
India firm shakes up cancer drug market with price cuts - deadbea7
http://dawn.com/2012/06/17/india-firm-shakes-up-cancer-drug-market-with-price-cuts/
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ashishgandhi
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.

~~~
jellicle
>Do you really think this is smart?

Of course it is. This has easily brought India trillions of dollars worth of
benefits. Is there any benefit to India at all of paying billions of dollars
per year to the United States for.... nothing?

~~~
blackspider
Of course India shouldn't! Why should they? Why would anyone want to pay for
something that cost billions of dollars to be discovered now that it is
discovered. We should all steal! </sarcasm>

~~~
politician
Just like the US violated European patents during our Industrial Revolution,
India, China, and other emerging markets violate our patents and copyrights to
fuel their own economic growth. Really, the best we can hope for is that
they'll start producing their own worthwhile research which we can license in
10-20 years.

~~~
pm90
Ah, I like this comment. Very few people realize that progress in other
countries actually means that the pie just gets bigger, although that's hard
to see in the short run

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cdooh
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
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
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

~~~
jeffool
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.p...](http://www.gsk.com/investors/reps11/GSK-Annual-
Report-2011.pdf) Page 136

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drsim
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.

~~~
ig1
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.

~~~
kkowalczyk
This argument is demonstrably false.

Look at any commodity market, with no barriers to entry, no IP protection,
thin margins, say: making bread. The logic that everybody will stop making
bread because there's more money to be made in making iPads is false.

The general rule is: as long as there is money to be made, people will compete
for this money.

There's a lot of money to be made in drugs and as long as it's true, companies
will compete for this money, even if the margins won't be as great as they are
today.

Look at
[http://en.wikipedia.org/wiki/List_of_pharmaceutical_companie...](http://en.wikipedia.org/wiki/List_of_pharmaceutical_companies):
the top pharma company makes $12bn profit on $62bn of revenue with $7bn spent
on R&D.

The $12bn is a lot of wiggle room and twice the amount they spend on R&D. They
are making profits hand over fist.

The $7bn total spent on R&D also puts your $1bn per drug into question - does
the biggest pharma company can only do 7 new drugs per year (and I'm really
generous in assuming all of that R&D goes into developing new drugs)?

~~~
ams6110
I don't get the comparison to commodity markets or markets for commonplace
things like bread. There aren't any high barriers to entry in bread business,
it doesn't require a lot of specialized skill or R&D, and consequently there
is not a lot of room for profit.

Pharmaceuticals involve high liability, high costs, and highly skilled workers
at least in the R&D area. I'm not sure whether the "net income" (it doesn't
say profit) listed on that wikipedia page is net of R&D and net of taxes.
Actual profit might be much smaller than it appears; if R&D is not included
then the top firm has a profit of 8% and that may not include taxes. If they
are only able to make bread-bakers profits they might as well just make bread
and avoid all the hassle.

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

------
kamaal
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>), 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.

