Bayer CEO: Nexavar cancer drug is for "western patients who can afford it.”

http://keionline.org/node/1910

by tchalla • 13 years ago

108 159 13 years ago

Bayer Chief Executive Officer Marijn Dekkers called the compulsory license “essentially theft.”

He's a bit mixed up. Government enforcement of your temporary monopoly is a privilege. Failing to give you the privilege you think you deserve is not the same thing as stealing from you.

slaxman3• 13 years ago

May be I am over reacting, but I feel that he has no respect for the laws of the country where he wants to do business. I am sure Bayer knew how the patent system in India works before they entered the market.

mbreese7• 13 years ago

Maybe I'm missing some history, but I don't think that Bayer ever wanted to enter that market. He doesn't want to do business in India.

This basically says that if you aren't in the Indian market or aren't offering your product for a price that India agrees with, your IP protection is meaningless.

This starts to get murky from an ethical point of view because we are talking about a cancer medication, and I doubt that software IP would fall under the compulsory licensing. But, cancer drugs are expensive to develop. Bayer should absolutely be afforded some IP protection to recoup the costs of developing the drug. Otherwise, they'll just stop; or more likely, just increase the prices elsewhere around the world.

I'm sure that Bayer isn't as concerned with losing the Indian market for the drug. But rather, they should be more worried about the Indian generic version of the drug hitting the international market.

barking• 13 years ago

You could say the same thing about anything anyone owns. For government read society. Drug companies risk a lot of money in research. The prospect of reward is why they do it Society has determined that it's a good thing (for society) to reward certain types of risk takers. Take that 'privilege' away and society will suffer.

larubbio5• 13 years ago

Although I'm sure there has to be more to this story. If Bayer wasn't going to sell the drug in India (since it wasn't made for Indians) has that 'privilege' been taken from them? They still have monopoly rights elsewhere in the world.

It does make me wonder why, in an attempt to capture more revenue, it isn't being released and priced locally in the Indian market? I'm guessing fears of re-export degrading sales in the western world?

timbre• 13 years ago

Different societies have determined different things. Indian society in particular has determined that reducing this reward to risk-takers in order to widen access to drugs is a worthwhile trade.

throwaway_yy2Di• 13 years ago

Arguably the monopoly is intrinsic: pharma companies have the pre-existing ability to hide the product of their R&D, e.g. by only selling it in closed clinics, or by obfuscating pills with thousands of inert ingredients ("DRM for wetware"). In this view, monopoly rights are granted to extract the social benefit of public disclosure. (And "disclosure" still minimal and ineffective: pharma is massively secretive about their research -- rationally -- which certainly isn't globally optimal).

scotty794• 13 years ago

And the goverment by the virtue of having tanks and jets and soldiers has intrinsic monopoly to decide what are the rules that have to be observed to even be allowed access to the market of given country.

jpttsn5• 13 years ago

I'm personally against IP and I don't think he has a right to the temporary monopoly. If the government shut down all patents, I don't think he'd be right to call it theft.

Still, perhaps he has some sort of point. The way he government selectively disables this provision has a tinge of dishonesty about it. Perhaps it could be argued he has the right to an equal monopoly protection relative to others.

wlievens2• 13 years ago

Just curious: how would an economy work in you hypothetical world where intellectual property does not exist? Honest question.

huhtenberg• 13 years ago

Witty sarcasm much?

Without this "privilege" a company has no incentive to develop anything new, leave alone anything that requires massive R&D investments. What India did is it effectively said that they don't want to participate in the development of new drugs, so their stance on this matter is frankly quite ludicrous.

Try this for a comparison - Germany declares that all software sold in their country should be priced at $1 or less. Would you still be talking about software companies being crybabies for objecting this? Doubt it.

hobs2• 13 years ago

I think something that hasn't been mentioned is how much they spent to develop the drug, and how much they expect to recoup.

If someone has to take a drug for 3 years and pays 195,000 dollars, and there are tens of thousands of patients, they can certainly price it lower than that.

If the price per year is 1950 (3%) and a million people are using the drug, that that 1.95 billion dollars. Per Year.

larubbio5• 13 years ago

I'm sure I'm being very pedantic here, but the "no incentive" argument has always bothered me. Saving a life is an incentive. Satisfying intellectual curiosity is an incentive. So the company does in fact have incentives to develop something new without this "privilege." The may have a strongly decreased financial incentive, but that is very different from no incentive.

yequalsx• 13 years ago

The scientists who develop such drugs generally do not do it to make billions of dollars. Their salaries usually are in the 6 figures and I see no evidence that fewer drugs would be developed if society paid for development through universities and nonprofit research centers.

There are other incentives in life other than money.

scotty794• 13 years ago

I would. Financing development with monopoly on making copies is ridiculous unenforcible idea when anybody can make a copy for anybody at near zero cost with use of equipment posessed by almost anybody. It should be abandoned as fast as it can be with all its legislative luggage. Setting max price of software copy would be awesome step in the right direction.

ashleyw• 13 years ago

No, a more accurate comparison would be that Germany declares that a software algorithm cannot be patented.

I think we have a lot of support for that here. :)

rdtsc2• 13 years ago

Without this "privilege" a company has no incentive to develop anything new

How much are they developing vs how much are they marketing? A lot of pharmacological studies are preformed by public universities and an insignificant amount of money that many think goes to "research" instead goes to "do you have <made_up_disease>? talk to your doctor about <our_new_drug?>" type commercials and other marketing.

Try this for a comparison - Germany declares that all software sold in their country should be priced at $1 or less.

If that software will end up saving lives, then it should be sold for $1 or less and the government should develop/buy it/fund it.

Or how about another comparison. Open source software is priced at $0. Are people writing it? Why? They shouldn't according to your logic. So maybe someone will bother developing and researching life saving drugs without being granted monopoly on its distribution.

rahimnathwani• 13 years ago

Germany declares that all software sold in their country should be priced at $1 or less

It would be OK if this were known in advance; software developers could decide whether the absence of future German revenue meant they should (i) not develop a German version and/or (ii) not develop a product at all (as the non-German revenue would not be sufficient).

Changing the goalposts after development decisions are made is different.

mkautzm• 13 years ago

If someone develops software that can directly save a life, then yes, it should be affordable by literally everyone.

The same applies for medicine. If you are with-holding drugs that can literally cure cancer but require you to cough up, say, $50,000, then I sincerely hope a hell exists for you because that is straight-up unapologetic evil.

If R&D is that expensive and you need to recoup costs, then the government should fund the research of such drugs.

No matter what the circumstances however, you don't get to restrict access to a drug that cures cancer based on financial capability and somehow take the moral high ground.

skywhopper2• 13 years ago

I personally would love to see all software be given away for free. Put all the code on GitHub in the public domain. That's the world I work towards. There'd be just as much money to be made, only it would be spent on actually employing workers and getting stuff done and not on fighting over licenses and intellectual "property".

The patent laws of the US are responsible for Bayer's business model, and in a lot of ways it's a good tradeoff. But it's not the only possible way to figure this stuff out, nor is the money the only possible incentive.

Anyway, it's not like Bayer wasn't aware of India's patent laws. They are still going to make billions on this drug, regardless of what India does, and they can spend that money bribing its government officials to change their patent laws. Don't worry, it'll all work out in the end.

ivanhoe• 13 years ago

I wonder how much of that money is spent on the actual R&D and how much goes to the fancy looking offices, management, administration, marketing? When you can dictate the prices of course you'll set them as high as possible and than pump up the expanses, but with a bit of real competition I'm convinced you could significantly cut the prices and still make some money.

AlexC042• 13 years ago

Without this "privilege" a company has no incentive to develop anything new

While that is true about companies it is not true about people. There are numerous people who do research into specific medical conditions for reasons other than money. While I'm not saying Crowley didn't make a fair shake of money with his companies

http://en.wikipedia.org/wiki/John_Crowley_(biotech_executive...

There was a clear motivation to save his own, and other children's lives.

Would companies stop entirely or would not for profits arise in their place?

I think it's disingenuous to imply that there is no other way that medical research could ever happen.

One also has to examine the moral dilemma faced in this situation. Respect international intellectual property laws and quite literally allow millions to die OR "steal" the drug?

Now run the dilemma again but it's your own child.

Is it right? Would you do it?

Free software movements point to the probability that software would likely still exist in a world where it was declared that all software should be priced at ${arbitrary}.

I feel like the truth is far more nuanced than you're allowing for here. There's far more than money on the line and if I were the one dying of a $65,000/year cancer I'd also struggle to respect the international laws that were willing to consign me to death if the profit on the materials was in the 99% range.

cameldrv• 13 years ago

If they're going to price the drugs so high in India that no one can afford them, what is India getting out of the deal? All property rights (but especially intellectual property rights) are essentially a trade between the government, and indirectly the people. For real property, the Government gets tax and increased economic activity (leading to more tax) in exchange for agreeing to arrest anyone who uses your property without your permission. For intellectual property, the trade is that citizens get to use new and useful things, and there is more economic activity, in exchange for the government agreeing to arrest anyone who copies your product without permission. If the citizens can't get the new and useful thing, why should the government stop anyone who copies it?

drderidder• 13 years ago

witty sarcasm much?

lol - recursion.

rayiner2• 13 years ago

What is "theft" other than something that only exists in the context of government enforcement of an artificial privilege?

And is this privilege particularly artificial relative to others we accept readily? Most people believe that people should have the privilege to own land. Yet if you think about it, land possession is far less deserving of the government's protection than a drug formula. This drug is something Bayer created, that didn't exist before. Land is something that nobody created, that people simply claimed (in the U.S., those who "own it" derive their ownership from dispossessing Indians), that will continue to exist long after everyone who claims to "own it" is long dead. Why is land more deserving of an artificial government monopoly than a drug formula?

larubbio5• 13 years ago

Governments can take your land through Eminent Domain if it is shown to benefit society as a whole.

Also is the government "taking" the drug, or just not extending monopoly patent rights for it? Also even patents (in the US) have a provision that they be reasonable licensed in exchange for gaining the temporary monopoly.

Crito4• 13 years ago

Does the concept of possession exist because we have laws concerning theft? Or do laws concerning theft exist because we have a concept of possession?

Lawless animals have concepts of possession, even the concept of possession of land. The difference between humans and animals is that we have codified our social standards and generally do not have to resort to violence or direct threats of violence to resolve disputes over possession or territory.

slaxman3• 13 years ago

I think one thing that India has got right is the patent system. As I understand, you can't patent as product in India, you can only patent the process. Thus multiple companies can have multiple process patent on the same product. This actually encourages innovation and keep prices low (especially for drugs). $65,000 is extremely expensive considering that the average annual income in India is a mere $2000.

melling2• 13 years ago

Am I missing something because I'm not sure that a lot of new drug research is coming out of India. It would be great if there was because we could probably double the amount of new medicines.

Daishiman3• 13 years ago

You would have to prove that there would be more drug development in India without the current process, and I really doubt it would change anything.

denzil_correa2• 13 years ago

OTOH, The bureaucracy in the patent application process is a sorry state of affairs. The US PTO normal applications are processed faster than India PTO expedited applications.

ta43434• 13 years ago

That defeats the purpose of patents for drugs.

It's convenient for drugs that have already been discovered and validated, but the difficult part of making a drug is not the chemical process to produce it, but knowing which chemical to produce in the first place. Knowing where to tap with the hammer, if you will.

If you want there to be no patents for drugs, that's an argument to make, but this type of "patent" is just a fig leaf for not having patents at all.

slaxman3• 13 years ago

While that is one way of looking at it. It also encourages other companies to put in effort in finding different processes to produce the product. Whether the amount of effort involved is substantial or not is a different matter, but the end result is that drugs are very cheap in India (as it should be). Companies try to make money at scale and not by squeezing their customers dry.

My dentist recently told me about 2 drugs which are essentially the same. The drug made by the foreign company costs Rs. 200 (approx $4). On the other hand the India generic version costs Rs. 30 (approx 50cents).

johngalt• 13 years ago

It's interesting to see protectionism V2.0 play out via the patent system.

obblekk• 13 years ago

I know most people will oppose this, but what about the massive financial investment that Bayer took in development that the Indian company Natco didn't take. Surely Bayer should get some sort of payback.

alex_c• 13 years ago

Even if it's true, it's an absolutely boneheaded thing for a CEO to actually say.

yumraj• 13 years ago

They absolutely should be compensated - they always had the option of licensing it in India, or simply pricing it appropriately and benefit/reaching a much much larger market and make it up on volume. They decided to do neither.

noonespecial3• 13 years ago

As long as we're talking about what ought to be: Should the model we have be incentivizing the recoupment of investments using the threatpoint of death to extract maximum resources from choiceless "customers"?

However we do it, the answer to "how much will it cost?" when it comes to medicine needs to stop being "how much do you have?"

gaius• 13 years ago

Maybe India could fund its own NHS instead of nuclear weapons and space missions?

India is a country that likes to play poor when there's some advantage to be had, but it's a facade.

jpttsn5• 13 years ago

I agree that recoupment of investment is not a right, and as such laws are not here to help with that.

I think there's a key difference between the threat of death from a disease vs. say the threat of death at a robber's hand. Do you agree? If not, is it immoral/extortion whenever someone is charged money for a necessity?

mcintyre1994• 13 years ago

If the article is accurate, he doesn't want to sell in that market. I'd struggle to justify not letting somebody else do that for this sort of product when they have a law like this.

gus_massa3• 13 years ago

He doesn’t want to sell in that market at the price that the government would fix. If they can charge the same price than in USA then he will be happy to do business there.

denzil_correa2• 13 years ago

In case, if people missed this part

    The U.S. government has weighed in on the side of Bayer in 
    the patent case, at the highest levels of the India and the 
    US governments.

What can be the possible reason?

atonse• 13 years ago

Pretty simple to deduce. Bayer is probably a pretty big donor to various politicians. I wouldn't be surprised if high-level US officials have tried to pressure Indian officials with other things to make sure this works for American companies.

They've done it time and again with copyright law.

sailfast• 13 years ago

If United States patents can be discarded at will by global markets, it creates serious intellectual property concerns for research and development groups in the US.

Without a possible profit incentive, what will incentivize drug companies to spend billions on cancer medication or other research if the compound will be lifted from them the next day and sold at pill cost, not compounded R&D cost?

It's definitely in US interests (both public and private sector) to strengthen the value of a US patent and US patent law globally.

Why would a government not argue in favor of this?

rhino369• 13 years ago

So much of what America produces is intellectual property. If India wants to take it without paying, when then America should stop buying Indian products.

The problem is both sides are being assholes here. Bayer is charging WAY to much for the Indian market, but the compulsory license is way too cheap.

liquidise• 13 years ago

Legalities of all this aside, these comments perpetuate many of the worst stereotypes of major pharmaceutical companies. This will not be smoothed over lightly.

shill• 13 years ago

This is the same company that sold off their stock of HIV contaminated medicine to hemophiliacs in Asian and Latin America in the mid 1980s while a newer version was sold to western patients.

jack-r-abbit• 13 years ago

Also the same company that sued the European Commission over a ban on pesticides that are killing bees.

jpttsn5• 13 years ago

Direct statements indeed. The honesty is refreshing, even if it will naturally be countered for weeks by PR. It's interesting to gain some insight into how this sort of person views the world.

nova2• 13 years ago

We need an alternative mechanism to fund medical research. Granting artificial monopolies aka patents isn't cutting it, and it's getting highly unethical.

Given that what we currently have isn't a free-market approach at all I wonder why we couldn't just fund it directly, via taxes. The cost could be shared between countries AND the research could be directed. The companies could be pure R/D labs, leaving the manufacturing to others.

DennisP3• 13 years ago

One group that would benefit from cheap patent-free drugs is health insurers. It would probably be worthwhile for them to fund development, except they have a public goods problem. Insurers who didn't contribute could freeload off those who did.

Recognizing that, Bernie Sanders introduced a bill a couple years back, taxing insurers for patent-free drug development. To keep the government from picking research projects (which it tends to do very conservatively), it would fund prizes instead of funding research directly.

http://boingboing.net/2011/05/27/bernie-sanders-intro.html

pravda• 13 years ago

One group that would benefit from cheap patent-free drugs is health insurers.

Um...exactly the opposite. Under the ACA "the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders."

So, if an insurance company spends $65,000 on a drug, they get 65k/.85 or $76,470 in premiums, earning $11,470 in profit.

If the drug only cost $10,000 the profit would just be $1,764.

The more expensive drugs are, the more money health insurers make. Health insurers are harmed by cheap patent-free drugs.

fragsworth2• 13 years ago

I think it's really hard to say. The efficiency provided by companies trying to make money can't be overlooked. They make every attempt to reduce costs and increase development speed, and it's possible that in the long run, things are better.

Also, if research is publicly funded, it would probably tend to focus on whatever the public is more aware of. Public awareness of diseases doesn't do correlate well to the severity of the problem. For instance:

http://dailycaller.com/2010/10/05/breast-cancer-receives-muc...

If the market wasn't given any incentives to perform research on its own, then I could see this problem becoming magnified.

mixedbit2• 13 years ago

The thing is, are there really economical incentives for companies to find cheap and efficient cancer drug?

nova2• 13 years ago

They make every attempt to reduce costs and increase development speed, and it's possible that in the long run, things are better.

My point is that research companies should focus on discovering how the human body works and reacts to different substances, not how to create the drug efficiently. Their output should be scientific knowledge (and we would pay them for that), not industrial processes. That can be left to manufacturing companies, operating in a mostly-free market (but with quality regulations) and all that.

Also, if research is publicly funded, it would probably tend to focus on whatever the public is more aware of. Public awareness of diseases doesn't do correlate well to the severity of the problem.

True. But profitability isn't really the same as the severity or "ethical" importance either, and that's how things are today. Directly funding research is how things are done with particle physics for example.

canvia• 13 years ago

Companies are also motivated by profits. This can create a perverse incentive to focus on treatment methods and ignore prevention/cures. They might also focus more on problems that effect "rich" people (blood pressure, cholesterol, weight loss, depression) while ignoring things that kill many poor people like malaria.

Houshalter4• 13 years ago

Why not both? Why can't we increase government funding without banning companies from doing their own research (or at least profiting from it?) It's very unlikely two labs would discover the exact same drug and then patent it so no one else can use it. And creating the maximum amount of investment in medical research seems like a good idea.

codegeek• 13 years ago

"At a daily dose of 4 tablets, this comes to $5,637 per month,"

"..is for western patients who can afford it"

Oh the irony, at least in the US. How many can actually pay $5,637 per month out of their own pockets if not for health insurance which is mostly subsidized by your employer if you are lucky enough to have a job. On the other hand, India is still more of a "I pay you out of pocket, how much do you charge" system.

Having said that, I am not necessarily saying that protecting your IP/inventions is a bad thing. But before you start comparing countries/markets, make sure you have enough knowledge of how a particular market operates.

DennisP3• 13 years ago

Now that the ACA is in force, you don't need an employer. Just go on the healthcare.gov or your state's equivalent, buy a plan with no worry about pre-existing conditions, and get a max annual out-of-pocket of several thousand dollars. If your income is low enough you'll even get your premiums subsidized.

(But personally I'm against pharma patents. There are ways to solve public goods problems other than turning them into private goods.)

grecy2• 13 years ago

America is certainly nowhere near the top of Developed western countries, so maybe they're not even talking about Americans when they say "..is for western patients who can afford it"

scott_karana2• 13 years ago

Money is typically the criteria used for "if you can afford it".

American still has the greatest GDP, and the the greatest household income (average and median, as I recall).

fragsworth2• 13 years ago

I'm not sure what exactly the history of this product is, but my guess is it's a treatment that:

1) Cost a shitload to research

2) Is only applicable to a handful of patients

If this is true, then I don't see what else they should do. If they aren't allowed to sell it at the price they want, then perhaps the research wouldn't have been funded in the first place?

piyush_soni2• 13 years ago

It's a life saving drug of last resorts. And considering the population of India, 'a handful' is too many :).

tokenadult2• 13 years ago

The first journalistic source to report the statement,[1] an article published by Bloomberg Business Week, includes the statement near the end of a general article on patent protection in India. Both the reporter and editor who put the story together are based in India and (at a wild guess, based on their names) are perhaps citizens of India. This sort of national policy issue, of course, often results in different countries coming up with differing laws. Then the countries have to resolve differences about their laws in negotiations when they look at overall trade between their countries. And that (nothing particularly nefarious) is all that is involved in the United States negotiating with India about this issue.

I'm very glad that somebody is developing new medical treatments (both drugs and medical devices). All of that work is very expensive, and much of it results in products that never turn a profit. I can't think of any social justice reason why my childhood best friend, a first-generation college graduate from a working class family, who now develops medical devices, should have to work for free. Nor can I think of any social justice reason why anyone who needs effective medical treatment should be without it, in general, but until new medical treatments are invented, wishing doesn't make that so. India's approach to compulsory licensing on non-negotiated terms for new treatments developed outside India may be very politically appealing in India, but it's not completely clear that that is the best national policy for responding to the grave health problems[2] that still exist in India.

[1] http://www.businessweek.com/news/2014-01-21/merck-to-bristol...

[2] http://articles.economictimes.indiatimes.com/2013-06-23/news...

http://online.wsj.com/news/articles/SB1000142405270230344420...

http://www.iom.edu/Reports/2012/Facing-the-Reality-of-Drug-R...

http://www.tbcindia.nic.in/pdfs/RNTCP%20Response%20DR%20TB%2...

AFTER EDIT: I see some wild karma swings on this comment, so feel free to tell me what you really feel about this comment. India, of course, would have no objection to how drug companies market drugs if only it had a country full of companies that are already innovating affordably to solve all the health problems of India.

joesmo• 13 years ago

Basically, what Bayer is asking is for India to enforce US patent law and to not enforce Indian patent law (which allows this exception). It doesn't help that Bayer's CEO comes off as extremely racist: '“We did not develop this medicine for Indians”.'

icegreentea• 13 years ago

Went digging through for past articles. This has been a long-running situation. For context, Nexavar was patented in India in 2008 (it's first FDA approval, for advanced liver cancer was granted in 2007, a process started in 2004). According to this article [1] from last year, Bayer was running a program that gave ~70% of Nexavar users a 90% discount from their in India market rate ($5500 USD monthly). The generic maker sells at $176 monthly, and per licensing fees, pays Bayer 6% of net sales.

Also, about the nature of the drug. It's basically a treatment of last resort. The initial study that granted it FDA approval for in advanced liver cancer showed a 3-4 month increase in median survival time compared to placebo (remember, this is with cases that have exhausted other options). Further studies show some greater synergistic effects combined with other treatments. Also, in a study with a smaller population, and slightly different subtype of liver cancer showed an overall median survival time of 26 months (it's unclear to me from reading the abstracts how the baseline conditions of the two trial's patients compare, so it's difficult to directly compare their results).

[1] http://www.thehindubusinessline.com/companies/bayer-to-appea...

veidr• 13 years ago

India's setting a great precedent by granting exclusive rights granted by a patent only in combination with a requirement that the result be reasonable.

I think this kind of tweak to the patent system should be extended beyond medical life-or-death kind of products.

Our society grants these exclusive rights under certain conditions, because as a society we believe doing so benefits us all. There is no inherent natural right to have a patent (unlike what this bozo seems to believe), it is an artificial construct humans made up to improve society.

There is no reason we shouldn't tweak the parameters of patentability and the benefits received on an ongoing basis.

ExpendableGuy• 13 years ago

Just thought I'd share this for context:

"It takes about 10-15 years to develop one new medicine from the time it is discovered to when it is available for treating patients. The average cost to research and develop each successful drug is estimated to be $800 million to $1 billion. This number includes the cost of the thousands of failures: For every 5,000-10,000 compounds that enter the research and development (R&D) pipeline, ultimately only one receives approval."

Source: http://www.innovation.org/drug_discovery/objects/pdf/RD_Broc...

refurb6• 13 years ago

This is one hell of a hit piece. I'd love to see the actual quote from the CEO since this has gotten ZERO press in the mainstream media. I'm assuming he meant the drug was priced for westerns who could afford it, not that the company would prefer if Indians with cancer would just die.

The thing that makes me laugh about the IP struggle going on in India is that Indian companies who have developed their own generic versions have often priced their drugs not much lower than what western companies have[1]. This isn't about providing access to medicines (since many western companies, including Bayer, have patient assistance programs that offer free drug to Indians), this is about protecting and supporting the Indian pharmaceutical manufacturers.

[1] Biocon just launched their biosimilar version of Genentech's Herceptin. Genentech's price in India is $1,366 per month while Biocon's is $933 per month, still well out of the reach of most Indians.

http://www.bloomberg.com/news/2014-01-20/roche-herceptin-cop...

Bayer CEO: Nexavar cancer drug is for "western patients who can afford it.”

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