India Finally Bows To US Pressure: Promises Not To Use Compulsory Licensing For Drugs

from the declaration-of-war-on-poor-cancer-patients dept

Techdirt has been covering India’s complex relationship with pharma patents since at least 2009. In particular, we’ve been following for years India’s use of compulsory licenses to provide its people with access to life-saving drugs at affordable prices. Naturally, Big Pharma companies in both the US and EU hate that, not least because it might encourage other countries to do the same. As a result, the US pharmaceutical industry in particular has been applying political pressure to get India to stop using compulsory licenses, even though they are a perfectly legitimate policy tool under the WTO TRIPS Agreement. Two years ago, Techdirt noted that India was already becoming more cautious on the compulsory licensing front, and a new report from Reuters suggests it may finally have bowed to US pressure:

India has given private assurances that it will not grant licences allowing local firms to override patents and make cheap copies of drugs by big Western drugmakers, a U.S. business advocacy group said.

The comments were revealed in a submission last month by the U.S.-India Business Council (USIBC) to the U.S. Trade Representative (USTR), which is reviewing global intellectual property laws for an annual report identifying trade barriers to U.S. companies.

There’s been no official confirmation from the Indian government of that decision, nor an explanation of why it has decided to give in, assuming it has. The Reuters article mentions the fact that India had been placed for two years in a row on the infamous Special 301 Report’s “Priority Watch List”. That’s one of the favorite ways in which PhRMA, the Pharmaceutical Research and Manufacturers of America, tries to bully countries — or even entire continents — into doing its bidding. But giving up compulsory licenses just to stay off the Special 301 naughty step seems an incredibly high price to pay, for reasons explained by Knowledge Ecology International (KEI):

“If such an agreement [between the Indian government and the US drug industry] in fact exists, this is extremely troubling news … this sort of pressure is basically a declaration of war on poor cancer patients,” KEI said in its own submission to the USTR last week.

Given the USIBC document that Reuters says it has seen, it seems likely that the Indian government has indeed given some sort of assurance to the US companies. But the fact that it has been kept quiet shows that the politicians are fully aware of how unpopular the move will be once the Indian public finds out about it. That provides some hope the policy could be reversed if enough people in India start complaining, as happened recently with software patents.

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Comments on “India Finally Bows To US Pressure: Promises Not To Use Compulsory Licensing For Drugs”

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29 Comments
jilocasin (profile) says:

As usual things are going in the absolutely wrong direction.

As usual things are going in the absolutely wrong direction. Current healthcare costs, and prescriptions being an ever bigger part of that, just keep rising. The current system is unsustainable.

It’s a classic case of market failure. People can not not get healthcare, unless they want to suffer and die. Without strong regulations, including price controls, the prices will just keep going up. Great if you are in the industry, disastrous for sick people and the economy in general. It’s quite literally a case of; your money or your life.

Whether or not the Affordable Care Act (a.k.a. Obamacare) is working is irrelevant. Even if it is, it’s trying to solve the wrong problem. The problem isn’t that there is a lack of universal health insurance, it’s that there’s a lack of universal (and affordable) health coverage.

Having a health insurance plan with for example a $10,000 deductible, 80% coinsurance, no prescription coverage, and very few doctors that will take it, isn’t much better than no coverage at all. With no coverage, at least you are saving on the premiums and you know more doctors will see you.

When Vermont tried single payer, it wasn’t the single payer part that doomed it, it was giving everyone coverage without having a way to contain healthcare costs.

India shouldn’t be giving up on using generics to produce reasonably priced medicine for its people. Instead the United States should be emulating India and making more use of compulsory licenses here.

Anonymous Coward says:

Re: As usual things are going in the absolutely wrong direction.

I totally agree with you that the medical field, big pharma in particular, is totally out of hand with pricing and it is unsustainable. Obamacare created a watch committee on drug prices but without any powers to do things beyond recommendation. This means that drug prices will continue to go up because there are no effective controls on them.

The big yodel about government assistance to those who can not afford the insurance costs, is not sustainable either. They will only give aid to the lowest plan, which means the highest deductibles for those who have to use the assistance. Due the high deductible costs, it’s next to unusable without bankrupting the one needing to use the services to get medical attention. One thing you can be sure of, it’s not going to get cheaper.

Within a few years, medical insurance will not be affordable nor will it cover many things. Costs will drive the insurance companies to rule out procedures as too expensive to do, while premiums will continue to go sky high till no one can afford them. The not too far off future sees medical as taking as much as 20% of the GDP.

Ninja (profile) says:

Re: Re: As usual things are going in the absolutely wrong direction.

I think regulatory framework will catch up before it reaches such monstrosity. If healthcare is that expensive it’s only sensible to have a Govt maintained health care infrastructure. Or direct price regulation. Expect fight, if such a numb attempt like The Affordable Care Act met so much resistance then said alternatives would be classified as the most evil Stalinist Marxist satanic thing ever in the US (as if the current system is working much better than any other).

Anonymous Coward says:

Re: Re: As usual things are going in the absolutely wrong direction.

..about government assistance to those who can not afford the insurance costs, is not sustainable either…

If you’re talking about the so-called subsidies to low income folks, there’s a trap nobody wants to talk about: said subsidies are considered taxable income to the recipients! I bet a lot of people were surprised to get a 1099 form for that.

Ninja (profile) says:

Re: As usual things are going in the absolutely wrong direction.

Indeed. There are a few areas in our lives where we are most vulnerable and that’s when the companies (that are composed of other human beings, keep that in mind) stab you in the back without defense. When a child is born, when people die and specially when health is involved. Birth and health are especially sensitive since it’s either you shell out the money or death occurs.

Anonymous Coward says:

Re: Re: As usual things are going in the absolutely wrong direction.

This is what we wanted.

In not so many words, this is the end result of our petty “Regulate Everything” mentality and the constant assault on Free Market.

America does not have a free market anymore, but people will still assault “Capitalism” like it is still in full swing. The market is an Oligarchy and every request for more government regulation consolidates that fact.

Get rid of most regulation and instead institute strong anti-monopoly & anti-trust laws to combat the negatives of a Capitalist market.

The reason people feel like Capitalism was not working is because we have not had it for a long fucking time! Sure some areas are still capitalistic, like the video game market, but healthcare has been an Oligarchy before anyone of us was born.

jilocasin (profile) says:

Re: Re: Re: Public costs, private profits.

Actually what we currently have is a corporatocracy. We might even have a fascist corporatocracy.

The Free Market is a myth. Always was, always will be. Capitalism is a nice prod, an incentive to put a little life into an economy. Just like a game of monopoly, capitalism hates a free market. The end result of a successful capitalistic system, is one person owning everything and everyone else slaves to the winner. Just take a look at Standard Oil, the Great Depression, etc. to see where a lack of regulation gets you.

Even those who advocate for a freer market understand that there are certain situations where the market will fail. Natural monopolies are one, it’s terribly inefficient to have a dozen water pipes into everyone’s home, and physically impossible to have a hundred roads between two villages. Healthcare is another area where the free market is ill equipped to function.

You can choose to buy Pepsi over Coke, or something else entirely based on the price/value that a particular company brings to the table. Competition between producers vying for consumers dollars. But even here, there need to be basic rules (regulations). If Coke stole all of its ingredients and utilized slave labourers it could probably produce it’s product much cheaper than Pepsi. That’s what a truly free market would allow. So even in areas amenable to market forces, there need to be some regulations.

Healthcare is something that when you need it you either get it or you die. There is no doing without, at least not for long. In addition, the people allowed to provide healthcare is heavily regulated, not just anyone can perform cardiac surgery (nor should they). Patents, a government granted monopoly [a.k.a. regulation] prohibits competitors from creating lower cost versions of life saving medicines. Which is the subject of the original article. Pharma is using regulations to stifle the Free Market driving up the cost of medicines in India.

So if you truly wanted the free market to dictate health care, you would have to be prepared for lots of people to suffer and die. As scrooge would have said we would just be removing some of the surplus population.

Hopefully you can see that the problem isn’t an end result of our:

‘…petty “Regulate Everything” mentality and the constant assault on the Free Market.’

It’s the result of the wrong regulation.

Anonymous Coward says:

This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it.

Abraham Lincoln
First Inaugural Address
Monday, March 4, 1861

Are we weary yet?

Anonymous Coward says:

Or, the Indian government just recognizes that without having patents, there is no incentive for Indian companies to create their own drugs instead of copying other countries. Their big them is “Make in India”. They don’t want to just make things, they want to invent them too, and they want to encourage companies to do so. Without patents, why would they bother in innovation?

That One Guy (profile) says:

Thinking long-term

You just have to look at it from their point of view. Sure keeping drugs from being even remotely affordable for the majority of people in a country will almost certainly lead to hundreds or even thousands of deaths that could have been avoided, but those profits will allow them to save dozens, dozens of lives of those able to afford future drugs!

That One Guy (profile) says:

Re: Re: Thinking long-term

Which might be a valid argument if the only possible source of new drugs were private companies rather than state-sponsored research, and the drug companies weren’t making absolutely obscene profits, indicating that they can stand to make slightly less and still get by just fine.

From a previous article:

… India has granted just such a compulsory license, covering a kidney and liver cancer drug marketed under the name Nexavar. Indian generic drug company Natco requested a license, noting that Nexavar was in short supply in India and exceptionally expensive. A typical dosage costs around $70,000 per year in India — something Bayer says is necessary to recoup the drug’s R&D costs. However, reports show that it cost less than $300 million to develop this drug (not to mention that the US government subsidized the process) and Bayer has already made billions selling the drug around the world. In a detailed ruling, India’s Controller of Patents (nice title) granted Natco the right to make the same drug, requiring it to sell it at a significantly lower price than Bayer sells Nexavar for, and then pay back to Bayer a 6% royalty rate (which is actually at the high end of what the UN recommends).

Compulsory licenses means the original company still gets paid, they just aren’t getting the absurd amounts they otherwise might get, from drugs priced completely out of range for most people.

Anonymous Coward says:

The new Hep C drugs is a cure, not a treatment. It costs about $80K here in the US, which is a good value, because a liver transplant costs about $600K. In India, that same drug costs $900 for the full treatment. Do you think that discrimination pricing is wrong? Do you not think that US companies that come up with new drugs should be rewarded?

If you want only generic drugs, that is fine, but I like modern medicine, not 20 year old medicine.

Srinivas says:

Haha

A verbal consent or promise is not legally binding. That being said, it may be true that Indian Govt. has agreed to stop issuing Compulsory Licenses, at least for time time. But when shit hits the fan, f*** promises – national interests take top priority.

We are past peak-HIV infections, past polio so there is no need for such drastic measures (remember Compulsory licenses are of last legal resort) to risk investments in other IP related sectors.

But there will come a time when India’s economic clout expands, coupled with an explosion of chronic conditions like diabetes or hearts attacks, then those circumstances will force the hand of this very Govt. to issue CLs for life saving drugs.

-Pharma Management Consultant

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