Why Chemotherapy That Costs $70,000 in the
U.S. Costs $2,500 in India, by Thomas Bollyky, 4/10/13
By rejecting patent
applications, developing countries have kept down the costs of much-needed
medications. Can they continue to do so without harming efforts to develop new
drugs?
Why does Gleevec, a leukemia
drug that costs $70,000 per year in the United States, cost just $2,500 in
India?
It's seemingly simple.
Gleevec is under patent in the U.S., but not in India. Accordingly, Novartis,
its Swiss-based manufacturer, may prevent competitors from making and selling
lower-cost versions of the drug in the U.S., but not in India.
Last week, India's highest
court rejected an application to patent Gleevec. While the legal issue in the
case is important -- the patentability of modifications to existing drugs under
Indian law -- the impact of the decision will likely be broader than just that
issue, escalating a long-simmering fight over patented cancer medications in
emerging markets.
U.S. patients will not indefinitely pay a 20-fold increase on the
price of medicines that Indian consumers pay.
Rejecting the Gleevec patent
application is not the only step that the Indian government has taken to
circumvent patents on cancer drugs. Last year, India issued a compulsory
license on Nexavar, a late-stage kidney and liver cancer treatment, enabling a
local drug firm to produce a generic version of this medicine without the
permission of Bayer, the patent holder. India has recently announced plans to
grant compulsory licenses on another leukemia drug and two breast cancer
therapies.
India is not alone.
Indonesia recently issued a compulsory license for a treatment for liver
cancer-causing hepatitis B. China and the Philippines amended their
pharmaceutical patent laws, making it easier for those governments to take
similar measures as India.
Three trends are driving
these moves, suggesting more fights over patients, patents, and drug prices are
forthcoming.
First, cancer rates are increasing
fast in many developing countries. With rising incomes and better access to
childhood vaccinations, people are living longer in most developed countries.
The major health risks worldwide are now behavioral, such as tobacco use and
household air pollution. The increases in longevity and exposure to behavioral
risks are outpacing the improvement in health and regulatory systems in
developing countries. As a result, people in these countries are developing
cancers younger, in greater numbers, and suffering more chronic disability for
cancer and other non-communicable diseases (NCDs) than ever seen in developed
countries.
Second, access to effective
cancer treatment, patented or otherwise, is limited in developing countries.
Most patients pay out-of-pocket for most of their medicines, and high prices
put drugs beyond their reach. Cancers that are preventable or treatable in
wealthy countries are death sentences in the developing world. Cervical cancer
is largely preventable in developed countries with the human papillomavirus
vaccine; in sub-Saharan Africa and South Asia, it is the leading cause of
cancer death among women. Ninety percent of children with leukemia in
high-income countries will be cured, but 90 percent of those with that disease in
low-income countries will die from it.
Ninety percent of children with leukemia in high-income countries
will be cured, but 90 percent of those with that disease in low-income
countries will die from it.
Third, middle-income
countries like India have both health and industrial policy reasons for
encouraging domestic production of cancer drugs. Cancer rates are growing
fastest in these populations, and governments are under pressure to better
address the health needs of their ailing citizens. India, China, and other
emerging nations are expanding coverage of medicines in their public sectors,
but expenditures are rising astonishingly fast. IMS Health projects that annual
drug spending in middle-income countries will double between 2012 and 2016, to
more than $300 billion. Requiring local production of cancer drugs lowers their
cost and also helps domestic manufacturers break into the oncology market, a
lucrative therapeutic area in which multinational drug firms are heavily
invested.
The measures that India and
other countries have taken -- compulsory licensing and adopting strict
standards on patentability -- are consistent with its international trade
commitments, but will be corrosive to the way that pharmaceutical research and
development (R&D) is funded internationally. More countries are likely to
follow India's lead. Cancer is not the only NCD on the rise in developing
countries, with rates of diabetes, cardiovascular, and chronic respiratory
illnesses likewise increasing. U.S. patients will not indefinitely pay a
20-fold increase on the price of medicines that Indian consumers pay.
The fight over cancer drugs
in India exposes a fundamental tension in the way we fund pharmaceutical
R&D. Patents allow pharmaceutical firms to charge high prices for drugs for
a limited period of time to recoup their investment in R&D. This results in
more of the drugs that we need, but makes them less accessible to those who
need them. The tension becomes greater in the global context because the income
disparities between developed and developing country patients are so vast.
This tension in the patent
system has been exposed before. A decade ago, courtroom battles and protests
over access to patented HIV/AIDS medications in South Africa dominated
international headlines. Those fights subsided when multinational companies
donated their drugs, charged rock-bottom prices for them in poor countries, or
allowed local companies to make generic versions. Yet the emerging fight over
cancer medicines threatens to be bigger, as it involves the emerging markets
and disease groups on which the multinational drug industry has banked its
future.
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