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.
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.
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)?
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.
Maybe the US is simply a poor market to launch new drugs into, if it costs that much to get it to market. It might be better to launch in other countries, like India, and then work towards a US launch after extensive use data is available.
That is exactly the reason why we shouldn't allow desperate people to be used as canon fodder for research in nations which are better known for corruption and reverse engineering.
Or are you saying that the poor should feel lucky for the opportunity to sign up for experimentation?
I'm not sure if that's what he meant. I think what he meant is that:
use poor people cheaply for testing ==> make drugs faster ==> more poor people saved
I'm really interested in the ethical questions involved in this matter,
I'm sure of what side I am ethically on this, because I simply have to imagine what it would be if _I_ was the poor guinea pig (which could have happened btw, I was really really lucky to born to middle-class parents). But this is on very slippery slope; when you become desperate, it's where you start trying to justify a class of human beings as being `lesser'; and once you do that you've opened Pandora's box (Aryan race etc etc)
The goal should be for all people to have access to health care, and since it's less capital-intensive to launch a drug in India than it is in the US, then maybe that should be the norm. New drugs would be much more accessible with less investment to pay back.
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.
and I am afraid that India has a shady counterfeit drugs industry where they are selling drugs with less than the required amount of the active ingredient which leads to resistance to say aids drugs.
And when the BBC World Service investigated they people who talk to them had to have their identity & voices disguised because they did not want to end up dead
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.
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.
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.
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).
>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.
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".
>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.
A couple of points:
First off, comparing individual companies to individual companies is pointless. I'm saying that the whole shape of the pharmaceutical industry is wrong, and if sweeping changes were made, it should be possible to increase both the number and size of generic manufacturers out there. Right now there are huge barriers to entry imposed by regulations intended to keep R&D profitable, and those barriers continue to act on existing companies with the expiration of each patent.
Secondly, you could quintuple the price of all of Watson's drugs through a tax and the drugs would cost less than Pfizer's.
>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".
I think that statement is impossible to even speculate about. Yeah, we have much more rapid drug development than we used to, but that could just as well be explained by our civilization's overall technological advancement as by our obviously broken and destructive drug patent, approval, and regulatory systems.
"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."
