is a legal mechanism which has been laid out and which seems to explicitly allow what has taken place. The dispute resolution will be the final arbiter I suppose.
As to your other point on export, I agree that export to places that could be target markets for Bayer would hurt them. Surely that’s a slightly separate issue though? If that is at the core of the dispute, I haven’t heard it addressed explicitly by any of the stakeholders.
There is considerable debate on the effect of too robust IP protection. Not to mention that in an international case like this, the effect on incentives is not straightforward at all. Bayer never developed this drug with any business case for substantial sales in India or any developing country for that matter. Their incentives do not change substantially if a company in India copies the drug and manufactures it for sale locally. Fostering innovation is not quite as simple as having good IP protection either. In the matter of Pharma for instance, capital and know-how are both essential. Allowing poor IP protection and production of generics at an initial stage and strengthening IP protection as you develop both capital and know how seems like a more viable strategy to me than starting with strong IP protection. YMMV.
I deferred to your more comprehensive WTO page cited on the lack of need to prove a public health good and I assume you will defer to the same source stating that once a compulsary patent has been granted export is allowable to anywhere that does not produce it that is willing to import it, despite what Medicin sans frontiers believes is the case.
Your most recent cite documents that I misunderstood the cost within India - it will be $175/month, annualized to $2100/year.
No offense but are being naive if you think that this is not about the Chinese market. There is no real market for this drug at $2100/year in India.
There simply are not enough of the relatively few with advanced liver cancer in India who can afford to spend even about $2000 over the course of a year in order to take 2 or 3 months longer to die to justify producing this drug.
Nor would it make sense for the public sector to prioritize that spending when deaths from diarrhea caused by the germ Rotavirus, roughly 113 000 under 5 years old per year, are not worth spending money on preventing. The vaccine, a standard part of the US immunization list, works extremely well yet has not been part of India’s public sector spending and is hardly used there.
Yes, they cannot/will not afford $88 per year of life saved, full productive lives. Spending $2000 to extend dying by 2 months, that comes to $12 000 per year of poorer quality and presumptively low to no productivity, would not make much sense in that context.
I don’t know. Is it impossible that the relevant patent ruling in India restricts the drug to be sold locally? Because besides the explicit statement from the cite that I quoted, quite a number of articles on the issue imply quite strongly that only local sales are concerned, and not a single one mentions the export issue. Surely there would be some statement from Bayer regarding the harm it would experience in other markets? I haven’t been able to find anything.
Also, there is this bit that hasn’t yet been highlighted in the thread yet
Also, I think there is a reasonably large population in India that can afford 2100$ a year. That’s 120,000 INR, give or take, a year. If I had to guess, based on what I know of India, I’d say there’s at least a 100 million people who could pay that much once you add credit. Sure the market is only whatever percentage of this population gets the specific cancer in this case, but isn’t cancer a ‘rich man’s disease’ so to speak? More likely to strike those with better lifestyles?
Even if they didn’t develop the drug for India, and they won’t be materially hurt financially if the Indians steal it, the fact remains that Indian pharmaceutical companies can learn plenty from Bayer’s process and actual compound itself.
That’s the IP I’m talking about- they’re effectively stealing Bayer’s competitive advantage in research and know-how by way of legal fiat, and granting it to their own companies. Who’s to say that some Indian company isn’t going to piggy-back off of Bayer’s process or drug and develop some other drug that makes billions? Billions that rightfully should be Bayer’s, IMO. That’s the big problem with what they’re doing, not that they’re not being compensated for the actual drug itself that will be given to a relative handful of terminally ill Indians.
My point about IP and innovation was a broad one- if people aren’t allowed to profit from their intellectual property, they’ll go somewhere that they can, or wait until the conditions were right.
Not liver cancer. Mostly a consequence of having had caught chronic Hepatitis B from mom during birth, with some contribution from other hits like alcohol consumption, dietary alfatoxins, smoking … 85% in less developed countries, again 50% from China alone. Not a rich man’s disease at all.
The 1%ers in India start at Rs 12.5 lakh, which is about $20K. Top 5% spends about $444/yr in rural areas and $1224 in an urban area. (Feel free to check my math.) So maybe a bit more than 1% of the 13K cases of advanced liver cancer in India a year can afford it - that would be a total of 130 cases - oh be generous and let’s imagine that someone whose usual total yearly spending is $1224 can afford to spend almost twice as much than that on meds to extend their death by 2 months, especially during a time of illness and therefore lessened income … even then you are very generously talking a potential market of 650 people.
Is that the market this is about? Somewhere between 130 and 650 customers a year?
But this is precisely the point at which you come to the debate about whether IP helps or hinders innovation. If there’s no IP, it’s argued(and I personally am inclined to this view) that it’ll hinder innovation. But there is also a considerable literature that argues that too strong IP hinders innovation, that companies tend to become more interested in defending patents than in innovating.
In the example you yourself give - if an Indian company ‘piggy backs’ off Bayer’s process and makes a compound that goes on to make billions, innovation has happened and humanity at large has benefited. Too strong IP protection would have ensured that didn’t happen. Bayer itself may or may not have seen that particular possibility.
This isn’t a simple issue, and I am personally undecided on which way to lean on it. My economic proclivities are towards markets, and IP should help markets function, but the evidence on level of IP protection is mixed even in straightforward, single market cases. And this is very much an edge case.
Is the 13k number for incidence of the cancer those who were actually diagnosed, or an estimate? If it is those who were actually diagnosed, then I’d venture that most of those being diagnosed with the cancer are rich enough to afford the 2100$ a year treatment. Because in your analysis, you’re assuming that the distribution of income among those diagnosed will be the same as that of the population at large. That would be erroneous. The fact that they were diagnosed as having the disease means they have access to a level of care that can make the diagnosis, which already puts them on the right tail of the income distribution.
If that estimate is correct, and given that it was for 2001, it may not be current, or correct, your analysis is more or less correct, although I’d place affordability at 10% of the patients, not 1%. Even that would make the market for the drug quit small, at around 1300 people.
However, I’m still inclined to believe the specific cite I listed earlier that this ruling does not allow the Indian company to export the drug, particularly because it’s from a source(MSF) that favours export being allowed and it specifically states that it regrets it wasn’t and hopes future rulings will allow export. I’m also inclined to believe that export is not being allowed because I don’t find a single mention of export being mentioned as the problem anywhere. I’m certain Bayer’s statements should have atleast mentioned that aspect.
I would change my mind if export were in fact allowed/happening. That would cause Bayer harm(although I also want to note that Bayer is being compensated, whether fairly or not is arguable. Early in this thread this was not acknowledged). Smuggling may be a possibility that would reconcile both our viewpoints?
Neither side has reason to mention it, really. The case legally does not get influenced by that one way or the other. Bayer wants to defend its IP in toto, not qualified, and India has no motivation to flaunt it. I’ll believe your WTO cite: if allowed domestically then it is allowed for export. (So long as the receiving country does not make it itself and allows it.)
Conclude as you will.
No reason to believe hepatocellular carcinoma rates in India changed much all of the sudden.
Curious why you’d think 10% of the population could afford an end of life care add-on to what they have already spent on cancer care of over $2000 when that is 10% of annual income at the 1%er level and almost twice as much as the urban top 5% spend in a year and 4x as much as the rural top 5% do. Yes that would still be a smallish market but what is your logic for that?
Of course it may be moot if this gets China to start doing the same as India …
Those are general statements and rules. The cite I provided was specific to this ruling. Do you have any reason to disbelieve it, apart from your analysis of India’s domestic market size? I have good reason to disbelieve estimates of incidence of cancer in India, particularly if, as you say, this particular cancer affects the poor more than the rich. The grim reality in India is that the majority of poor people, I’d say upto 50% are unlikely to see a doctor who would make the correct diagnosis. Almost all cancer incidence rates in India are extremely low, and my suspicion is that there is a problem with the data, not some magical exemption for Indians.
The data you’ve linked to and that you use for estimates of income is actually data I work with a lot. There are issues that make it problematic for market sizing something like this. Most importantly, it measures monthly consumption, not income. Another issue with that data is that it samples the upper end of the distribution very poorly, since one of the primary uses of the survey is to construct estimates of how the poorest live. I can cite that if you wish, but I’ll have to dig around for it, and I’d much rather you take my word for it. I understand if you don’t find that convincing. This is the internet after all.
Here’s another pdf that I dug up with income distribution. http://pdf.wri.org/hammond_india_profile_xls.pdf
It’s slightly old, but you’ll see that there’s around 10% households making more than 6000 USD a year. That sounds quite likely to me, and probably on the low side.
