6 ms·

India firm shakes up cancer drug market with price cuts

84 points by deadbea7 14y ago

drsim 14y ago
The world needs more people like him: in a position of power with the guts to stick it to companies who put money before humanitarianism.
- deadbea7 14y ago
  I would also give credit to Indian patent laws that allow people like him to shake things up. "In 1972, India made only the process for making drugs patentable, not the drugs themselves." Compare this to the US where I believe you can patent the active ingredients of a drug, allowing pharmaceuticals to charge more for lifesaving medicine for a longer period of time.
  - mistercow 14y ago
    Wow, that's a really smart policy on several levels. Besides not stifling competition regarding individual drugs, it encourages companies to develop new methods of synthesis, which has potential side benefits like making the market less fragile against shortages of raw ingredients.
    - uvdiv 14y ago
      It also sets the value of discovering new drugs at $0. What's smart about that?
      - mistercow 14y ago
        Really, you think the value of having a monopoly on the only known process for making a drug and being first to market with that drug is $0?
        smallblacksun 14y ago
        Not 0, but vastly less than the cost of discovering and getting approval for a new drug. The vast majority of medical compounds are not particularly difficult to synthesize, meaning that the value of the process patent is relatively small. Once you release the drug, you will only have a very brief period before a competitor is able to come to market. In particular, they will not need to undergo clinical trials, which are very long (multiple years) and expensive (often hundreds of millions of dollars).
        mistercow 14y ago
        >Not 0, but vastly less than the cost of discovering and getting approval for a new drug. I'm going to need to see some hard data on both sides before I'll simply accept that claim. There are also alternative solutions we could use besides granting the first company a total monopoly. For example, generics could be taxed early on in order to subsidize the approval process for new drugs.
        refurb 14y ago
        Really? You'd tax the makers of generic drugs and then give that money to the big drug companies to subsidize their R&D? Waston pharmaceuticals, one of the largest generic drugs makers in the US has total sales of $4.6B. Pfizer, one of the biggest drug companies in the world, has an R&D budget of $8.5B. Even if you doubled the price of all of Waston's drugs through a tax and gave that to Pfizer, you wouldn't even cover half of their R&D expense. Without a patent system, there would be zero incentive to create new drug. A drug company could spend $100M to get a new drug to market and with the typical 8 years of patent life, charge the exact price (let's say $100/month, with $90 being profit) to recoup their expenses (no long-term profit). It would be a SIMPLISTIC exercise for another company to come in and starting selling the drug for $20/month and make $10 in profit, having the benefit of never coming up with the $100M to get the drug approved. I agree that there are alternatives to the current patent system, but like democracy, "it may not be perfect, but it's the best system so far".
        14y ago
      - kamjam 14y ago
        Well, that's the same value the big pharma's put on human life when it can't afford their high priced drugs, so I don't see anything not smart about it.
  - deleted 14y ago
    [deleted]
  - deleted 14y ago
    [deleted]
  - boundlessdreamz 14y ago
    From the article "But in 2005, India brought its law in line with World Trade Organization (WTO) rules recognising 20-year patents, pushing up the prices of newly launched drugs."
- ig1 14y ago
  The problem is that if these drugs end up entering the grey market in the developed world, it disincentives investment in the next generation of drugs. Huge amounts of money have to be raised to make a new drug. The cost of bringing a new drug to market is typically $800m-$1.2bn (i.e more than exit value of Instagram or Yammer is required just to get to launch). With treatments for viruses it gets even more problematic, in developing countries where regulations and medical practices are lax, a large number of people taking drugs in an uncontrolled manner can allow viruses to mutate making the drugs ineffective for everyone. The issue isn't as simple as good vs evil as the article makes out. There are complex ethical, economical and medical issues here and this article completely ignores that.
  - accountswu 14y ago
    Whatever the complexities of the system, the bottomline is that for-profit corporations should not be allowed to milk medical "consumers" the way they are allowed in the US. If the US can bail out the banksters with trillions of dollars (yes, the Federal Reserve printed trillions and gave it to corporations, not just American banksters and corporations but to corporate buddies all over the world), why must an American patient pay 10-100 times the price charged by the same company in Mexico? That for a medicine that is more than a decade old?! The US government (read taxpayers) paid milions to GM in bailout money in the last week of September 2008, GM opened a new plant in St. Petersburg, Russia in the first week of October 2008. How is it all not as simple as good vs evil? Could the trillions of dollars of taxpayer bailout money not be spent on providing healthcare to all Americans and their generations to come? When they fail we all need to chip in, when they succeed (say their drug is successful) we all have to pay for their profits. Anyone remember the millions of dollars Rumsfeld made over the bird flu scam? Remember Tamiflu? Bird flu killed a fraction of the number of people routinely killed by common cold and malaria around the world but the UN rushed to declare it a pandemic and that translated into billions of Dollars of purchases of medication from governments around the world. The medication did not even provide the defense it claimed to provide any way.
    - accountswu 14y ago
      Each statement above is a valid statement and you can verify it. No reply to the comment but down votes? I didn't know we also had banksters at Hackernews.
cdooh 14y ago
Why is Cipla able to produce the drug at a fifth the price? Can someone please explain how Western companies price their drugs? How much do they send on R&D, marketing and all that? I mean it doesn't really make them look good does it? P.S. Being from Africa I can testify to how much of a difference Cipla's 1dollar a day AIDS drugs make a huge difference!! Here in Kenya medication is given free of charge under government and NGO subsidies. AIDS is no longer a death sentence if you're poor.
- ashray 14y ago
  They don't do much R&D. Most of their drugs are copies of drugs that have been developed in western countries. The drugs are just reverse engineered and reproduced. This is pretty legal under Indian patent law and hence carries on, while Cipla, makes massive amounts of money by being just a drug manufacturer. They do save lives though :P
  - cdooh 14y ago
    I meant western companies how much do they send? I once read an article that suggested that even after they've made back the money spent on R&D they still keep their prices high to keep making a profit
    - ams6110 14y ago
      Well most people are not in business to just break even on their costs.
    - jeffool 14y ago
      As an example, GlaxoSmithKline spends 8.826M GBP/13.8683M USD on marketing/sales and cost of business, and 4.009 GBP/6.2993M USD on research. Most of them make this publicly available on their financial reports on their websites. http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.pdf http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.p... Page 136
- DufusM 14y ago
  From what I have heard from people who work in pharma companies in India, the main reasons drugs are cheaper when manufactured in India are: - not much R&D costs to design new drugs (however they do spend on designing the manufacturing process) - cheap labor for manufacturing, including a good supply of chemical engineers. - environmental regulations for chemical manufacturing are stricter in Western countries.
ashishgandhi 14y ago
Indian pharmaceuticals are a joke. They have zero inventions to their name. Their "secret" to selling drugs cheap lays in the following line from the article. "In 1972, India made only the process for making drugs patentable, not the drugs themselves." Do you really think this is smart? Heavy R&D costs are involved in coming up with compounds that save lives. If you only have the manufacturing process that's patentable then what happens is you can "reverse engineer" drugs as the article says. I would thought the significant majority of R&D costs is pertained to identifying compounds that cure. The cost of determining the process to manufacture these discoveries was less significant. cost to invent drugs = identifying compounds (90%, say) + determining manufacturing process (10%) With no way to recover[1] the 90% of the cost involved in inventing drugs you no only take away the incentive to invent drugs but you disincentivize it. I've lost family members to cancer and I would like my country's legislature to NOT disincentivize research for cancer or any other area. I'm not sure if there have been significant medical inventions here. I tried to look but couldn't find any. [1] You competitors will spend 10% of the cost to determine a different process to manufacture drugs and sell the compounds at tenth of your price and taking the market away from you. Edit: Down vote? Is it because of the dissent or is it because you think I'm wrong? I'm an Indian citizen and have the right (luckily) to dissent. If you think I'm wrong I would love to know what inventions have Cipla et. al been credited with.
- cdooh 14y ago
  Also speaking as someone who's lost friends to cancer, I'd not like it if the drug was there but out of my reach because it was too expensive. It's like looking through glass, you can see the other side but you can't get through
  - ashishgandhi 14y ago
    I don't believe the right answer to solving the cost problem is stealing (super) costly inventions. Cheaper and more widely accessible healthcare would probably be the more apt choice if you ask me. Debate about models such as free public healthcare, compulsory insurance, compulsory insurance where the government pays the difference that the less wealthy can't make up for, etc. would be more apt I feel. Also discussion about how to bring down cost of research can be fruitful. But without the incentive to invest in the huge cost involved with discovering drugs, you will have nothing to look at the other side, glass or no glass.
kamaal 14y ago
I've lost two People from my Family to Cancer. One a elder cousin sister of mine and another an Uncle. I was in my teens back then when it happened. There are huge obstacles to getting quality affordable health care in India. Costly drugs is one of them. But costly drugs isn't the problem, the problem is health insurance is an unknown aspect here even now to many ordinary middle class crowd. In case of my relatives, despite being in a urban city like Bangalore. We had trouble getting right doctors. Both patients, and relatives like us around them are hugely ignorant of what to do in case of big health problems. And this plays to the doctors advantage. The problem is there is a huge problem of capitation fee here. Students shell out ridiculous sums of money for even entry level MBBS courses. The net result is need to go for higher studies again to get a job in a god hospital or start their own clinic. By the time they do MBBS + Specialization course + Investments on clinics, they only way they can earn back that kind of money is by charging their patients ridiculously. There a lot of doctors who ask patients to undergo needless tests, even for some very simple things like fever these days. Doctors and Test labs both get commissions for tests they do. Doctors and Pharmacy shops get commissions for selling drugs what the Drug companies ask them to sell. Its like a huge nexus which acts as a burden on our contry's medical spending. So you will see a lot of tests and drugs prescribed for no reason. I have seen many Pharmacy Shops sell banned drugs. For example only recently did we know that a drug called Rosicon MF is a banned diabetic drug(http://en.wikipedia.org/wiki/Rosiglitazone http://en.wikipedia.org/wiki/Rosiglitazone), but my mom was taking it even 6 months after the ban. Blame this both on Ignorant doctors and Pharmacy shops. Although by God's grace nothing has happened so far. Another colleague of mine needs to his wife operated for Avascular Necrosis. It seems doctors here shouted on them when they discovered them doing pre research before the operation. And it turns out the doctors advised them a mode of operation, which requires a lot of post operative expenses, compared to other types which are better. Its things like this. I have myself faced the doctors wrath when they figure I am pre reading something about the disease while trying to help out a relative. Its almost like suffer at our hands or get lost kind of attitude. Healthcare is like a huge business, where doctors look to maximize their profits by hook or crook. Patients are largely very anxious and ignorant of what is happening to them. Drugs are costly, Every one in the business is out there to make money at without much regard to the patient. Pharmacy shops, surgeons, physicians, specialist, Test Labs its all mad rush for money. So drugs aren't really the only problem.
ajays 14y ago
An article that provides more background on the whole Indian drug patent stuff: http://www.medicusmundi.ch/mms/services/bulletin/bulletin200201/kap02/13gerster.html http://www.medicusmundi.ch/mms/services/bulletin/bulletin200... It's about 10 years old, but still has good information for those interested.

84 points by deadbea7 14y ago

drsim 14y ago

The world needs more people like him: in a position of power with the guts to stick it to companies who put money before humanitarianism.

deadbea7 14y ago
I would also give credit to Indian patent laws that allow people like him to shake things up. "In 1972, India made only the process for making drugs patentable, not the drugs themselves." Compare this to the US where I believe you can patent the active ingredients of a drug, allowing pharmaceuticals to charge more for lifesaving medicine for a longer period of time.
- mistercow 14y ago
  Wow, that's a really smart policy on several levels. Besides not stifling competition regarding individual drugs, it encourages companies to develop new methods of synthesis, which has potential side benefits like making the market less fragile against shortages of raw ingredients.
  - uvdiv 14y ago
    It also sets the value of discovering new drugs at $0. What's smart about that?
    - mistercow 14y ago
      Really, you think the value of having a monopoly on the only known process for making a drug and being first to market with that drug is $0?
      - smallblacksun 14y ago
        Not 0, but vastly less than the cost of discovering and getting approval for a new drug. The vast majority of medical compounds are not particularly difficult to synthesize, meaning that the value of the process patent is relatively small. Once you release the drug, you will only have a very brief period before a competitor is able to come to market. In particular, they will not need to undergo clinical trials, which are very long (multiple years) and expensive (often hundreds of millions of dollars).
        mistercow 14y ago
        >Not 0, but vastly less than the cost of discovering and getting approval for a new drug. I'm going to need to see some hard data on both sides before I'll simply accept that claim. There are also alternative solutions we could use besides granting the first company a total monopoly. For example, generics could be taxed early on in order to subsidize the approval process for new drugs.
        refurb 14y ago
        Really? You'd tax the makers of generic drugs and then give that money to the big drug companies to subsidize their R&D? Waston pharmaceuticals, one of the largest generic drugs makers in the US has total sales of $4.6B. Pfizer, one of the biggest drug companies in the world, has an R&D budget of $8.5B. Even if you doubled the price of all of Waston's drugs through a tax and gave that to Pfizer, you wouldn't even cover half of their R&D expense. Without a patent system, there would be zero incentive to create new drug. A drug company could spend $100M to get a new drug to market and with the typical 8 years of patent life, charge the exact price (let's say $100/month, with $90 being profit) to recoup their expenses (no long-term profit). It would be a SIMPLISTIC exercise for another company to come in and starting selling the drug for $20/month and make $10 in profit, having the benefit of never coming up with the $100M to get the drug approved. I agree that there are alternatives to the current patent system, but like democracy, "it may not be perfect, but it's the best system so far".
        14y ago
    - kamjam 14y ago
      Well, that's the same value the big pharma's put on human life when it can't afford their high priced drugs, so I don't see anything not smart about it.
- deleted 14y ago
  [deleted]
- deleted 14y ago
  [deleted]
- boundlessdreamz 14y ago
  From the article "But in 2005, India brought its law in line with World Trade Organization (WTO) rules recognising 20-year patents, pushing up the prices of newly launched drugs."
ig1 14y ago
The problem is that if these drugs end up entering the grey market in the developed world, it disincentives investment in the next generation of drugs. Huge amounts of money have to be raised to make a new drug. The cost of bringing a new drug to market is typically $800m-$1.2bn (i.e more than exit value of Instagram or Yammer is required just to get to launch). With treatments for viruses it gets even more problematic, in developing countries where regulations and medical practices are lax, a large number of people taking drugs in an uncontrolled manner can allow viruses to mutate making the drugs ineffective for everyone. The issue isn't as simple as good vs evil as the article makes out. There are complex ethical, economical and medical issues here and this article completely ignores that.
- accountswu 14y ago
  Whatever the complexities of the system, the bottomline is that for-profit corporations should not be allowed to milk medical "consumers" the way they are allowed in the US. If the US can bail out the banksters with trillions of dollars (yes, the Federal Reserve printed trillions and gave it to corporations, not just American banksters and corporations but to corporate buddies all over the world), why must an American patient pay 10-100 times the price charged by the same company in Mexico? That for a medicine that is more than a decade old?! The US government (read taxpayers) paid milions to GM in bailout money in the last week of September 2008, GM opened a new plant in St. Petersburg, Russia in the first week of October 2008. How is it all not as simple as good vs evil? Could the trillions of dollars of taxpayer bailout money not be spent on providing healthcare to all Americans and their generations to come? When they fail we all need to chip in, when they succeed (say their drug is successful) we all have to pay for their profits. Anyone remember the millions of dollars Rumsfeld made over the bird flu scam? Remember Tamiflu? Bird flu killed a fraction of the number of people routinely killed by common cold and malaria around the world but the UN rushed to declare it a pandemic and that translated into billions of Dollars of purchases of medication from governments around the world. The medication did not even provide the defense it claimed to provide any way.
  - accountswu 14y ago
    Each statement above is a valid statement and you can verify it. No reply to the comment but down votes? I didn't know we also had banksters at Hackernews.

cdooh 14y ago

Why is Cipla able to produce the drug at a fifth the price? Can someone please explain how Western companies price their drugs? How much do they send on R&D, marketing and all that? I mean it doesn't really make them look good does it? P.S. Being from Africa I can testify to how much of a difference Cipla's 1dollar a day AIDS drugs make a huge difference!! Here in Kenya medication is given free of charge under government and NGO subsidies. AIDS is no longer a death sentence if you're poor.

ashray 14y ago
They don't do much R&D. Most of their drugs are copies of drugs that have been developed in western countries. The drugs are just reverse engineered and reproduced. This is pretty legal under Indian patent law and hence carries on, while Cipla, makes massive amounts of money by being just a drug manufacturer. They do save lives though :P
- cdooh 14y ago
  I meant western companies how much do they send? I once read an article that suggested that even after they've made back the money spent on R&D they still keep their prices high to keep making a profit
  - ams6110 14y ago
    Well most people are not in business to just break even on their costs.
  - jeffool 14y ago
    As an example, GlaxoSmithKline spends 8.826M GBP/13.8683M USD on marketing/sales and cost of business, and 4.009 GBP/6.2993M USD on research. Most of them make this publicly available on their financial reports on their websites. http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.pdf http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.p... Page 136
DufusM 14y ago
From what I have heard from people who work in pharma companies in India, the main reasons drugs are cheaper when manufactured in India are: - not much R&D costs to design new drugs (however they do spend on designing the manufacturing process) - cheap labor for manufacturing, including a good supply of chemical engineers. - environmental regulations for chemical manufacturing are stricter in Western countries.

ashishgandhi 14y ago

Indian pharmaceuticals are a joke. They have zero inventions to their name. Their "secret" to selling drugs cheap lays in the following line from the article. "In 1972, India made only the process for making drugs patentable, not the drugs themselves." Do you really think this is smart? Heavy R&D costs are involved in coming up with compounds that save lives. If you only have the manufacturing process that's patentable then what happens is you can "reverse engineer" drugs as the article says. I would thought the significant majority of R&D costs is pertained to identifying compounds that cure. The cost of determining the process to manufacture these discoveries was less significant. cost to invent drugs = identifying compounds (90%, say) + determining manufacturing process (10%) With no way to recover[1] the 90% of the cost involved in inventing drugs you no only take away the incentive to invent drugs but you disincentivize it. I've lost family members to cancer and I would like my country's legislature to NOT disincentivize research for cancer or any other area. I'm not sure if there have been significant medical inventions here. I tried to look but couldn't find any. [1] You competitors will spend 10% of the cost to determine a different process to manufacture drugs and sell the compounds at tenth of your price and taking the market away from you. Edit: Down vote? Is it because of the dissent or is it because you think I'm wrong? I'm an Indian citizen and have the right (luckily) to dissent. If you think I'm wrong I would love to know what inventions have Cipla et. al been credited with.

cdooh 14y ago
Also speaking as someone who's lost friends to cancer, I'd not like it if the drug was there but out of my reach because it was too expensive. It's like looking through glass, you can see the other side but you can't get through
- ashishgandhi 14y ago
  I don't believe the right answer to solving the cost problem is stealing (super) costly inventions. Cheaper and more widely accessible healthcare would probably be the more apt choice if you ask me. Debate about models such as free public healthcare, compulsory insurance, compulsory insurance where the government pays the difference that the less wealthy can't make up for, etc. would be more apt I feel. Also discussion about how to bring down cost of research can be fruitful. But without the incentive to invest in the huge cost involved with discovering drugs, you will have nothing to look at the other side, glass or no glass.

kamaal 14y ago

I've lost two People from my Family to Cancer. One a elder cousin sister of mine and another an Uncle. I was in my teens back then when it happened. There are huge obstacles to getting quality affordable health care in India. Costly drugs is one of them. But costly drugs isn't the problem, the problem is health insurance is an unknown aspect here even now to many ordinary middle class crowd. In case of my relatives, despite being in a urban city like Bangalore. We had trouble getting right doctors. Both patients, and relatives like us around them are hugely ignorant of what to do in case of big health problems. And this plays to the doctors advantage. The problem is there is a huge problem of capitation fee here. Students shell out ridiculous sums of money for even entry level MBBS courses. The net result is need to go for higher studies again to get a job in a god hospital or start their own clinic. By the time they do MBBS + Specialization course + Investments on clinics, they only way they can earn back that kind of money is by charging their patients ridiculously. There a lot of doctors who ask patients to undergo needless tests, even for some very simple things like fever these days. Doctors and Test labs both get commissions for tests they do. Doctors and Pharmacy shops get commissions for selling drugs what the Drug companies ask them to sell. Its like a huge nexus which acts as a burden on our contry's medical spending. So you will see a lot of tests and drugs prescribed for no reason. I have seen many Pharmacy Shops sell banned drugs. For example only recently did we know that a drug called Rosicon MF is a banned diabetic drug(http://en.wikipedia.org/wiki/Rosiglitazone http://en.wikipedia.org/wiki/Rosiglitazone), but my mom was taking it even 6 months after the ban. Blame this both on Ignorant doctors and Pharmacy shops. Although by God's grace nothing has happened so far. Another colleague of mine needs to his wife operated for Avascular Necrosis. It seems doctors here shouted on them when they discovered them doing pre research before the operation. And it turns out the doctors advised them a mode of operation, which requires a lot of post operative expenses, compared to other types which are better. Its things like this. I have myself faced the doctors wrath when they figure I am pre reading something about the disease while trying to help out a relative. Its almost like suffer at our hands or get lost kind of attitude. Healthcare is like a huge business, where doctors look to maximize their profits by hook or crook. Patients are largely very anxious and ignorant of what is happening to them. Drugs are costly, Every one in the business is out there to make money at without much regard to the patient. Pharmacy shops, surgeons, physicians, specialist, Test Labs its all mad rush for money. So drugs aren't really the only problem.

ajays 14y ago

An article that provides more background on the whole Indian drug patent stuff: http://www.medicusmundi.ch/mms/services/bulletin/bulletin200201/kap02/13gerster.html http://www.medicusmundi.ch/mms/services/bulletin/bulletin200... It's about 10 years old, but still has good information for those interested.