Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Indian Government uses special powers to slash cancer drug price by 97%

timesofindia.indiatimes.com

Post reply on HN
Print view View original

61–70 of 227 posts

Re: Indian Government uses special powers to slash cancer drug price by 97%

#61

Post by vamsee »

leonth wrote: post #9
corin_ wrote: post #5

I think few people would argue that drug companies' prices are reasonable, and when it comes to life vs. death I no longer care much about the "they're a business, they're allowed to make a profit" line - of course it's still true, and of course they are, but there's a (subjective) line between "making a good profit" and killing people through greed. That said, what pricing would be fair? When people claim that these…

Truth is, clinical trials are mind-bogglingly expensive and takes years for turnover. Also some newer drugs (I'm not sure about Nexavar) are rightfully expensive to manufacture due to requirements in equipment, sterile conditions, etc. If I were to say anything negative about this it would be that this sets a bad precedent for any new drugs coming to India -- knowing that the government can effectively void out drug…

That's alright, as an Indian I support this action, and am ready to face the consequences. After all, we have 'socialist' in the constitutional definition of the republic. It's about time we invoked it for a good cause once in a while.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#62

Post by antihero »

JunkDNA wrote: post #36

I worked in the drug R&D business for over 8 years. I still follow the industry closely. Some things always get lost in these discussions. First, manufacturing an existing drug is absurdly cheap. Modern industrial chemistry ensures this for all small molecule drugs (note that this is not the same case for the "biologics" which are often fiendishly difficult to make). Almost all the cost in a drug is the manufacturer…

Why has the cost gone up so much, and what can be done to reduce it?

Re: Indian Government uses special powers to slash cancer drug price by 97%

#63

Post by crusso »

wisty wrote: post #20
corin_ wrote: post #5

I think few people would argue that drug companies' prices are reasonable, and when it comes to life vs. death I no longer care much about the "they're a business, they're allowed to make a profit" line - of course it's still true, and of course they are, but there's a (subjective) line between "making a good profit" and killing people through greed. That said, what pricing would be fair? When people claim that these…

Perhaps the FDA should bankroll clinical trials, subject to a pre-agreed price and a reasonable case that the trial will work out. Monopoly sellers and monopoly buyers is fairer than a monopoly seller.

So instead of private companies employing the top researchers who are jockeying for success in an open market that decides the winners and losers through doctors' and consumers' choices, you end up with winners and losers being picked by politicians, bureaucrats, and lobbyists.

Then when the whole system is ineffective, corrupt, counter-productive, and an enormous wastes our tax dollars (see the current FDA, PTO, DOE, etc.), what will happen? Well, at best, nothing. At worst, the Statists will use the lack of success as an excuse to take over even more of the system. Maybe the FDA would then want to hire the researchers to design and test the drugs in the first place. They would need a bigger budget for that.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#64

Post by moonchrome »

gaius wrote: post #59
moonchrome wrote: post #58

Earlier quoted context omitted.

>Better to just negotiate cleanly with the company for the drug you want, and sell it all on your own market like the NHS does. Well that's what I meant negotiate a "fair" price that would encourage further investment but you don't overpay - the problem is that unless you have competition/substitutes you can't have market pricing so you need to have a good estimate of "fair" price, eg. say a company comes up with 100…

If a company takes on debt to finance development, then "the discovery has already been made" isn't the same as "the discovery has already been paid for".

No I'm just saying that you aren't benefiting the consumers after the discovery has been made anymore than a generic copy because copying knowledge is free/it's not a scarce resource once discovered. You might not cover your investments which is why I say you should be compensated for your invention based on the estimated investment cost, plus any other investments made and profit on top of that.

All I'm saying is that if we accept that there is a market failure where you can't recover your investment because you don't have enough advantages on the market (without IP) we should consider compensating the innovator in a way that would stimulate further investment in the area, and when that is the objective you can measure/model what is the minimum profit incentive you need to provide to guarantee acceptable levels of R&D investment.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#65

Post by tripzilch »

JunkDNA wrote: post #36

I worked in the drug R&D business for over 8 years. I still follow the industry closely. Some things always get lost in these discussions. First, manufacturing an existing drug is absurdly cheap. Modern industrial chemistry ensures this for all small molecule drugs (note that this is not the same case for the "biologics" which are often fiendishly difficult to make). Almost all the cost in a drug is the manufacturer…

But most of those R&D costs are for getting "FDA" approval. I don't see why India (or anyone, really) should pay for lining the pockets of the USA's inefficient and corrupt bureaucratic machinery.

Or I could be wrong and those $12B really goes into equipment and lab workers wages, but you won't blame me for finding it real hard to believe until I see at least a rough breakdown of how those costs are summed up.

From the article: "Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details".

That either means they don't know themselves, or it means that the larger part of the budget got "lost" in requesting approval forms paper pushing greasing cogs and lobbying politicians.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#66

Post by relix »

ttt_ wrote: post #34
digamber_kamat wrote: post #14

Government was forced to make such decision because Bayer sold these drugs at a price unaffordable to most Indians. This to me seems like a very stupid decision from Bayer's management. The shareholders must act against the board now. however because of such decisions companies will find it risky to invest in life saving drug research. I think government should also take some steps to win their confidence.

>> however because of such decisions companies will find it risky to invest in life saving drug research. I disagree. That mentality is precisely the reason that they are overpricing now (and always have done so) as much as they can. People will always need life saving drugs, and ordinary drugs as well. Terminal and cronical patients will always try both traditional and new drugs (or the state will provide it to them…

You're talking about an infinite timeline where they are the sole seller of a drug that is used indefinitely.

This is false.

When patents expire the drug is also made by generic drug making companies for cheap. So upper bound of getting a ROI is the lifetime of a patent (30 years for drugs iirc, 10 years longer because it takes about 10 years to develop, so still effectively 20 years).

For every drug that is successful, they pour tons of money into drugs that are eventually considered useless. So the R&D isn't solely for the one successful drug, but also for the losses.

A competitor might come in 5 years with a drug for the same problem, that works better. Now the timespan for any ROI has been cut short to 5 years.

Looking at the profits of pharmaceutical companies: sure, most medicine is probably overpriced. But saying that they can get a good ROI at any price is false. They will need to recoup the billions spent on R&D.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#67

Post by crusso »

x3c wrote: post #55

I propose the following solution. R&D stays in private sector. All successful drugs are bought by the government at the cost of R&D and a sizable profit. The government, then, distributes it. Government can control the distribution and Pvt. markets can control the invention. Government can then tie up with other govts. and allow sales of the said medicine in those countries. It's not an ideal solution, but it has bes…

So the government then picks "successful drugs" and hands out massive amounts of money to those companies based on the definition of success as determined by politicians, bureaucrats, and lobbyists.

Sounds like a nonstarter to me.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#68

Post by JumpCrisscross »

tripzilch wrote: post #60
JumpCrisscross wrote: post #7

Earlier quoted context omitted.

This is a difficult decision to rule on, without resorting to petty emotions, without access to the underlying data. One must balance the incentive for drug companies to develop drugs (and get that development financed) with the price inelasticity of the healthcare market. There is marginal cost, the cost to produce one more product independent of development cost, and fully amortised cost, which amortises the develo…

While assuming that a life tomorrow is worth about a life today might be reasonable, we're talking about research costs for drugs, and the comparison does not hold to assume that a new drug tomorrow is worth about an already existing drug today. New drugs are often about squeezing out those last few years of life-expectancy, and even if they're not, they're a marginal increase over today's drugs. Meanwhile today's dr…

Every drug we enjoy today was once a future drug. Your reasoning promotes the equivalent of seizing all investment dollars from VC and IPO investors and using it to spread existing inventions and innovations to a broader base.

Lives are being saved and quality of life improving...for everyone who doesn't have a disease we haven't yet cured or which hasn't become treatment resistant (biology is adamantly lassez-faire).

The industry needs regulatory upheaval and new ways of financing itself. But if the response is to throw away the ability to recoup the initial investment profitably, medical research will just start devoting funds to making treatments exclusive, e.g. only invest in custom/on-site medicine.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#69

Post by w1ntermute »

Does anyone else find it appalling that the American government and American companies have the gall to complain about intellectual property violations in developing countries like China and India? Until the late 1800s, American IP law explicitly excluded foreigners from IP rights. That's right, forget about lax enforcement (like you often see in developing nations nowadays) - you could violate foreign IP rights in public view and not a thing would be done about it.

And that's exactly what Americans and American companies did - they went to Europe, took the latest IP, brought it back to America, and copied it. Charles Dickens went on a tour of America to try to get people to buy legitimate copies of his books, which no Americans were doing at that point. By the end of his tour, he realized this was a pointless venture, referring to America as a "nation of pirates". Doesn't sound that different from what contemporary American industry trade groups call China and India, does it?

And it wasn't just international - domestic IP rights violations were endemic as well. The reason the movie industry developed in California was because the movie studios (the same people that are now crying foul about copyright violations) were trying to escape Thomas Edison and his patents on moving picture technology. Not only was Edison's lab in New Jersey, distancing them geographically, but the Ninth Circuit Court of Appeals (which covers California) took a more "relaxed" view of IP rights.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#70

Post by crusso »

Tuna-Fish wrote: post #51
rmc wrote: post #13

Earlier quoted context omitted.

remember that Bayer won't have to manufactor it, someone else does. They get a cut (6%) without having to do any work

As others put it, the manufacture of simple chemicals in the quantities involved in pharmaceuticals is effectively free. As in, give me 100k and I'll be able to make enough of the drug for the whole world for the next hundred years. The packaging of most pharmaceuticals is more expensive than the manufacture of their contents. The cost is overwhelmingly in R&D -- finding the chemicals, proving it doesn't kill people,…

Don't forget a huge expense: Battling lawsuits (mostly frivolous) from users of the drug and potentially paying out huge settlements.
Post reply on HN