DomainK Posted March 13, 2012 Posted March 13, 2012 MUMBAI: In a landmark decision that could set a precedent on how life-saving drugs under patents can be made affordable, the government has allowed a domestic company, Natco Pharma, to manufacture a copycat version of Bayer's patented anti-cancer drug, Nexavar, bringing down its price by 97%. In the first-ever case of compulsory licencing approval, the Indian Patent Office on Monday cleared the application of Hyderabad's Natco Pharma to sell generic drug Nexavar, used for renal and liver cancer, at Rs 8,880 (around $175) for a 120-capsule pack for a month's therapy. Bayer offers it for over Rs 2.8 lakh (roughly $5,500) per 120 capsule. The order provides hope for patients who cannot afford these drugs. The approval paves the way for the launch of Natco's drug in the market, a company official told TOI, adding that it will pay a 6% royalty on net sales every quarter to Bayer. The licence will be valid till such time the drug's patent is valid, i.e. 2020. As per the CL (compulsory licence) order, Natco is also committed to donating free supplies of the medicines to 600 patients each year. Bayer said it was "disappointed" and would "evaluate options to defend intellectual property rights" in the country. In July 2011, Natco had applied for the CL in the Mumbai patent office to make Sorafenib Tosylate for which Bayer has a patent in the country since 2008. Under Section 84, a compulsory licence to manufacture a drug can be issued after three years of the grant of patent on the product, which is not available at an affordable price. Under the World Trade Organisation TRIPS Agreement, compulsory licences are legally-recognized means to overcome barriers in accessing affordable medicines. This is the first time in the history of the Indian Patents Act, 1970, that the provision under Section 84 has been invoked. The patent office acted on the basis that not only had Bayer failed to price the drug at a level that made it accessible and affordable, it also was unable to ensure that the medicine was available in sufficient quantities within India. Controller general of patents, P H Kurian, based his decision on Bayer's admission that only 2% of kidney and liver cancer patients were able to access the drug, and its pricing (Rs 2.8 lakh for a month) did not constitute a "reasonably affordable" price. Since 2005, domestic drug manufacturers have faced formidable barriers in the manufacture of patented drugs, and this has been remedied by the compulsory licensing provision to prevent patent holders from having a monopoly over certain essential medicines. Interestingly, generic manufacturer Cipla has already launched generic Nexavar (Sorafenib Tosylate) at around Rs 28,000 per 120-capsule pack, and is embroiled in a dispute with Bayer in the Delhi high court. Economist and intellectual property expert James Love said, "The Bayer price of Rs 34,11,898 per year ($69,000) is more than 41 times the projected average per capita income for India in 2012, shattering any measure of affordability. Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details of its actual outlays on the research for Sorafenib, a cancer drug that was partly subsidized by the US Orphan Drug tax credit, and jointly developed with Onyx Pharmaceuticals. Bayer has made billions from Sorafenib, and made little effort to sell the product in India where its price is far beyond the means of all but a few persons." Dr Tido von Schoen-Angerer, director of independent healthcare organization, MSF, said, "We have been following this case closely because newer drugs to treat HIV are patented in India, and as a result are priced out of reach. But this decision marks a precedent that offers hope. It shows that new drugs under patent can also be produced by generic makers at a fraction of the price, while royalties are paid to the patent holder. This compensates patent holders while at the same time ensuring that competition can bring down prices." Those who take interest in IPR and patent laws will understand the significance of this. IMO, great job by the Indian government. :hatsoff:
Mariyam Posted March 13, 2012 Posted March 13, 2012 Those who take interest in IPR and patent laws will understand the significance of this. IMO' date=' great job by the Indian government. :hatsoff:[/quote'] As a signatory of the WTO, aren't IPR laws that are applicable to other signatories with regards to the pharma centre also applicable to us? Or is the entire pharmaceutical category under some 'special/protected' GoI list? Haven't read the entire article in detail yet. Maybe once I do that I'll have a clearer picture.
hari504504 Posted March 13, 2012 Posted March 13, 2012 Well done. Medicines should rightly be regulated seperately, finally hope this gets the government looking into the pricing of critical medications. Till recently medicine prices outside the 'essential medicines' list was unregulated (suppliers price it according to what they feel). This should come to an end soon.
anotherhawkeye Posted March 13, 2012 Posted March 13, 2012 Pretty impressed... good job by the government. I hate when governments start price control, but this is a rare case I approve of.
DomainK Posted June 18, 2012 Author Posted June 18, 2012 Now CIPLA takes an extraordinary step, unforeseen and unthinkable for most pharma companies, CIPLA has cut down cancer drug prices by more than 4 times leading to controversies among Pharma companies across the world. Well done CIPLA. :cheer: http://dawn.com/2012/06/17/india-firm-shakes-up-cancer-drug-market-with-price-cuts/
DomainK Posted June 18, 2012 Author Posted June 18, 2012 As a signatory of the WTO, aren't IPR laws that are applicable to other signatories with regards to the pharma centre also applicable to us? Or is the entire pharmaceutical category under some 'special/protected' GoI list? Haven't read the entire article in detail yet. Maybe once I do that I'll have a clearer picture. IPR and copyright laws in India are quite messed up. That is the reason most pharma companies refuse to launch their new medicines in India. The international community has been pressurizing India to revise such laws and India has been responding, but slow. It was a major issue in around 2003/4.
Prakat Posted June 18, 2012 Posted June 18, 2012 About time. No one should die because they couldn't afford the medication. They should be available as essential services. The imperative for profit that the company has should never be placed higher than the value of a human life.
Crookbond Posted June 18, 2012 Posted June 18, 2012 The only concern is - How will these companies have the money for research and innovation?
Crookbond Posted June 18, 2012 Posted June 18, 2012 No Please! The first article was on 31st March. SMJ didn't even air it's first episode by then. :beee:
Prakat Posted June 18, 2012 Posted June 18, 2012 The only concern is - How will these companies have the money for research and innovation? Even with massive price cuts they will make enough profits to run the company and share the remaining with stakeholders. It will just take longer. And why shouldn't they wait to recover their costs like every other industry. A great wine no matter how good is never priced out of range. 3M runs a busy R&D facility but they made scotch tape available at market friendly rates and have made their money back well more than ten times over by now. The premium that the pharma industry places on its products is based not on the perceived quality or the costs of manufacturing but on the stakes, it's cost is based on the value the buyers place on it, like a buyer would for a work of art or an antique. Except here the motivation is not luxury or to invest but a matter of life and death.
Crookbond Posted June 18, 2012 Posted June 18, 2012 Even with massive price cuts they will make enough profits to run the company and share the remaining with stakeholders. It will just take longer. And why shouldn't they wait to recover their costs like every other industry. A great wine no matter how good is never priced out of range. 3M runs a busy R&D facility but they made scotch tape available at market friendly rates and have made their money back well more than ten times over by now. The premium that the pharma industry places on its products is based not on the perceived quality or the costs of manufacturing but on the stakes, it's cost is based on the value the buyers place on it, like a buyer would for a work of art or an antique. Except here the motivation is not luxury or to invest but a matter of life and death. You still didn't answer the original question. It wasn't about "running" the company but innovate. None of the current Indian Pharmaceuticals are world leaders in inventing new drugs. So currently there's NIL cost of investment and only cost of engineering which makes it possible to lower costs. Once you spend some cash it becomes difficult to lower to ridiculous price levels.
Prakat Posted June 18, 2012 Posted June 18, 2012 You still didn't answer the original question. It wasn't about "running" the company but innovate. None of the current Indian Pharmaceuticals are world leaders in inventing new drugs. So currently there's NIL cost of investment and only cost of engineering which makes it possible to lower costs. Once you spend some cash it becomes difficult to lower to ridiculous price levels. What are you reading? I have answered your question in full. Read my post again and this time remember that I am speaking of the pharma companies which invest in R&D to develop new drugs.
Crookbond Posted June 18, 2012 Posted June 18, 2012 What are you reading? I have answered your question in full. Read my post again and this time remember that I am speaking of the pharma companies which invest in R&D to develop new drugs. You're making a big assumption. The premium that the pharma industry places on its products is based not on the perceived quality or the costs of manufacturing but on the stakes, it's cost is based on the value the buyers place on it, like a buyer would for a work of art or an antique. NO. Yes, there is some premium but major costs are towards recovering their investments. It's not half the price, sorry.
Prakat Posted June 18, 2012 Posted June 18, 2012 You're making a big assumption. NO. Yes, there is some premium but major costs are towards recovering their investments. It's not half the price, sorry. All things being equal your guess is as good as mine so how does yours refute mine? I made a comparison with 3M who have some of the most extensive research facilities of any major corporation. They too have to recover sunk costs in developing new patent-worthy products. But they do so by spreading out the costs over a period of say ten years by making their products available to a wide market. R&D costs are exactly the same - it's all about x manhours of y number of research scientists and the overhead costs of keeping a facility running.
DomainK Posted June 18, 2012 Author Posted June 18, 2012 Manufacturing cost for most drugs are very low, mostly less than a rupee per unit. But the selling cost covers not only the manufacturing cost, but also the money spent in R & D that led the development of the drug as well as to facilitate research for other drugs. Most governments around the world have patent laws that allow 20 years (including India) time for pharmaceutical companies to sell and make money. Pharma companies are free to set the price of the drugs in the mean time. Now, it's easy to say that if we dont allow the pharma companies to reap the profit, future research could be compromised. But there are other factors we should consider: 1. Most of the research done that leads to a particular drug was not done for that drug in particular. Such research is going to assist the pharma companies in developing more drugs in future. 2. There is never any third party authentication of money spent in such research. 3. Pharma companies regularly receive donations for the research work they do. It's all tax free in every country. 4. Pharma companies regularly heavily borrow from research work done by government non-profit organizations who make the research public at no cost for the sake of healthcare. However, such non-profit organizations never extend the research into development. For example, if a student-doctor writes a paper showing that a certain composition of chemicals can kill a certain family of viruses and publishes the paper, the pharma companies would pick up the formula, find out the drawbacks, seal the loopholes, find the cheapest manufacturing possibilities and produce the drug. When they get the patent however, they charge exorbitant amounts on the name of research. 5. Rest of the world: Most pharma companies do not supply medicines to the third world countries simply because of lack of infrastructure and smaller size of a market. They also take a very long time to partner with other companies to supply such drugs to such needy countries and since they have a patent, they demand obscene amounts of money for partnering making the costs way too high for the common citizens of such countries. 6. High cost vs mass selling: So if a cancer drug costs 30,000 INR, we know that less than 1% Indians will be able to afford it. So the drug manufacturer loses interest in the Indian market. Mostly the manufacturing cost of such a drug would be around Rs.1. If the price for the drug in the Indian market is dropped to 5000, the drug companies would find that the sheer number will give them a bigger net profit in the Indian market than selling it at 30,000. So in most cases the high costs dont make much sense.
punjabi_khota Posted June 18, 2012 Posted June 18, 2012 The only concern is - How will these companies have the money for research and innovation? Priced at say 3 lakhs a month (original price), they are not gonna sell many in India anyways.
Crookbond Posted July 5, 2012 Posted July 5, 2012 Govt to give free medicine to hundreds of millions http://business-standard.com/india/news/govt-to-give-free-medicine-to-hundredsmillions/177477/on From city hospitals to tiny rural clinics, India's public doctors will soon be able to prescribe free generic drugs to all comers, vastly expanding access to medicine in a country where public spending on health was just $4.50 per person last year. The plan was quietly adopted last year but not publicised. Initial funding has been allocated in recent weeks, officials said. Under the plan, doctors will be limited to a generics-only drug list and face punishment for prescribing branded medicines, a major disadvantage for pharmaceutical giants in one of the world's fastest-growing drug markets.
Prakat Posted July 5, 2012 Posted July 5, 2012 The amazingness of this development cannot be overstated. Big pharma loses in the potentially biggest market in the world.
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