After India And Brazil, Now China Takes Steps To Allow Cheap Versions Of Patented Drugs
from the tipping-point dept
In recent months, Techdirt has reported on an important development in the world of medicine, as both India and Brazil have allowed local companies to produce cheap generic versions of drugs covered by patents. In an even bigger blow to Western pharmaceutical companies, it looks like China is following suit:
China has overhauled parts of its intellectual property laws to allow its drug makers to make cheap copies of medicines still under patent protection in an initiative likely to unnerve foreign pharmaceutical companies.
Even worse for those companies, the proposed legislation would allow Chinese generics to be sold in other countries:
For “reasons of public health”, eligible drug makers can also ask to export these medicines to other countries, including members of the World Trade Organisation.
Both ACTA and TPP have clauses that would probably make that more difficult — another reason why China is unlikely to sign up for either.
As the Reuters article quoted above explains, China has prepared this move carefully, consulting with other countries that have taken this route in order to prevent it being challenged in international forums like the WTO. It is yet another example of China moving up the production chain:
China’s stable of generic drug makers has been producing the key ingredients — or active pharmaceutical ingredients (APIs) — in medicines for years, exporting them to foreign drug makers, which then sell the patented finished products back to China at prices which the average Chinese citizen often cannot afford.
Pharmaceutical companies in the West will doubtless fight this directly in the courts and indirectly through lobbying of their respective governments, but it’s hard to see China backing down, since that would have negative consequences for the health of its citizens and entail an unacceptable loss of face.
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Filed Under: acta, brazil, china, generic drugs, india, pharmaceuticals, tpp
Comments on “After India And Brazil, Now China Takes Steps To Allow Cheap Versions Of Patented Drugs”
I think there should be a law to let any company make drugs at generic cost for all drugs that could be considered a must in someones life.
Nobody deserves to be sick just because they can’t afford medications. The amount of greed some people display is sickening..
Cheap Chinese Drugs
Sign me up, just so long as they don’t all smell like Harbor Freight.
How sad is it that drugs from China and Brazil are better than those from the United States.
Wonder what will be the likely reaction by the multitude of foreign pharmaceutical companies that have heavily invested in the establishment of JVs with Chinese companies for the construction and staffing of R&D and production facilities in China?
Wonder what will be the likely reaction when students from China apply for visas to study at foreign universities engaging in the type of research that is necessary to feed a pipeline of qualified students into the Chinese industry?
If China is determined to go down this road, it will be rough ride indeed.
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It’s not really that they are better, but more just like what was written:
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“Wonder what will be the likely reaction by the multitude of foreign pharmaceutical companies that have heavily invested in the establishment of JVs with Chinese companies for the construction and staffing of R&D and production facilities in China?”
I imagine they will complain and lobby, and at the end of the day settle for making more drugs and selling them to countries who are willing to pay their excessive fees (and the countries with easy means of protecting their patents)
“Wonder what will be the likely reaction when students from China apply for visas to study at foreign universities engaging in the type of research that is necessary to feed a pipeline of qualified students into the Chinese industry?”
Not sure what you think is going to happen here. You think the world is going to start boycotting China? We need them more than they need us.
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What??? are you serious?
Hahahahahahahahahahahahaha
Here’s a scenario for you.
1. Foreign universities (and by foreign I gather you mean USA since AUST, UK, EU ones will never be stupid enough to contemplate this) restrict access to Chinese students
2. University wonders in 6 months time.. Where the hell has all our money gone?
3. Chinese students go to other Universities in AUST (they are already) UK and EU.
4. USA Universities get less and less money, finding themselves less and less relevant on international stage.
5. USA discovers all R&D is being done elsewhere like EU, UK, AUST, ASIA
6. Rest of world profits!
If China is determined to go down this road, it will be rough ride indeed.
You mean for the USA Pharma corporations? I agree!
If you instead are talking about somehow China feeling the wrath of economic sanctions…
Bwahahahahahahahahahahahaha
those pirate thieves are stealing everything from the lawyers that patent everything. they should be put to jail because their offense is worse than murder. who cares about innovation and saving lives because enforcing patents is much more important
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Actually, one of the things that may happen is that the pharma companies may move away from using china as a source of raw materials / ingredients.
American consumers should be very upset about this move, as it is the Chinese companies who have profited from the sale of the raw materials and have used the money to build their generic drug infrastructure, and now they are able to take the drugs created in other countries and use them at a fraction of the price. Basically, US consumers are paying for development, and China will reap a free windfall.
American consumers screwed once again – this time by the Chinese government directly.
Western Pharmarceutical companies have themselves to blame for refusing to provide life saving medicine at an affordable price to 3rd world countries.. also the US is heavily in dept to China, any move to retaliate can have severe consequence.
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You mean the drug companies?
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I referenced the industry broadly since it is populated with companies located primarily in the US and Europe.
Virtually all of the companies have established research and production ties with Chinese companies, including the construction of facilities in China.
Just my opinion, but it seems like wishful thinking that trade sanctions will not be aggressively pursued.
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“Basically, US consumers are paying for development, and China will reap a free windfall.”
China & Japan conduct their own R&D, U.S. merely gets patents on whatever it can. Sure, the U.S. conducts R&D too, but it’s not like countries consider the R&D of other countries. Most countries develop their own drugs and conduct their own R&D, it’s very difficult to prove who copied whom or if they both came up with similar drugs independently.
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Trade sanctions can be pursued as much as they will be, though they mean squat in the real world when Europe, ASIA (and that includes all of ASIA not just China, India, Japan, Korea, Vietnam), Australia/NZ, when all have mandatory legislative ability already to allow generic branding and importation that is NOT controlled by the USA and instead by their commitment to what America calls Socialistic medicine, where they instead call it Ethical and Common sense medical practice!
And just because they have established ties with China means nothing if China decides to enact laws.. you really think they haven’t looked at chilling effects on their own economy? There are none. And if you think they care one iota about American interests in conflict with their own interests you are living in another reality.
The world is beginning to sit up and smell the bullshit and wonder “why the hell are we listening to the 5%”
I wouldn’t get to eager about who’s gonna get hit with any sort of punishment. If you’ve missed it, look at schools today. The Bush left over of no-child-left-behind has led to school teachers teaching how to pass the test they are graded on for performance, not for teaching education. Prime example in Fla high school students did so poorly that the test had to be downgraded to 50% being a passing grade.
That’s your future rocket scientists and the future don’t look so good. Every job it seems that can be exported is gone from this shore, leaving service jobs and ditch digging jobs that can’t be exported.
First question is where are these future drug patents going to come from? The second one is who do they expect to pay those exorbitant prices in the future?
It’s already way, way, way, out of hand and these countries are doing something about it for their people rather than trying to do a legal hold up on the financially.
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So on this logic:
* No countries can profit on anything if it effects US interests?
* No countries can use their natural resources unless it makes the USA and it’s citizens more wealth.
* No country can set their own laws if it intrudes on USA interests
Entitlement much?
Here’s an idea.. use your own raw materials, manufacture your own products, invent and research your own damn stuff! Stop trying to think you are so hard done by. Welcome to reality and the world! Entitlement Syndromes and petulant behaviour not allowed
I wonder why you guys are defending the US drug companies.. US citizen are getting screwed royally.. Most of the time the basic science are done by researchers in the universities which are funded by NIH which is basically tax money. Then the drugs companies buy the patents and put out out-of-proportion-to-cost medicine. They make billions while patients (US patients even) lay dying. Any call for lowering the price meet with heavy resistance and excuse that R&D cost are high while in fact they are low. It’s the marketing cost and the CEO salary that is high. I should know, I used to do research in biotech area. (Now I’m a dentist.)
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china owns about 1 trillion of our debt. about 10 trillion is held internally among the citizens of the country so we are not that deeply indebted to them.
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you are definetly correct on this one. i think a study was done on this and R&D costs were about 1/100th what they were claimed at. could be wrong though
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Be careful with your comments, for they reveal an unwarranted sense of superiority.
There can be R&D of any level in Brazil and China; both countries are home to extremly smart people.
so, either go without a drug because it’s unnecessarily too expensive and die or buy a cheaper, just as effective version and live. what road would you go down?
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Consdiering that around 95% of all manufactured goods on the market are currently made in China and Korea, kinda hard to force economic sanctions on them. For a start, Steve Jobs woudl spin in his grave at Apple’s failure. Then HP, RIM, and pretty much any tech manufacturer base din the US will either fail ro try and move to China. At which point, China will mock mercilessly, then go “no.”
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But you’re indebted enough that China calling it in all at once would be a bad thing.
mandatory legislative ability already to allow generic branding and importation
New Zealand has another method to keep prices down, and that is the state drug-buying agency PHARMAC. This buys the medicines for the entire state-funded medical system. As you can imagine, that gives it pretty hefty bargaining power?power that drug companies in the US and elsewhere don?t like.
So whenever ?free-trade? agreements come up with the powerful countries where these companies are located, there is always the pressure to water down the power of PHARMAC.
I have no problem with this at all.For one thing and in secret this Government put together two Draconian Treaties (TPP & ACTA) and they tried to shell it out on this World.The Gov reared its ugly head for other Nation’s Citizens to see and many are pissed.Plus the White House was negotiating the toilet paper crap and not cluing in Congress over the fine details.US Gov and in turn our people will be the one to suffer not these other Nations.
Pharma Corps are probably one of the biggest factors in why Marijuana is illegal.And those fuckers charge over $1500 per month for the HEP-C Treatment I was on.
They do not allow a Genreic Version of Lunestra (now at over $250 per month ) which is a sleeping pill I took.I am now on Zolpidem and those cost $5.00 which is a big frakkin difference.
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Sure, right when everyone who made said life saving drug decides that their time and knowledge is not worth any money.
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you are missing their point.. they want to make affordable, generic drugs for their own citizen.. Why make bad drugs? it’ll be as good as any.. the bad drugs arguement is fear mongering on US drug companies’ part..
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Their time and knowledge worth money. but At 1000X or more the cost for more than 20 years? And really, it’s normally not their knowledge and time. I don’t think so.. go read my comments.
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Have you check Nobel prize winner’s list names lately? see how many are Chinese.. Superiority complex much?
Motivations
“that would have negative consequences for the health of its citizens and entail an unacceptable loss of face. “
I wonder which one controls policy more…
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This may be hard to understand, but not everyone is motivated solely by money.
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American consumers should be very upset about this move, as it is the Chinese companies who have profited from the sale of the raw materials and have used the money to build their generic drug infrastructure, and now they are able to take the drugs created in other countries and use them at a fraction of the price.
So, American pharma companies, in an effort to reduce their costs (and increase their profits), outsourced their supply chain to China. In doing so, they literally paid to jump start their competitors, who are now able to make similar quality products at lower prices. And the pharma companies will no longer be able to sell their overpriced products to generate obscene profits. Really, who couldn’t have seen this coming?
Why should we be upset by this? You think American consumers care that much about the healthy profit margins of Pfizer, Merck and Eli Lilly? I think consumers care more about being able to afford medicine. With the rising costs of healthcare, I doubt many will shed a tear over lost theoretical future profits of some companies who are widely seen as gouging their customers.
This is one area where the pattern system works ish.
It?s expensive to develop a drug, really really expensive, more expensive and risky than almost anything else. If you don?t believe me then just look at the books of any large pharma company. Its $10 to $100 of millions in R&D just to get one or possible two compounds that may work. Then pre-clinical trials, then phase 1,2 and finally 3 and if the compound passes each stage (over 75% don’t make it to phase 2). A typical phase 3 is $60+ to $100 million to run on its own for a single compound. So 15 years or so after you spent all that money trying to develop a drug you can finally sell it. Well that?s if your company lucky enough to get a single compound though the system.
So what if pharma companies want a return for risking so much so such a long time. It?s a high risk investment. More risky than investing in Greece government bonds at the moment.
To then only have at best 5 years to sell the new drug at a reasonable profit before it is out of pattern is quite frankly ridiculous when music (which let?s face a single person nocks up in a few days) is in pattern for so much longer.
So china and India want to stop new compounds being created because their poor cannot afford to pay for the latest drugs. If you want to put it in terms of lives saved then more are saved by the continued development of new compounds than would be saved by offering all new drugs available now at generic costs with the inevitable reduction of new research cause by the loss of new drugs high price sales.
Want my proof, look at AstraZeneca who since huge amounts of their current drugs are all coming off pattern are in an financial hole and are having to cut R&D by the site (1000s of researchers at a time).
So my message is it really is exceedingly expensive to develop a new drug. Like Apollo costs each time.
even crowdsourcing will not work to fund the R&D required.
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And that is a problem how?
The first wonder drug(penicillin) was developed by a U.K. team of scientists and patented by the U.S. then sold to Great Britain at inflated prices which Britain had to pay.
American consumers should be happy that corporate mandates are now being challenged and realize that if you know how to do it and can do it yourself there is little others can do to stop you from doing something.
A better system would be a system where everybody do research on this stuff around the world and share the results with everybody else, with the production of the results being left to the locals, now that would be great.
That is exactly what open source does, everybody in the world contribute to something and everybody can use it locally to create their own little business.
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Why is that sad? Surely it’s a good thing? This means the scumbag Americans can’t hold the rest of the world to ransom anymore.
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Hear hear! Well said 🙂
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I’ve heard that they spend more on advertising than R&D.
Really?
With notoriety in counterfeit, I will not put anything made in China inside my body. First it was food, now drugs. The value system is still too different to prioritize quality control over profits. I’ve read too many stories about counterfeit and I have personally been burned many times in trade due to counterfeit product.
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They really aren’t competitors, because that would suggest they are doing the same sort of things. The Chinese companies are just waiting for the US company to spend the money to develop the product, and then they turn around and make a “generic” for it without needing much research at all.
It’s just like movie piracy. If enough people do it such that there is no money in making it anymore, what is left? Those who produce the generics aren’t making new products, they are leeching off the old. Pirate sites are leeching off the mainstream movies. Remove the source, and both sides fail.
American consumers care when they stop being able to get new drugs, when research slows, or when they are entirely depending on a third world country for their meds.
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They really aren’t competitors, because that would suggest they are doing the same sort of things. The Chinese companies are just waiting for the US company to spend the money to develop the product, and then they turn around and make a “generic” for it without needing much research at all.
It’s just like movie piracy. If enough people do it such that there is no money in making it anymore, what is left? Those who produce the generics aren’t making new products, they are leeching off the old. Pirate sites are leeching off the mainstream movies. Remove the source, and both sides fail.
American consumers care when they stop being able to get new drugs, when research slows, or when they are entirely depending on a third world country for their meds.
taking profits out of medicine
> If enough people do it such that there is no money
> in making it anymore, what is left
Perhaps this will encourage taking the profit motive out of drugs and have it become a public supported endeavor. I won’t mind.
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This may be hard to understand but, try to follow along. Do you require food? Housing? Clothing? Video games? This computer you’re using to read this? How do you aquire those things without money? How do you aquire money without trading your labor and/or services to someone else? Do you sell your services to someone else at a loss? If you do sell your services to someone else for a loss, how do you afford to feed, house, cloth yourself/family? Would you possibly work harder if there weren’t some sort of reward for yourself/family? I think you’ll find that everyone behaves basically the same when it comes to seeking reward for themselves or their family.
Get what I’m saying?
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“The Chinese companies are just waiting for the US company to spend the money to develop the product, and then they turn around and make a “generic” for it without needing much research at all.”
[citation needed]
China does their own R&D and doesn’t need the U.S. to do R&D for it. I can just as easily claim that the Chinese does R&D and the U.S. obtains patents on whatever the Chinese come up with and such a claim is at least just as valid as yours (if not more valid).
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“American consumers care when they stop being able to get new drugs, when research slows, or when they are entirely depending on a third world country for their meds.”
The U.S. pharmaceutical industry is arguably the least innovative industry around and patents are most strongly embedded in this industry and have been for the longest. Industries with the fewest patents have been the most innovative and the pharmaceutical industry used to be much more innovative back before patents had such a strong influence on it and in areas where patents had the least amount of influence. Most medical advancements now are either being made in China/Japan or, if they’re being made in the U.S., they’re being made at taxpayer expense. The U.S. pharmaceutical industry hardly innovates despite being much more reliant on patents than the tech industry.
There is absolutely no evidence whatsoever that patents encourage medical/pharmaceutical advancements. Almost all of the evidence suggests the exact opposite, that patents hinder medical/pharmaceutical advancements.
http://levine.sscnet.ucla.edu/general/intellectual/against.htm
“American consumers care when they stop being able to get new drugs”
Absolutely, what we have now are simply a bunch of me too drugs that don’t deserve any patents whatsoever because they’re minor tweaks of existing drugs, tweaks that any competent doctor or chemist can come up with for their patients on an as-needed basis. I absolutely do care about the fact that pharmaceutical advancement in the U.S. has been declining as patent laws have been getting more rigid and I want IP abolished to encourage more innovation.
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(and U.S. entities usually end up with U.S. based patents on whatever gets developed either by other countries or at taxpayer expense).
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“If enough people do it such that there is no money in making it anymore, what is left?”
Your argument incorrectly, without evidence, assumes that IP laws are necessary for movie production.
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I think we should just abolish IP and especially pharmaceutical IP laws. The U.S. pharmaceutical industry is arguably the least innovative industry, partly thanks to IP laws, and there is no good reason to allow IP laws to continue hindering innovation.
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They really aren’t competitors, because that would suggest they are doing the same sort of things.
Aren’t they both making and selling pharmaceuticals?
The Chinese companies are just waiting for the US company to spend the money to develop the product, and then they turn around and make a “generic” for it without needing much research at all.
Aren’t most of the products US pharma companies end up producing based on research from universities and grants funded by our tax dollars? I’ll admit that the pharma companies do spend some money in bringing them to market, but their costs are not on the order of the hundreds of millions of dollars we see claimed in reports.
American consumers care when they stop being able to get new drugs, when research slows, or when they are entirely depending on a third world country for their meds.
I’m perfectly willing to take the chance on the highly improbable chance of those happening by getting rid of patents.
Luckily, since the pharma companies aren’t funding most the research, it will not slow. Thus, new drugs will come out, possibly at a faster pace due to researchers not afraid of being sued for patent infringement. And without patents, we won’t be dependant on a third world country, since if there’s a need for a drug, anyone who can make it can do so.
Vicious cycle
It’s time once again for some senators to grandstand about China “stealing” money and power from the US. Then, after drumming up support from the xenophobic masses, they can pass even more laws that protect a few well-paying companies and weaken their competitors.
What’s that? With all the companies that actually do work crippled, China has pulled even further ahead? Great, time for another round of grandstanding!
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No one is saying that money is not necessary. The problem is in the degree, not the nature. There’s a point at which it just crosses the line into avarice.
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I seem to have struck a nerve.
I stand by my comment: Not everyone is solely motivated by money.
To expand on that, yes, everyone needs money for food/shelter/luxuries. But we’re all motivated by more than that. I work for a living – but I like my job for more than the money. I get a lot of satisfaction in working to secure the company I work for’s computer systems – and thus to protect our customer’s information, and yes, money. There’s probably about a 1 in 3 or 4 chance that the bank I work for has yours in some form or another. If money was the only thing I cared about, I could get a lot more than I’m making now by selling what I know and my access to criminal organizations. Luckily for you, other things motivate me.
Specifically on topic from the original comment, the “everyone who made a life saving drug” not deciding to do so because they can’t make oodles of money from a big pharma company comment is bogus. It has been shown that much of the reaserch for those drugs is funded by tax payers through NIH grants. Mostly going to professors at universities who aren’t making a tremendous salary. They’re in the pursuit of knowledge, some for science’s sake. Others knowing that they’re helping people. Others may be going for fame or peer recognition. But it ain’t all about the money.
Good luck to them. Considering how well they are in making the baby formulas…
Rich Chinese still would buy a branded drugs (like they do with baby formula). And who cares if a few hundred will die from bad ones…
trump
The U.S. can — and should — learn from India’s, China’s, and Brazil’s example regarding compulsory patent licensing. Although innovators have a right to benefit financially from their intellectual property; sometimes basic human rights should trump revenue maximization.
drug rehab
It is time once again for some senators to grandstand about Chinese suppliers “stealing” cash and energy from the US. Then, after drumming up assistance from the xenophobic public, they can complete even more regulations that secure a few well-paying organizations and damage their opponents.Visit this site drug rehab
health
Specifically on topic from the original comment, the “everyone who made a life saving drug” not deciding to do so because they can’t make oodles of money from a big pharma company comment is bogus.
With notoriety in counterfeit, I will not put anything made in China inside my body. First it was food, now drugs. The value system is still too different to prioritize quality control over profits. I’ve read too many stories about counterfeit and I have personally been burned many times in trade due to counterfeit product.But it ain’t all about the money.
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After Turing Pharmaceuticals acquired the rights to Daraprim in August then jacked the price of the drug up 5000% it’s time Drug companies who have monopolies on life saving drugs learn a lesson.
They are here to serve. Not just to make money