
Why Chemotherapy That Costs $70,000 in the U.S. Costs $2,500 in India - zoowar
http://www.theatlantic.com/health/archive/2013/04/why-chemotherapy-that-costs-70000-in-the-us-costs-2500-in-india/274847/
======
nhashem
This is basically the paradox of US healthcare innovation. Canada can tell its
pharmaceutical companies, "yeah, that cool drug you just invented, we're not
gonna pay you what you want for that." And what option does the pharmaceutical
company have? Convince healthcare providers to charge retail prices to their
patients as an out-of-pocket expense, or... reduce prices accordingly.

Because healthcare payments are not functionally a government-controlled
monopoly (ie. socialized healthcare) in the US, this doesn't happen. So
Novartis can sell Gleevec for $75,000 in the US, because a healthcare provider
will agree to pay and just bill it to private insurance companies, and those
private insurance company will agree to pay and just increase their premiums
on the customers, who probably won't notice because, assuming they have
employer-provided health insurance, their employer won't take anything more
out of their paycheck, but then say increased operational costs means nobody
can get a raise.

So US healthcare leads the way in innovation because device and pharmaceutical
manufacturers can make a lot more money than in countries with socialized
healthcare. So these companies make most of their profits in the US, and then
they'll grumble and accept lower prices in every other country, because at
that point it's just icing to them. After the profits made in the US, getting
$2,500 from Indians for Gleevac is better than getting $0.

The US is effectively subsidizing advanced healthcare for every other country
in the world. This is pretty crappy, obviously, but this is a complex problem
to solve. Because if you move to a cost-controlling system, then you will
stifle legitimate innovation. Why jump through all our FDA clinical trial
hurdles if there's no promise of a big payout at the end? Why invest in R&D
without the protections of patent law to prevent your drugs from being
trivially replicated?

I'm not trying to say, "oh, those poor profits of the drug companies." I
recognize this may not be a sympathetic argument. But it's likely to be tough
to control costs and yet maintain R&D and innovation. Right now, every other
country essentially gets the US to pay the bill for the innovation and they
reap the benefits at a lower cost, but with US healthcare already consuming
1/6 of our economy, this isn't sustainable.

~~~
snippyhollow
US firms are investing less in R&D relatively to their rank
[http://en.wikipedia.org/wiki/Pharmaceutical_industry#Market_...](http://en.wikipedia.org/wiki/Pharmaceutical_industry#Market_leaders_in_terms_of_healthcare_revenue)
than their French/UK (publicly-funded healthcare) counterparts. The US are not
"subsidizing it for poor countries" more than other rich countries.

The truth in the case you're making is not specific to healthcare and is that
"research (private and public) of rich countries that can afford it" benefits
poorer countries. So what, let's stop advancing science? We're all better off
this way!

~~~
forrestthewoods
From that list 48.17% of all health care R&D spend is by US based companies.
Sounds like the US is subsidizing the world to me.

~~~
belorn
It should also be mentioned (since we are talking about statistics here), that
1/3 of the total US medical research spending is from taxes (congress) and has
been consistently been so for 20-30 years. That money has no connections with
the current health care system, or insurance companies and is just pure tax
money sent into research.

From those 1/3, about 95% of all core research is supported, and around 80% of
all research into medical conditions that are life threatening.

Health care system, insurance companies and patents are for everything else...

*The 95% and 80% is number from a talk, and for the moment I can't find references. What I could find is statements about majority funding is used on basic research (<http://jama.jamanetwork.com/article.aspx?articleid=205216> and <http://www.nsf.gov/statistics/seind12/c5/c5s1.htm>). In the future I will hold off on those number in comments until I got direct sources to use with them.

~~~
kingkawn
If true these stat provide a compelling point of argument for expanded
government research funding and less protection for the private insurance
system. Do you have a source for it?

~~~
criley
I'd be interested as well, because if he's trying to label all NIH-bound funds
as imperative to this process, I think he's overstating his case.

Yes, academic institutions do a lot of low level work that pharma companies
build on top of, but you'd be surprised how often potential new molecular
entities (truly new drugs) do not originate from government sponsored academic
sources.

(However, the tools, understanding and/or methodologies that made that new NME
possible did likely come from those labs!)

~~~
belorn
One can read the data in different ways, and I don't think anyone doubt that
pharma companies do contribute to the investments into new medical
innovations. One interpretation that I listen/read about is that NiH and
pharma operate on different levels, and thus sadly, NiH's contribution tend to
be forgotten because they aren't the people with that pop out the pills bought
in the store, even if the pills would not have existed if it hadn't been for
the NiH funded research that made the new innovation possible.

Then we add patents and insurance companies into the mix, and some people want
to paint a picture how innovation gets created. My comment was thus mostly to
inform that the largest single funder to medical research is not some for-
profit company like Pfizer, but rather tax supported NiH.

~~~
kingkawn
"I don't think anyone doubt that pharma companies do contribute to the
investments into new medical innovations."

Every aspect of this system has to be questioned relentlessly, because each of
them requires huge investments of social and financial capital. I am happy to
doubt the value of the private drug companies' contributions. Many of their
discoveries are reformulations of older drugs meant to allow a repatenting and
re-marketing of old ideas. Many of the new supposedly breakthrough drugs do
not provide significant improvements in mortality, but do cost huge amounts of
money so that they can recoup their investment.

There are of course important developments that come from everywhere, but the
question is about signal to noise. If, as these statistics imply, you can show
that the drugs and other changes in medical care that provide positive changes
to quality of life and mortality are coming from government research
significantly more so than other sources then why subsidize private research,
why protect the private drug development system that results in outrageously
priced drugs, why waste 2/3rds of research money to produce such a
disproportionately small portion of the advancements in medical knowledge?

Again, I would like to see sources for the numbers, but regardless, there
should be no assumptions made about the value of private or public investment
because that's the way it has been.

~~~
criley
_> Many of their discoveries are reformulations of older drugs meant to allow
a repatenting and re-marketing of old ideas._

I think you're confusing evergreening, which is a real problem, with the
number of NME's that are being generated. NME's are "new molecular entities",
or totally new formulations.

> _Many of the new supposedly breakthrough drugs do not provide significant
> improvements in mortality, but do cost huge amounts of money so that they
> can recoup their investment._

Low hanging fruit has been taken and newer methods of discovering safe and
effective drugs are needed.

You might find this shocking, but pharma is a dying business. Companies are
divorcing their drug development departments into separate businesses so they
can fail gracefully. The blockbuster drugs that can recoup the investment of
looking for a needle in a haystack aren't coming any more.

 _> If, as these statistics imply, you can show that the drugs and other
changes in medical care that provide positive changes to quality of life and
mortality are coming from government research significantly more so than other
sources then why subsidize private research, why protect the private drug
development system that results in outrageously priced drugs, why waste 2/3rds
of research money to produce such a disproportionately small portion of the
advancements in medical knowledge?_

This is absolutely, 100% totally and COMPLETELY false.

The government IS NOT INVOLVED IN DRUG RESEARCH. Honestly, period. They can't
afford it! It costs a billion dollars to whittle 10,000 drug candidates into 1
FDA approved drugs. NIH grants aren't even 1% of that cost.

The government is not responsible for very much actual drug development at
all. They don't own or fund the labs. They fund the schools that do the work
on the lower level theory, on the tools and concepts that will one day be
commercially viable.

Private labs handle the vast majority of all new molecular entity discovery,
pre-trial, trial, etc. They have the money, labs and teams capable of handling
it -- NIH funded labs often don't!

Here's a list of NME's for 2013 so far:
[http://www.fda.gov/drugs/developmentapprovalprocess/druginno...](http://www.fda.gov/drugs/developmentapprovalprocess/druginnovation/default.htm)

Remember, the FDA is the gatekeeper and these companies research thousands and
thousands of candidates looking for something that they can statistically
prove safety and efficacy of to the FDA, and the FDA gets to decide.

As you can see from that list, the FDA doesn't allow new molecules out very
often.

~~~
belorn
1/3 is the number, and while they do spend some on clinical trials, the vast
majority goes to applied and basic research (their wording). That means 2/3 of
the total R&D of medical innovation (US) need to go somewhere which is the
drug development you are talking about.

Some people have argued that maybe those 2/3 should be tax money too. Its a
bit weird situation where the state already pays for 1/3 of the R&D, and then
on top of that give state enforced monopoly in 20 years periods for those who
invest in the other 2/3 (additional monopoly period is also granted by the FDA
after an successful drug trial). State enforced monopoly is often describe as
tax raised outside congress control, and has its history and name (letters
patent = royal decree) from that purpose.

One question we should ask is what the industry brings to the table if we took
away all state funded involvement. Is it more efficient to bring competition
through patent grants rather than direct research and development grants? Do
we get larger and more spread out pool of investment that could not happen
without a few blockbuster drugs to get gambling money? We should ask for data
which prove that the current method (1/3 of the funding and granted state
monopolies) is the best use of tax money. Maybe at least demand some kind of
high standard when a company take research supported by the 1/3, and claim a
new invention based on already known and disclosed techniques. The India model
is to demand an increased efficiency, beyond showing that the modification of
the old drug is novel.

------
belorn
> the patentability of modifications to existing drugs under Indian law

A key point here is that the original drug itself was patented, and has
expired. The issue that the Indian court had with Gleevec patent application
is that it only rearranged the molecule in a new crystal pattern, ie
Polymorphism. The Indian court consider polymorphism to be a well known
technique when working with drugs, and just applying polymorphism to a old
drug and record what it did do not fulfill the requirement for patentable.

~~~
rohamg
This. The US patent system rewards the same kind of "innovation" as the
financial sector did pre-subprime. Look at the introduction rate of new drugs
vs derivatives of old (and about to expire) drugs over the past decades to see
what I mean. The argument that "if drugs were cheaper (=they saved more lives)
pharma r&d would crumble" is facetious and speaks volumes about the priorities
of the individual making the argument.

------
gambiting
My father has been on Glivec for the last 7 years, and this is the only reason
he is still alive - when he was diagnosed with GIST doctors told him he would
have 2 years left at best, but decided to add him to clinical trials of Glivec
for GIST patients. The whole treatment is paid for by our national health
care, I believe it costs....$3000 per month, that's how much a single box of
Glivec costs here and my dad has to take a pill every day so he gets a new box
every month.

Not really related, but I wanted to mention this, since some people really
want to show Novartis as evil, and while they probably charge too much for
their drugs in the US, their medicine actually saves lives, my dad being the
best example of that.

~~~
brazzy
How exactly is extracting the maximum possible revenue from people for giving
them something that saves their lives NOT evil?

~~~
gambiting
As far as I know, companies are supposed to make profit,they are not
charities. Especially if you are so large that you sell shares in company,
then you have a LEGAL obligation to the shareholders to always take decisions
that maximise profit over everything else(unless you can show that selling
your product cheaper is going to bring more money to the company in the long
run). This is not "evil" - this is just how these companies work. It's like
what Steve Jobs said,when he was asked by Obama what would it take to bring
his business back to US, out of China. And Steve said very correctly, that
there is nothing he can do - if the production is cheaper in China, they have
to go that route,since they have legal obligations to work in the best
interest of their shareholders. (and I am not saying this is a good thing.
This is just how this entire system works, and if you opened your own company,
you would have to play by the same rules,no matter how noble you were. If you
want this situation to change, change the system)

The only way to combat this is to have a national health care system,that sets
their own prices for drugs it buys from companies. If my country says that the
maximum it can pay per box of Glivec is $3000, then Novartis can't do anything
about it. Well, they could decide to not sell the drug at all, but they would
rather have some money than none.

~~~
brazzy
> a LEGAL obligation to the shareholders to always take decisions that
> maximise profit over everything else [..] This is not "evil" - this is just
> how these companies work.

Yes, it is very much evil.

> The only way to combat this is to have a national health care system,that
> sets their own prices for drugs it buys from companies.

No. All it takes is a different patent system that reduces the ( _artificial,
granted by society_ ) monopoly awarded to patent holders. Or, as a more
radical change, eliminate monopolies for drugs entirely and fund research
publically.

~~~
gambiting
If you opened your own company you would have to play by the same rules. Even
if you wanted to sell your product cheaper, you would not be able to due to
obligations to your shareholders,which have a legal binding. Is the system
evil? Yes. Are you evil for following the rules? No.

And as for the patents - how would you deal with a problem that after spending
millions on research somebody could copy you and sell the same product for the
1/100 of the price? I know that the US patent system is broken, but this
problem is very real.

As for the publicly funded research - this is the best option, but some
countries like US oppose this so strongly that I don't think it would work.

~~~
Retric
There is no legal requirement to maximize profits, just avoid doing anything
stupid. Aka they can donate 5% of total annual profits to charity but not 50%.
Drug companies often donate large quantities of medicine to 3rd world
countries because it's vary cheap for them to do so and the management team is
not evil.

~~~
gambiting
There is a legal requirement that you can never take a decision that's bad for
the company. If there is an official analysis made that shows that you could
make more money by selling your product at 3x the price and people would still
buy it, and you ignore such a report, then it's a very good reason to get you
kicked out of the management board.

And yes, companies donate money/products to charity, but only when they have
"spare" money, so money they have no current use for, no ongoing investment
plans and so on. And most of the time, giving money to charity is written off
as a PR expense, improving the company image by donating to the poor. So yes,
there are ways to spend money for noble causes if you want to, but you can't
knowingly make a decision that would make the company make less money.

------
snarfy
Please tell me how charging $50,000/yr for 30 year old dimethyl fumarate
(BG-12/tecfidera) for the treatment of multiple sclerosis is due to
innovation. It shouldn't cost more than aspirin. The _only_ reason they are
charging that much is because that's how much all other MS medications cost.

Oligopoly, it's like a monopoly, only legal.

~~~
refurb
Because someone has to pay for the phase 3 clinical trials to actually prove
that it's safe and that it works? That doesn't come cheap.

If Biogen charged only the price of aspirin, they would never recoup their R&D
costs, let alone make a profit.

~~~
visarga
Then maybe we should find a way to make trials cheaper. Why does it cost one
billion dollars to bring a new drug to market? That could drastically limit
the innovation.

~~~
refurb
You need to work with the FDA on that one, they are the ones that set the
trial requirements.

It all comes down to risk-reward. Even though the FDA has very rigorous
efficacy and safety standards, drugs still get through that kill people.

If you want to make drug approvals cheaper, then you have to be willing to put
up with a higher risk of drugs getting through that shouldn't have.

------
scotty79
> Rejecting the Gleevec patent application is not the only step that the
> Indian government has taken to circumvent patents on cancer drugs.

It's not circumventing the patent. It's not granting the patent. People think
that patent is some kind of innate natural right and if you manage to trick
one country into giving you monopoly you are somehow in the right now and
other countries that don't see the point of giving you similar monopoly are
circumventing your sense of entitlement.

~~~
nodeless
Very very well said.

------
areddy
'Gleevec is under patent in the U.S., but not in India' This is a biased
article, Novartis tried to gain one more patent for existing drug with slight
modification.

see 'Calling big pharma's bluff'
[http://www.thehindu.com/opinion/lead/calling-big-pharmas-
blu...](http://www.thehindu.com/opinion/lead/calling-big-pharmas-
bluff/article4573890.ece)

------
3am
The first comment after the article ends the discussion:

"This article is misleading from the beginning. India did not refuse to issue
a patent for Gleevec, it refused to extend the patent Gleevec already had,
based on merely superficial changes to the formula, a practice known as
"evergreening", which pharmaceutical companies use to extend the monopoly on
their medications as long as possible."

That is completely accurate, and more informative that the article in fewer
words.

------
replicatorblog
One point I haven't seen explained is why the Indian companies don't
manufacture the drug based on the molecule described in the expired patent.

If what the courts are saying is true and the new patent covering
crystallization is trivial, the expired patent should be just as effective and
free to use? If it's not as effective, that seems to make the case for the new
Novartis patent.

~~~
anuraj
Many Indian companies including Cipla,Natco and Sun Pharma has been
manufacturing generic versions for the last 10 years or so and are selling at
a fraction of the price. For your information, India is the largest generic
drug producer globally. [http://www.indiamart.com/moderntimes/imatinib-
mesylate-capsu...](http://www.indiamart.com/moderntimes/imatinib-mesylate-
capsules.html)

------
product50
Looks to be a sponsored article from Novartis and the likes.

------
Nano2rad
This article does not say why the Gleevec patent was rejected, maybe it was
not the purpose of the article. Indian companies did not invest in clinical
trials, even in the discovery of the molecule. They are just using the
disclosures. Even if there is compulsory licencing there should be a cost,
about 20 million dollars would be okay based on the average research cost and
population of India. I dont believe in compulsory licencing but believe in
price control. Let those patent holder companies have exclusive rights but
govt should have the right to determine the price based on the purchasing
power of the people. The better option of course is govt or the insurance
companies negotiate with patent holder. But in India there is no health
insurance run by govt that addresses the real price of drugs. Most of the
insurance for poor is like a fixed amount like Rs. 30 thousand which does not
even cover 10 days in hospital. The price control is supposed to make the cost
of healthcare down, but there is no control of the cost of surgical
procedures.

------
p6v53as
In other words americans partly pay for indians for drugs by having these
patent laws.

~~~
userulluipeste
<https://news.ycombinator.com/item?id=5530662>

"The issue the Indian court had with Gleevec patent application is that it
only rearranged the molecule in a new crystal pattern"

...in other words the American patenting system is more corrupted than
India's. Reading again my last written sentence I can not but awe - I never
thought I might ever compare America with India and find something less
corrupt in the last one!

------
smoyer
It's not nearly the difference that it would appear ... Think about the per
capita incomes of both countries and you'll find the drug is prohibitively
expensive in both countries. If you look at it from the drug companies
perspective; it's a case of maximizing their profits in both markets and
competition is just one factor in doing so.

------
snambi
Nice post. In USA employers pay the medical bills through insurance companies.
In india either government pays the bill or the patient. So, they cannot
afford $70,000 bill. So the government takes the decision that is beneficial
to itself and patients. In US the pharma companies and insurance companies
decide what is the price.

------
sageikosa
Because prices are determined by what the market will bear? I thought that was
the stock answer for any pricing question.

------
pc86
All things being equal, stuff is _always_ going to be more expensive in the US
than in India. If you're complaining about $70,000 here v. $2,500 there, I'm
going to assume you're charging the same for your services here as someone is
in India, right? _Right?_

------
baldfat
So explain to my dying son why his cancer Osteosarcoma has a flat line of 15%
survival rate for the past 30 years?

WHY IS THERE NOT ONE NEW PEDIATRIC CHEMOTHERAPY IN THE PAST @) YEARS
INTRODUCED IN AMERICA?

~~~
baldfat
20 Years

------
zwieback
Couldn't healthcare tourism to India solve some of this problem? It's already
happening on a smaller scale in Mexico.

------
inDigiNeous
Chemotherapy is a form therapy where the medicine companies heal the the
patient off his money and then kill him.

~~~
mansigandhi
Huh? Do you have an idea of how science and medicine works?

~~~
inDigiNeous
Just wondering what this has to do with Hacker News. But anyway, check out:

[http://www.cancer-research-awareness.com/why-chemotherapy-
ne...](http://www.cancer-research-awareness.com/why-chemotherapy-never-
works.html)

[http://www.smashcancer.com/2010/08/22/cancer-lies-and-the-
me...](http://www.smashcancer.com/2010/08/22/cancer-lies-and-the-medical-
establishment/)

[http://current.com/green/89138817_cancer-is-not-a-disease-
ch...](http://current.com/green/89138817_cancer-is-not-a-disease-chemotherapy-
is-a-hoax.htm)

Just a few writings and articles speaking about the lie that is chemotherapy.

I have an idea how medicine works, let me spell it out here for you:

1\. Poison the foods (GMO, sugars, fats, overprocessed crap that is the idea
of western food)

2\. Sell medicine for people who eat this poisoned food

3\. Profit!

Now, this is _my_ idea. You are allowed to have your own idea about this.

~~~
gambiting
This "lie", as you call chemotherapy, has kept my dad alive for 5 more years
than what the doctors were giving him when he was first diagnosed. Would he
get cancer if he didn't eat sugars,fats and over processed food our western
society eats? Maybe. But you don't know that. Instead, you are trying to
neglect the obvious, which is the fact that chemotherapy is actually saving
lives of people like my dad. I agree that we should improve the way we live
our lives, eat healthier, exercise more etc etc.....but you can't bash
companies making life saving drugs.

~~~
TheAnimus
My father has been in remission now for coming up 6 years, the chemotherapy
worked quite well I think.

He never smoked, didn't really have GMO crops even available to him to eat for
most of his life.

I don't get why people like to have this idea that avoiding cancer is as
simple as shopping at a more expensive supermarket. In a way it's almost a
culture of victim blaming.

------
gosub
Is US healthcare waiting to be disrupted?

------
ktzar
Lawers

------
ofacup
i've worked at novartis. they spend 3 times as much on marketing than
research. that's what's wrong with the whole deal

~~~
nikster
Kind of shocking but that's not even the biggest problem.

The first problem is the money they spend on buying laws, aka bribes, aka
"lobbying" as the USA likes to call it. Corruption in its finest form. That's
why they get perpetual patents;

The second problem - and I kind of assume that that falls under "marketing"
expenses - is that they can basically bribe healthcare providers and doctors
to use their products.

Result: Most expensive health care system in the world, by a large margin.

