The US Should Follow India and Have a Process for Opening Key Medical Patents

Big Pharma is trying to justify charging multiple millions for each patient cured of certain diseases. This is not about having the money to pay for more medical research so that more cures can be created. The companies want to increase their stock prices and spending more on executive salaries. The R&D budgets tend to be less than their drug marketing and advertising budgets.

In 2013, the Indian Supreme Court denied a patent application for Gleevec, an important treatment for leukemia made by Novartis. This started years of legal and policy battles between global pharma companies and India.

India has granted compulsory licenses to other cancer drugs, including Bayer’s Nexavar, Roche’s Tarceva, and Pfizer’s Sutent. These licenses allow India generic drug manufacturers to make these drugs with impunity. The secretary of India’s Pharmaceuticals department indicated that the policy was needed to ensure that expensive drugs are available at affordable rates to the poor. India expanded the program beyond cancer drugs. Now if Big Pharma is planning to charge $2+ million for certain disease cures then even developed countries like the USA should follow India’s example to force open gene therapies and patents out of patent to get reasonable and safe competitive sourcing.

There will come a time if the Pharma and Medical Industry cannot find a way to charge reasonable prices and enable reasonable access for life-saving new cures then there will need to be limits on key medical patents in the public interest. There would also need to be a process for conversion of medical patents in the public interest into open source. The companies could get to declare some large tax loss from the forced forfeiture. This would enable them to get tax free profit from other less critical treatments.

SOURCES- Seeking Alpha (Derek Lowe), Bloomberg
Written by Brian Wang,

38 thoughts on “The US Should Follow India and Have a Process for Opening Key Medical Patents”

  1. Something is invented. It can’t be used because it’s too expensive. Therefore nobody is making a profit on it. You can’t profit selling something that nobody can buy.

    So if we change who owns it, a government can… not be able to supply it because it is too expensive.

    This is an improvement?

  2. You’re allowed to exaggerate, but it doesn’t make your exaggeration truer. At this point, there are a lot of groundbreaking innovations in medicines which we cannot make use of because they are too goddamn expensive. That being the case, what is the difference between there being a medicine which one cannot afford and there being no medicine?

    I know, I know, hurrah free market, companies should be allowed to have more money than small countries, monopolies aren’t only not shameful, they are in fact desirable.

  3. Well then, push for government takeover and nationalisation of drug development.
    If there is reason to think that this time it will be cheaper to get the government to do it. IF.
    But at least that’s an honest call.

    What I object to is this call for changes to IP law, and it isn’t until you dig in to what the results would be, and the reaction to those results, and the government reaction to that, and how you’d solve that problem, you finally end up at “nationalise the drug industry”.

    If that’s a defensible position then why isn’t that being said upfront instead of hidden behind a chain of events that most reporting on the idea never goes into.

    When someone is doing something deceptive like that, I don’t have any trust in their motives or ability.

  4. Executive pay is a microscopic part of the cost. Profits are around 15 %, so taking all the profit out would reduce prices by only 15 %, it would also dry up funds for further development and investment (because that comes from profits)

  5. If everyone did like India, the pharmaceutical industry would cease to exist, because it would have no revenues, would it. Executive pay is a microscopic part of the cost. Marketing is actually necessary to sell the medicines worldwide. Believe me, pharmaceutical companies would happily cut the marketing cost, it’s not something they desire

  6. Profits are only around 15% of drug prices, and much of them are spent on developing new drugs. Marketing spreads the medicines around the world, dividing the cost of development on a lot of countries and patients. Government isn’t a particularly effective marketer, nor product developer. But of course, it could just instruct people all over the world to use US gvmnt developed drugs 😀 I am sure nobody would complain about American imperialism 😛

  7. Is that a bad thing?
    The govt having to spend ~70 billion a year in R&D is a bargain if it means the people can stop paying retail prices of $550+ billion a year to pharma.

  8. but because they spend too much on advertising.

    And CEO pay.

    Neither issue is anyone’s business except for shareholders.

  9. It’s a bit disturbing how many people want to do radical, destructive things and their justification is not the direct action itself, or it’s effect, but some 2nd or 3rd order effect down the chain of theoretical results.

    We will confiscate the basis of the one of the most important industries in the world…

    • not because we like nationalizing industry (oh no!)
    • not because we want the industry to shut down (direct effect)
    • not because we want investment in new drugs to be crushed (obvious first order secondary effect)
    • but because they spend too much on advertising.

    If you are really upset by the remote side effect, tackle that directly, instead of hoping to target it as a indirect side effect of what you are actually proposing.

  10. Justifying stealing as a ‘moral issue’ is immoral in and of itself.

    Oh, and I am still waiting for you to prove insulin is still patented.

    will pay anything so you and your Board of Directors can have $30 million salaries and other perks,

    So what? None of your business. Pure and simple.

  11. Who’s doing the stealing? Insulin has been in production for 40 years. In the last dozen years, the price has tripled.

    So? Nobody has a patent on insulin. So you are just full of it.

    Executive salaries and advertising budgets at big Pharma have greatly exceeded the money spent on research.

    So? It’s their IP (Property). Just because it is medicine doesn’t change any of that.

    Yeah, stealing by the rich from vulnerable patients is now a virtue.

    How are they ‘stealing’? They are not taking anything from the poor at all. Denying doing business with someone is not ‘stealing’. Just because it is medicine doesn’t change any of that.

    Thank God the Indians have the guts to put a stop to it.

    You know what? I need a house to live in. I think I will use the government to take yours so I can have it instead. What? You have a problem with that? Look up ‘double edged sword’.

  12. The USA probably has constitutional difficulties implementing such a law.

    Some states have restrictions, mostly in the form of lawsuit settlements that the companies ‘technically agree’ to limit advertising for the drugs involved.

  13. So?

    Automobile companies invest more in advertising than on producing cars as well, I believe.

    The drugs’ IP are THEIR property, remember?

  14. These arguments are what industry uses to control the conversation and take advantage of the populace.

    No, those arguments are backed by empirical evidence of what happens when property rights are interfered with for ‘the public good’.

    They will still invest because the opportunities will still be there.

    No, not really. Look up what ‘marginal decision making’ means.

    Last, if a nation doesn’t like private development of drugs and what that private sector charges, then do the HONEST thing and simply pony up the $$$ to have those companies nationalized while refusing to buy drugs from still-private (overseas) ones. Oh, and good luck with the results from that.

  15. Yup. Prizes are a great way to spur innovation, efficiencies and advances like this. This is because the government is paying only for OUTPUTS (results) and not inputs that produce crappy to even non-existent ‘results’ (most of NASA based upon what people were sold on what it was supposed to deliver by now).

    This was how the Transatlantic Railroad was constructed, pretty much. The railroad companies were paid by mile of track ACTUALLY constructed and only after it was constructed, not before. It was a set amount for mile AND land adjoining the tracks (every other square mile per side of the track). That was how many a railroad town was built as a result, too. And the railroads had to pony up the money and pay upfront the costs on their own before seeing a dime/square mile of land.

    The NASA equiv would be to offer Prizes and set contracts for services by SpaceX, etc. ‘set contracts’ in that they set the terms but don’t constantly change them like they do with Cost Plus contracts.

  16. What a Libtarded propaganda rag.

    The reason why US drugs are so expensive in America is because of other nations pulling this crap…especially Canada.

    The US should just outright ban pharma from conducting ANY business with nations that force IP takings like this. It should also unilaterally levy huge trade penalties for the nations doing it.

  17. The US Congress and Senate are in the pocket of Big Pharma, so until that changes, the rort will continue. New Zealand has a government owned buying agency sourcing all our drugs – it’s supposed to be free of political influence. Generally it does a good job, though sometimes the drug companies will encourage patients to pressure their members of Parliament to fund expensive drugs.

  18. I like the way you’re going with this.

    In practice you’d need a LOT of work on what “cure” means in those rewards.

    What if it reduced mortality by 5%? 10%? 25% but only the women?
    What if you need treatment for the rest of your life, but that gives you a near normal lifespan (see AIDS)?
    See what I mean.

  19. I think the problem there is a combination of

    • Straight out price fixing in the market. Which would be prosecuted as such if the government was interested.
    • Mergers and acquisitions in a market with limited competition. Now THAT is an area where I think rules need to restrict the “free market”. Once you’ve got to the point where there is only a couple of suppliers for a good or service, then mergers and acquisitions of the remaining suppliers is a direct threat to a properly functioning system. Of course we already HAVE such laws. On the books. If they were enforced.
    • Above and beyond the patent system, there is also a medical production control system where you need government permission to make and sell a drug even if it is off-patent.

    Damn it! Everything boils down to “we have the required laws, but the government is messing it up. We need it to be fixed by someone. Such as the government. Oh wait…”

  20. That doesn’t negate my point does it?

    But I agree that Australia’s approach of not allowing advertising of prescription medicines to the general public has a lot going for it.

    The USA probably has constitutional difficulties implementing such a law. But on the other hand they can’t arrest anyone for reblogging an internet video.

  21. It takes billions to develop a new drug. It either comes from sales or from somewhere else. We need a lot of new drugs. We also need old drugs repurposed for other conditions. That also costs a fortune, but since the old drugs (and natural substances) are off-patent, there is no way to pay for the required testing (many, many zeros).
    The prize idea (explained by BlueMan below) is a good one. It will encourage lots of research. The numbers probably don’t have to be that high, though. You probably could get a steady flow of innovation for $5-10B/condition, putting the patents in the public domain after the treatment was validated. You could also switch the emphasis from managing chronic disease (insulin for diabetes) to curing them (CAR-T for leukemia). You might have a smaller prize for a substantial improvement in managing a disease (a better insulin) or for a second cure (e.g., with fewer side effects, lower costs or broader applicability).
    The prize could/should be funded by pooling money from lots of governments, all of whom presumably want such research.
    One thing to do before upending everything is to ban the practice of allowing one company to pay another to stay out of a market. That is pure restraint of trade and should set the feds salivating over the headlines they could generate by going after big pharma.

  22. You catch and convict a criminal. Great. Now you need to decide what the punishment is. You can give him a stern talking to, or you can make him die in agony along with his entire family and maybe even his entire village. Those are called extremes. Yet another example of why extremes are a bad thing when people go all the way in either direction.

    For years I needed a prescription that cost me $400 a month (insurance only paid half of that). When it finally went generic it should have been about thirty cents a day. Instead, the manufacturer (who didn’t develop the drug in the first place but bought the patent when they saw an opportunity to exploit the people who needed it) changed the size of the grains (no change to the composition) and patented it as a new drug, same price. Then priced the older drug up out of existence and paid three of the four companies that were about to make the generic version NOT to make it. Then bought the company that was still going to make the generic and let it do so, but that generic sold at the same price as the patented medication.

    Finally, after twenty years of having to pay the inflated prices, it is about thirty cents a pill. I still feel like someone should have been tarred and feathered, and that doing that would be no where near an extreme, but maybe I’m being too subjective. The only satisfaction I have is that the prime villain and instigator died of natural causes several years back, but there were many ready to take over for him.

  23. I wish your point was true. But, Big Pharma spent much more on ADVERTISING last year than on DRUG DEVELOPMENT.

  24. Sounds like we need more public research into cures or treatments for medical issues that cost the government a lot of money to cover through Medicare etc. That way there are no patent issues and people can have access to decent drugs without breaking our budget. Of course, good luck getting that passed in our billionaire funded political system.

  25. The medical establishment has been paid for treating my type 2 diabetes for 14 years now. There has been absolutely no improvement in therapy in that time, but costs have risen dramatically. I’d say they’ve profit enough from my disability. Oh, in the meantime they poisoned me with LIpitor. That was profit for harming me.

  26. It is a completely different issue, but it’s still a real issue. It’s the intersection of patents and tort law, where if you patent a new, and nominally better version of something medical, it can become legally perilous to market the older version.

  27. Instead of nationalizing patents deemed to be in the public interest, which stockholders would consider theft, decide what diseases this would be worthwhile for before the patent is filed and announce it publicly – with a payment scheme announced at the same time. That way it’s just announcing a call for public contractors to perform health research services, which the market can decide to pursue or not without coercion or uncertain rights.

    Diabetes cure: $700 billion award
    HIV cure: $70 billion award
    Alzheimer’s cure: $400 billion award

    (the numbers above are just from rough google searches, but are meant to be about 2 years of what the USA currently spends on these diseases – different governments should negotiate their own bounties or trade rights with each other)

    I like the idea of payment being conditional on efficacy. $700 billion is a lot to give away based on some clinical trials that might not be accurate. But the bounty can be payed out over 10 years with yearly reviews or something. Maybe make a provision for splitting the bounty if multiple suppliers develop effective approaches.

    It seems like a big enough pot of gold that you should have takers, but if Novartis thinks that the cost to profit ratio is poor, then maybe the fed needs to take a look improving the research/clinical trial cost situation. Cut some red tape, or maybe they should run the clinical trials themselves instead of leaving that cost on the shareholders.

  28. I would claim that we don’t have enough being invested in medical research now.

    What reason do you have to say that investment won’t decrease if the returns are decreased?

  29. This is a simple morality issue. If you grossly overcharge for a cancer drug because people are desperate and will pay anything so you and your Board of Directors can have $30 million salaries and other perks, that’s white collar theft. Pure and simple.

  30. Do you go to work because of the public interest? You do it for profit. If someone attempts to take your labor for less than what you can sell it for, you will employ that labor somewhere else. Smart people are a finite resource. Ask yourself, “is my life better off because of XYZ billionaire and his invention?” Bezos, Gates, Jobs, etc. etc. Your life is better off because people can get rich, not the other way around. They don’t take advantage of you. You freely exchange your money for what they have. Just because it’s medicine, somehow you think it’s different. It’s not.

  31. Substitute any product you like in place of a medicine. It’s theft! People go to work and do things for which they sell their labor. If India decides to steal technology because they want to…who cares…they want it. Somehow people’s health is sacrosanct and everyone in the medical industry owes the rest of us their labor and knowledge for free. What if it’s your line of work for which India chose to nullify the profits? Would it matter then? If India had any real productive patents they wanted to protect and America said, nope, we want it for free. They’d howl at the moon about it.

  32. These arguments are what industry uses to control the conversation and take advantage of the populace.

    They will still invest because the opportunities will still be there.
    They will learn to be more careful and efficient in their approaches and new tools including AI are becoming very effective at guiding them.

    This is the same in any industry. if there are no constraints then waste is simply not needed to be contained. If there are no regulations then the public interest is simply not needed to be considered.

  33. This approach will send a strong message to the big pharmaceutical companies.

    And that message is “Don’t invest in any ground breaking new research, because if you get something really good it will be taken away.”

    A secondary message is “Developing strong controls over politicians and senior government officials is now much more important than actually supplying good medicines.”

  34. You can bring up the morality of the issue, but those who hate “big pharma” will not agree with your framing of the issue and so it really doesn’t help.
    Instead, point to the simple business decisions that such laws result in.

  35. Nobody has a patent on insulin, given that it’s been in use since the 1920s and in synthetic production since the early 1960s (I suspect your reference that said “40 years” is itself a couple of decades old).

    No patent. So why bring up insulin in the discussion unless you are trying to confuse the matter?

    There are patents on various means of production of insulin, but those patents don’t cover the old methods of production. No patents stopping anyone from using the 40 year old method. It’s a completely different issue.

  36. Who’s doing the stealing? Insulin has been in production for 40 years. In the last dozen years, the price has tripled. Executive salaries and advertising budgets at big Pharma have greatly exceeded the money spent on research. Yeah, stealing by the rich from vulnerable patients is now a virtue. Thank God the Indians have the guts to put a stop to it.

  37. Yeah, stealing is now a virtue. As long as you can justify it in your mind, it’s okay. Just do it. I hope companies do everything they can to withhold treatments in India. You aren’t owed something just because you are alive. Legalized theft is a disincentive for others to produce what they know will be taken from them.

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