5 ms·

From Times of India [1]: "Cipla, which has 23 oncology drugs in its portfolio, has been able to offer the price advantage because of backward integration and r

by nhebb 14y ago

From Times of India [1]: "Cipla, which has 23 oncology drugs in its portfolio, has been able to offer the price advantage because of backward integration and reverse engineering, its chairman Y K Hamied told TOI" I'm not sure what backward integration means, but the part about reverse engineering implies these are not drugs that they spent a large sum on R&D. It makes the moral hazard of capitalism vs compassion less hazardous when you copy someone else's product. [1] http://timesofindia.indiatimes.com/business/india-business/Cipla-may-cut-prices-of-other-cancer-drugs-too/articleshow/13004180.cms http://timesofindia.indiatimes.com/business/india-business/C...

jandrewrogers 14y ago
Reverse engineering drugs is straightforward and relatively trivial. There is no correlation between ease of reverse engineering and R&D cost. The very high cost comes from development of a drug candidate, not the initial discovery of a candidate. If you skip the part where they demonstrate that the chemical is effective, efficient, and safe for its intended purpose in large human populations then you are correct. At that point it is just a moderately low-cost chemical manufacturing problem. However, I only see them copying drugs where someone else spent billions of dollars demonstrating safety and effectiveness. There are myriad drug candidates that no one has proven safe and effective that they are not copying because that would require real investment on their part.
- medstudent 14y ago
  Uhm, "Reverse engineering drugs is straightforward and relatively trivial". Any proof to backup your claim? "spent billions of dollars demonstrating safety and effectiveness". Really? How much of the corporate koolaid have you drunk? Have you heard of Vioxx? Numerous other drugs being recalled. http://en.wikipedia.org/wiki/Rofecoxib http://en.wikipedia.org/wiki/Rofecoxib Have you heard of how intertwined the FDA and lobbyists are? Sheesh.
  - jandrewrogers 14y ago
    Reverse engineering a drug is simple for a couple reasons. First, the compound is clearly described in the patent. Second, chemical analysis of so-called "small molecule" compounds is a basic skill every chemistry undergrad learns. The most difficult part is probably designing the production synthesis process but even that is routine for people who do that kind of thing (chemical engineers).
rendezvouscp 14y ago
FYI, the term “backward integration” is used in business to talk about a company’s integration with its suppliers, while “forward integration” is used when talking about removing friction with customers. In Cipla’s case, it looks like they purchased manufacturing facilities that were producing their products: http://www.vccircle.com/500/news/cipla-to-acquire-meditab-for-rs-133cr http://www.vccircle.com/500/news/cipla-to-acquire-meditab-fo...
demigod 14y ago
I remember reading on HN sometime ago about the Mumbai High Court verdict that allowed life saving drugs to be reverse engineered and this was what allowed the Indian companies to copy the drugs. However lifesaving the drugs maybe, this would cause the multinationals developing the drugs to increase costs so they dont lose their R&D investment while the Indian companies make a quick buck on someone else's research. The goverment should have subsidised the drugs which would have been a balance between capitalism and compassion.

by nhebb 14y ago

jandrewrogers 14y ago

Reverse engineering drugs is straightforward and relatively trivial. There is no correlation between ease of reverse engineering and R&D cost. The very high cost comes from development of a drug candidate, not the initial discovery of a candidate. If you skip the part where they demonstrate that the chemical is effective, efficient, and safe for its intended purpose in large human populations then you are correct. At that point it is just a moderately low-cost chemical manufacturing problem. However, I only see them copying drugs where someone else spent billions of dollars demonstrating safety and effectiveness. There are myriad drug candidates that no one has proven safe and effective that they are not copying because that would require real investment on their part.

medstudent 14y ago
Uhm, "Reverse engineering drugs is straightforward and relatively trivial". Any proof to backup your claim? "spent billions of dollars demonstrating safety and effectiveness". Really? How much of the corporate koolaid have you drunk? Have you heard of Vioxx? Numerous other drugs being recalled. http://en.wikipedia.org/wiki/Rofecoxib http://en.wikipedia.org/wiki/Rofecoxib Have you heard of how intertwined the FDA and lobbyists are? Sheesh.
- jandrewrogers 14y ago
  Reverse engineering a drug is simple for a couple reasons. First, the compound is clearly described in the patent. Second, chemical analysis of so-called "small molecule" compounds is a basic skill every chemistry undergrad learns. The most difficult part is probably designing the production synthesis process but even that is routine for people who do that kind of thing (chemical engineers).

rendezvouscp 14y ago

FYI, the term “backward integration” is used in business to talk about a company’s integration with its suppliers, while “forward integration” is used when talking about removing friction with customers. In Cipla’s case, it looks like they purchased manufacturing facilities that were producing their products: http://www.vccircle.com/500/news/cipla-to-acquire-meditab-for-rs-133cr http://www.vccircle.com/500/news/cipla-to-acquire-meditab-fo...

demigod 14y ago

I remember reading on HN sometime ago about the Mumbai High Court verdict that allowed life saving drugs to be reverse engineered and this was what allowed the Indian companies to copy the drugs. However lifesaving the drugs maybe, this would cause the multinationals developing the drugs to increase costs so they dont lose their R&D investment while the Indian companies make a quick buck on someone else's research. The goverment should have subsidised the drugs which would have been a balance between capitalism and compassion.