11 ms·
Bayer CEO: Nexavar cancer drug is for "western patients who can afford it.”
- mullingitover 13y ago> Bayer Chief Executive Officer Marijn Dekkers called the compulsory license “essentially theft.” He's a bit mixed up. Government enforcement of your temporary monopoly is a privilege. Failing to give you the privilege you think you deserve is not the same thing as stealing from you.
- slaxman 13y agoMay be I am over reacting, but I feel that he has no respect for the laws of the country where he wants to do business. I am sure Bayer knew how the patent system in India works before they entered the market.
- mbreese 13y agoMaybe I'm missing some history, but I don't think that Bayer ever wanted to enter that market. He doesn't want to do business in India. This basically says that if you aren't in the Indian market or aren't offering your product for a price that India agrees with, your IP protection is meaningless. This starts to get murky from an ethical point of view because we are talking about a cancer medication, and I doubt that software IP would fall under the compulsory licensing. But, cancer drugs are expensive to develop. Bayer should absolutely be afforded some IP protection to recoup the costs of developing the drug. Otherwise, they'll just stop; or more likely, just increase the prices elsewhere around the world. I'm sure that Bayer isn't as concerned with losing the Indian market for the drug. But rather, they should be more worried about the Indian generic version of the drug hitting the international market.
- cma 13y ago" or more likely, just increase the prices elsewhere around the world." Are you saying they will make more money by increasing prices around the world? If so, why wouldn't they do that regardless of India's decision? They basically ignore supply/demand curves until India makes them angry? Or are you making some weird argument where they have to raise their prices in the face of medical tourism as opposed to the lowering everyone usually assumes?
- mbreese 13y agoLet's say the drug cost $1 billion to develop (factoring all of the other drugs that failed that they also need to pay for). Now they price that out so that they can recoup that $1 billion over the lifetime of the patent, plus a reasonable profit (remember these are public companies). Let's say that they want to sell the drug in India, and expect to get $50 million out of that market. Now, since India is no longer a market for the drug, the amount of money that Bayer needed to make from India needs to be made from the rest of the world. That's $50 million more that the rest of the world will need to spend to subsidize India. Even worse - what happens if the Indian generic form of the drug hits the international market? Now Bayer needs to recoup even more from the remaining international patients/insurance. Or, what happens if patients from wealthier countries start going to India for treatment instead of staying home? Even more that Bayer needs to charge the rest of the world. They need to make a profit to finance their next drugs in their pipeline. The cost savings in medical tourism are usually attributed to lower labor and facility costs, not necessarily cheaper drugs.
- cma 13y agoSorry no. They don't price things so they can recoup a fixed amount + a reasonable profit. Do you really think they say hmm we could price it a little higher and make more but we'll just stick to a reasonable profit. Likewise do you think consumers say, wow they spent a billion dollars developing this, therefore I am willing to pay them ($1 billion + 20% reasonable profit)/(total number of units sold)? That's not how supply and demand works. Drug companies price it to make the most on it regardless of any sunk costs. Why would thyley choose to make more or less money based on whether they are currently angry at India? They will always choose more or the shareholders can actually sue the board for abandoning their interests.
- mbreese 13y agoOver the long term... yes, they do try to recoup the costs of developing a drug and a reasonable profit. I was deliberating simplifying things. Over the short term, the costs of developing a drug are a sunk cost that has already been financed using the profits from the previous round of drugs. They try to get as much out of the market as they can with their current lineup of drugs so that they can pay for the pipeline that is developing the next round. Over the long term over many drugs on the market, they are hoping that they are able to make a reasonable profit. They have to recoup the costs of developing each drug (including the ones that failed before getting to market). And to satisfy shareholders, they try to make as much profit as they can. The amount that Pharma charges is based on a variety of factors, but you're right that it is largely what the market will bear in the presence competing drugs. For a cancer drug, the amount is whatever the insurance companies will pay. And that amount is always negotiated. The market will determine what is reasonable. However, they still have a giant research and development machine that must be financed. If they aren't making enough on their current drug lineup, a company either needs to charge higher prices or slim down their drug development pipeline.
- Crito 13y ago> This basically says that if you aren't in the Indian market or aren't offering your product for a price that India agrees with, your IP protection is meaningless. That seems reasonable. Why should we expect India to grant privileges to a company that wants nothing to do with India? They are giving India no reason to give a shit. If Bayer has an issue with Indian generics getting into countries that it does have an interest in doing business in, then Bayer can appeal to those countries to block the import of those generics.
- pgeorgi 13y agoThat Indian generic sold elsewhere would be subject to patent licenses active elsewhere, payable to Bayer. If people try to get it across borders without paying the license, customs are generally quite helpful with collecting such contraband.
- warfangle 13y agoDying of cancer is more expensive than developing a cure, if you're ethical and think life is more important than money.
- cynix 13y ago> This starts to get murky from an ethical point of view because we are talking about a cancer medication, and I doubt that software IP would fall under the compulsory licensing. But, cancer drugs are expensive to develop. Bayer should absolutely be afforded some IP protection to recoup the costs of developing the drug. Otherwise, they'll just stop; or more likely, just increase the prices elsewhere around the world. If they wanted to make money in the Indian market and be afforded IP protection, they could've priced the drug reasonably. Surely a smaller profit is better than no profit?
- barking 13y agoYou could say the same thing about anything anyone owns. For government read society. Drug companies risk a lot of money in research. The prospect of reward is why they do it Society has determined that it's a good thing (for society) to reward certain types of risk takers. Take that 'privilege' away and society will suffer.
- larubbio 13y agoAlthough I'm sure there has to be more to this story. If Bayer wasn't going to sell the drug in India (since it wasn't made for Indians) has that 'privilege' been taken from them? They still have monopoly rights elsewhere in the world. It does make me wonder why, in an attempt to capture more revenue, it isn't being released and priced locally in the Indian market? I'm guessing fears of re-export degrading sales in the western world?
- timbre 13y agoDifferent societies have determined different things. Indian society in particular has determined that reducing this reward to risk-takers in order to widen access to drugs is a worthwhile trade.
- throwaway_yy2Di 13y agoArguably the monopoly is intrinsic: pharma companies have the pre-existing ability to hide the product of their R&D, e.g. by only selling it in closed clinics, or by obfuscating pills with thousands of inert ingredients ("DRM for wetware"). In this view, monopoly rights are granted to extract the social benefit of public disclosure. (And "disclosure" still minimal and ineffective: pharma is massively secretive about their research -- rationally -- which certainly isn't globally optimal).
- scotty79 13y agoAnd the goverment by the virtue of having tanks and jets and soldiers has intrinsic monopoly to decide what are the rules that have to be observed to even be allowed access to the market of given country.
- deleted 13y ago[deleted]
- gus_massa 13y agoThe companies can move to another country. One with more nuclear bombs! And force the people from the other country to travel if they want the treatment.
- scotty79 13y agoYes, you can migrate to country with fewer rules and not operate on other markets. Like a brothel with underaged prostitutes that people from other countries travel to to buy services disallowed on their native markets. In practice it doesn't work that great. Stronger countries with richer customers tend to use their leverage and have more rules. It definitely works for illegal products but I doubt it would work for goods that are legal but coming from manufacturer who's illegal. Goods would got cloned by legal manufacturers pretty quick if they were so good they'd be worth traveling for.
- deleted 13y ago[deleted]
- jpttsn 13y agoI'm personally against IP and I don't think he has a right to the temporary monopoly. If the government shut down all patents, I don't think he'd be right to call it theft. Still, perhaps he has some sort of point. The way he government selectively disables this provision has a tinge of dishonesty about it. Perhaps it could be argued he has the right to an equal monopoly protection relative to others.
- wlievens 13y agoJust curious: how would an economy work in you hypothetical world where intellectual property does not exist? Honest question.
- gnaritas 13y agoThe same way it did before we introduced the absurd notion that someone can own an idea. Innovation will flourish as constraints are removed and expensive stuff will shift to public funding or crowd funding rather than private funding. Rich people trying to make a killing is hardly the only place to find money these days.
- wlievens 13y agoIntellectual property is about much more than patents. Are you seriously saying that if I copy your work directly (eg source code) and rebrand it, I'm not doing anything wrong? Just innovating?
- gnaritas 13y agoI'm saying we've pushed the notion of IP too far when I can't see your work and duplicate it on my own without running foul of some bullshit patent. I'm fine with the general idea of copyright, but not it's implementation. But software patents, hell no. Patents on drugs, hell no, patents on processes to make those drugs, maybe, but not on the drug itself. People should be free to reverse engineer anything without violating the law. Reverse engineering should never be illegal. Ideas should not be own-able. Your software is not an idea, it's an implementation of an idea, you should get some protection of your implementation, nothing more. If someone else can do it better, or at all, they should be able to. Ideas are not property, copying an idea is not theft.
- huhtenberg 13y agoWitty sarcasm much? Without this "privilege" a company has no incentive to develop anything new, leave alone anything that requires massive R&D investments. What India did is it effectively said that they don't want to participate in the development of new drugs, so their stance on this matter is frankly quite ludicrous. Try this for a comparison - Germany declares that all software sold in their country should be priced at $1 or less. Would you still be talking about software companies being crybabies for objecting this? Doubt it.
- hobs 13y agoI think something that hasn't been mentioned is how much they spent to develop the drug, and how much they expect to recoup. If someone has to take a drug for 3 years and pays 195,000 dollars, and there are tens of thousands of patients, they can certainly price it lower than that. If the price per year is 1950 (3%) and a million people are using the drug, that that 1.95 billion dollars. Per Year.
- nostromo 13y agoIt's important to remember that you're not just paying for the successful drug. You're paying for all of the unsuccessful ones as well.
- rayiner 13y agoWhat is "theft" other than something that only exists in the context of government enforcement of an artificial privilege? And is this privilege particularly artificial relative to others we accept readily? Most people believe that people should have the privilege to own land. Yet if you think about it, land possession is far less deserving of the government's protection than a drug formula. This drug is something Bayer created, that didn't exist before. Land is something that nobody created, that people simply claimed (in the U.S., those who "own it" derive their ownership from dispossessing Indians), that will continue to exist long after everyone who claims to "own it" is long dead. Why is land more deserving of an artificial government monopoly than a drug formula?
- larubbio 13y agoGovernments can take your land through Eminent Domain if it is shown to benefit society as a whole. Also is the government "taking" the drug, or just not extending monopoly patent rights for it? Also even patents (in the US) have a provision that they be reasonable licensed in exchange for gaining the temporary monopoly.
- tokenadult 13y agoGovernments can take your land through Eminent Domain if it is shown to benefit society as a whole. By the United States Constitution, in the United States such a taking must be with compensation (reasonable, market-based compensation). And the same is true in most democratic countries with an independent judiciary. (This is notably not true in China, which is why seizing land from peasants is a favorite way for corrupt local officials to enrich themselves.)
- larubbio 13y agoCorrect, I called out the provision that patents must be licensed at a reasonable rate in the attempt to draw the parallel with the reasonable market rate compensation for eminent domain, but left that portion out by accident. Thank you for calling it out.
- 13y ago
- slaxman 13y agoI think one thing that India has got right is the patent system. As I understand, you can't patent as product in India, you can only patent the process. Thus multiple companies can have multiple process patent on the same product. This actually encourages innovation and keep prices low (especially for drugs). $65,000 is extremely expensive considering that the average annual income in India is a mere $2000.
- melling 13y agoAm I missing something because I'm not sure that a lot of new drug research is coming out of India. It would be great if there was because we could probably double the amount of new medicines.
- Daishiman 13y agoYou would have to prove that there would be more drug development in India without the current process, and I really doubt it would change anything.
- denzil_correa 13y agoOTOH, The bureaucracy in the patent application process is a sorry state of affairs. The US PTO normal applications are processed faster than India PTO expedited applications.
- ta43434 13y ago
- johngalt 13y agoIt's interesting to see protectionism V2.0 play out via the patent system.
- obblekk 13y agoI know most people will oppose this, but what about the massive financial investment that Bayer took in development that the Indian company Natco didn't take. Surely Bayer should get some sort of payback.
- alex_c 13y agoEven if it's true, it's an absolutely boneheaded thing for a CEO to actually say.
- yumraj 13y agoThey absolutely should be compensated - they always had the option of licensing it in India, or simply pricing it appropriately and benefit/reaching a much much larger market and make it up on volume. They decided to do neither.
- noonespecial 13y agoAs long as we're talking about what ought to be: Should the model we have be incentivizing the recoupment of investments using the threatpoint of death to extract maximum resources from choiceless "customers"? However we do it, the answer to "how much will it cost?" when it comes to medicine needs to stop being "how much do you have?"
- gaius 13y agoMaybe India could fund its own NHS instead of nuclear weapons and space missions? India is a country that likes to play poor when there's some advantage to be had, but it's a facade.
- denzil_correa 13y agoIn case, if people missed this part The U.S. government has weighed in on the side of Bayer in the patent case, at the highest levels of the India and the US governments. What can be the possible reason?
- atonse 13y agoPretty simple to deduce. Bayer is probably a pretty big donor to various politicians. I wouldn't be surprised if high-level US officials have tried to pressure Indian officials with other things to make sure this works for American companies. They've done it time and again with copyright law.
- sailfast 13y agoIf United States patents can be discarded at will by global markets, it creates serious intellectual property concerns for research and development groups in the US. Without a possible profit incentive, what will incentivize drug companies to spend billions on cancer medication or other research if the compound will be lifted from them the next day and sold at pill cost, not compounded R&D cost? It's definitely in US interests (both public and private sector) to strengthen the value of a US patent and US patent law globally. Why would a government not argue in favor of this?
- rhino369 13y agoSo much of what America produces is intellectual property. If India wants to take it without paying, when then America should stop buying Indian products. The problem is both sides are being assholes here. Bayer is charging WAY to much for the Indian market, but the compulsory license is way too cheap.
- liquidise 13y agoLegalities of all this aside, these comments perpetuate many of the worst stereotypes of major pharmaceutical companies. This will not be smoothed over lightly.
- shill 13y agoThis is the same company that sold off their stock of HIV contaminated medicine to hemophiliacs in Asian and Latin America in the mid 1980s while a newer version was sold to western patients.
- jack-r-abbit 13y agoAlso the same company that sued the European Commission over a ban on pesticides that are killing bees.
- jpttsn 13y agoDirect statements indeed. The honesty is refreshing, even if it will naturally be countered for weeks by PR. It's interesting to gain some insight into how this sort of person views the world.
- nova 13y agoWe need an alternative mechanism to fund medical research. Granting artificial monopolies aka patents isn't cutting it, and it's getting highly unethical. Given that what we currently have isn't a free-market approach at all I wonder why we couldn't just fund it directly, via taxes. The cost could be shared between countries AND the research could be directed. The companies could be pure R/D labs, leaving the manufacturing to others.
- DennisP 13y agoOne group that would benefit from cheap patent-free drugs is health insurers. It would probably be worthwhile for them to fund development, except they have a public goods problem. Insurers who didn't contribute could freeload off those who did. Recognizing that, Bernie Sanders introduced a bill a couple years back, taxing insurers for patent-free drug development. To keep the government from picking research projects (which it tends to do very conservatively), it would fund prizes instead of funding research directly. http://boingboing.net/2011/05/27/bernie-sanders-intro.html http://boingboing.net/2011/05/27/bernie-sanders-intro.html
- pravda 13y ago>One group that would benefit from cheap patent-free drugs is health insurers. Um...exactly the opposite. Under the ACA "the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders." So, if an insurance company spends $65,000 on a drug, they get 65k/.85 or $76,470 in premiums, earning $11,470 in profit. If the drug only cost $10,000 the profit would just be $1,764. The more expensive drugs are, the more money health insurers make. Health insurers are harmed by cheap patent-free drugs.
- DennisP 13y agoHmm. Hadn't updated my view to account for the ACA. That could be a problem for healthcare costs in general, in markets where competition among insurance companies is limited. I bet we end up changing that provision sooner or later.
- codegeek 13y ago"At a daily dose of 4 tablets, this comes to $5,637 per month," "..is for western patients who can afford it" Oh the irony, at least in the US. How many can actually pay $5,637 per month out of their own pockets if not for health insurance which is mostly subsidized by your employer if you are lucky enough to have a job. On the other hand, India is still more of a "I pay you out of pocket, how much do you charge" system. Having said that, I am not necessarily saying that protecting your IP/inventions is a bad thing. But before you start comparing countries/markets, make sure you have enough knowledge of how a particular market operates.
- DennisP 13y agoNow that the ACA is in force, you don't need an employer. Just go on the healthcare.gov or your state's equivalent, buy a plan with no worry about pre-existing conditions, and get a max annual out-of-pocket of several thousand dollars. If your income is low enough you'll even get your premiums subsidized. (But personally I'm against pharma patents. There are ways to solve public goods problems other than turning them into private goods.)
- grecy 13y agoAmerica is certainly nowhere near the top of Developed western countries, so maybe they're not even talking about Americans when they say "..is for western patients who can afford it"
- scott_karana 13y agoMoney is typically the criteria used for "if you can afford it". American still has the greatest GDP, and the the greatest household income (average and median, as I recall).
- grecy 13y ago> Money is typically the criteria used for "if you can afford it". I would dispute that and say "spending money" is the criteria used for "if you can afford it". Income means nothing if you have to spend it all just to live. I doubt the average American has has much spending money as people from Developed countries.
- fragsworth 13y agoI'm not sure what exactly the history of this product is, but my guess is it's a treatment that: 1) Cost a shitload to research 2) Is only applicable to a handful of patients If this is true, then I don't see what else they should do. If they aren't allowed to sell it at the price they want, then perhaps the research wouldn't have been funded in the first place?
- piyush_soni 13y agoIt's a life saving drug of last resorts. And considering the population of India, 'a handful' is too many :).
- tokenadult 13y agoThe first journalistic source to report the statement,[1] an article published by Bloomberg Business Week, includes the statement near the end of a general article on patent protection in India. Both the reporter and editor who put the story together are based in India and (at a wild guess, based on their names) are perhaps citizens of India. This sort of national policy issue, of course, often results in different countries coming up with differing laws. Then the countries have to resolve differences about their laws in negotiations when they look at overall trade between their countries. And that (nothing particularly nefarious) is all that is involved in the United States negotiating with India about this issue. I'm very glad that somebody is developing new medical treatments (both drugs and medical devices). All of that work is very expensive, and much of it results in products that never turn a profit. I can't think of any social justice reason why my childhood best friend, a first-generation college graduate from a working class family, who now develops medical devices, should have to work for free. Nor can I think of any social justice reason why anyone who needs effective medical treatment should be without it, in general, but until new medical treatments are invented, wishing doesn't make that so. India's approach to compulsory licensing on non-negotiated terms for new treatments developed outside India may be very politically appealing in India, but it's not completely clear that that is the best national policy for responding to the grave health problems[2] that still exist in India. [1] http://www.businessweek.com/news/2014-01-21/merck-to-bristol-myers-face-more-threats-on-india-drug-patents http://www.businessweek.com/news/2014-01-21/merck-to-bristol... [2] http://articles.economictimes.indiatimes.com/2013-06-23/news/40134749_1_stop-tb-department-mario-raviglione-jmm-meeting http://articles.economictimes.indiatimes.com/2013-06-23/news... http://online.wsj.com/news/articles/SB10001424052702303444204577460734274201756 http://online.wsj.com/news/articles/SB1000142405270230344420... http://www.iom.edu/Reports/2012/Facing-the-Reality-of-Drug-Resistant-Tuberculosis-Challenges-and-Potential-Solutions-in-India.aspx http://www.iom.edu/Reports/2012/Facing-the-Reality-of-Drug-R... http://www.tbcindia.nic.in/pdfs/RNTCP%20Response%20DR%20TB%20in%20India%20-%20Jan%202012%20update.pdf http://www.tbcindia.nic.in/pdfs/RNTCP%20Response%20DR%20TB%2... AFTER EDIT: I see some wild karma swings on this comment, so feel free to tell me what you really feel about this comment. India, of course, would have no objection to how drug companies market drugs if only it had a country full of companies that are already innovating affordably to solve all the health problems of India.
- joesmo 13y agoBasically, what Bayer is asking is for India to enforce US patent law and to not enforce Indian patent law (which allows this exception). It doesn't help that Bayer's CEO comes off as extremely racist: '“We did not develop this medicine for Indians”.'
- deleted 13y ago[deleted]
- refurb 13y agoUtterly ridiculous statement and you're clearly showing you're lack of understanding of the industry. The latest research I saw had 2/3 of new drug developed at both biotech and pharma companies. Only 1/3 came from academic settings and that only includes discovery of the lead, which is about 1/10th of the work required for a new drug and at a cost of a about 1% of the total for R&D.
- icegreentea 13y agoWent digging through for past articles. This has been a long-running situation. For context, Nexavar was patented in India in 2008 (it's first FDA approval, for advanced liver cancer was granted in 2007, a process started in 2004). According to this article [1] from last year, Bayer was running a program that gave ~70% of Nexavar users a 90% discount from their in India market rate ($5500 USD monthly). The generic maker sells at $176 monthly, and per licensing fees, pays Bayer 6% of net sales. Also, about the nature of the drug. It's basically a treatment of last resort. The initial study that granted it FDA approval for in advanced liver cancer showed a 3-4 month increase in median survival time compared to placebo (remember, this is with cases that have exhausted other options). Further studies show some greater synergistic effects combined with other treatments. Also, in a study with a smaller population, and slightly different subtype of liver cancer showed an overall median survival time of 26 months (it's unclear to me from reading the abstracts how the baseline conditions of the two trial's patients compare, so it's difficult to directly compare their results). [1] http://www.thehindubusinessline.com/companies/bayer-to-appeal-against-indias-patent-ruling-on-nexavar/article4484568.ece http://www.thehindubusinessline.com/companies/bayer-to-appea...
- veidr 13y agoIndia's setting a great precedent by granting exclusive rights granted by a patent only in combination with a requirement that the result be reasonable. I think this kind of tweak to the patent system should be extended beyond medical life-or-death kind of products. Our society grants these exclusive rights under certain conditions, because as a society we believe doing so benefits us all. There is no inherent natural right to have a patent (unlike what this bozo seems to believe), it is an artificial construct humans made up to improve society. There is no reason we shouldn't tweak the parameters of patentability and the benefits received on an ongoing basis.
- ExpendableGuy 13y agoJust thought I'd share this for context: > "It takes about 10-15 years to develop one new medicine from the time it is discovered to when it is available for treating patients. The average cost to research and develop each successful drug is estimated to be $800 million to $1 billion. This number includes the cost of the thousands of failures: For every 5,000-10,000 compounds that enter the research and development (R&D) pipeline, ultimately only one receives approval." Source: http://www.innovation.org/drug_discovery/objects/pdf/RD_Brochure.pdf http://www.innovation.org/drug_discovery/objects/pdf/RD_Broc...
- refurb 13y agoThis is one hell of a hit piece. I'd love to see the actual quote from the CEO since this has gotten ZERO press in the mainstream media. I'm assuming he meant the drug was priced for westerns who could afford it, not that the company would prefer if Indians with cancer would just die. The thing that makes me laugh about the IP struggle going on in India is that Indian companies who have developed their own generic versions have often priced their drugs not much lower than what western companies have[1]. This isn't about providing access to medicines (since many western companies, including Bayer, have patient assistance programs that offer free drug to Indians), this is about protecting and supporting the Indian pharmaceutical manufacturers. [1] Biocon just launched their biosimilar version of Genentech's Herceptin. Genentech's price in India is $1,366 per month while Biocon's is $933 per month, still well out of the reach of most Indians. http://www.bloomberg.com/news/2014-01-20/roche-herceptin-copy-s-price-still-out-of-reach-in-india.html http://www.bloomberg.com/news/2014-01-20/roche-herceptin-cop...