[Commons-Law] A loose drug policy? Why not?

[Shishir K Jha]

Some quick thoughts on the mail sent by Hasit Seth on India's erstwhile
loose drug policy and its inability to appreciate the need to have a
proper
"property regime"

Shishir K. Jha

-----------------------------------------
1. A loose drug policy:

Why not?

The question is related to national development options. If process
patents have been used the world over and particularly by developed
countries to consolidate their pharma and chemical industries why couldn’t
India do the same. It is very clear that TRIPS was introduced into GATT by
the forceful lobbying of a very powerful alliance of US pharma and
entertainment companies that later got the European and Japanese to
support them. This was a strategy of global consolidation and domination
in IP related industries.

We also know that most western countries except US have rather recently
adopted the product patents - see table below. We know that US has had IP
protection for a long period but merely in theory - See the work of DORON
BEN-ATAR among others.

It is also instructive to compare the pharma company growth of India and
Pakistan over the last 50 years – with the latter sticking to product
patents.

2. The claims to huge expenditure by US companies – of the order of $800
million – for creating a new drug has lot of problems. Half of this cost
is actually opportunity cost – that is money that these companies could
have earned had they invested the dollars in some other investments with
higher interest rates. That is $400 mn. is not actually spent on R&D for
the new molecules but is something that is not realized by these
companies. The entire $800 mn. claim rests on a single study done at Tufts
University – whose authors will not disclose the full data. The figure has
been considerably criticized by Merrill Goozner [see his The $800 Million
Pill: The Truth behind the Cost of New Drug & Marcia Angells - The Truth
About the Drug Companies: How They Deceive Us and What to Do About It].

3. Over 50% of the new drugs made by the large US companies: a) either
have their basic research completely done by the US NIH or b) produce
drugs that are called “copycat” or “me too” drugs - with little or
marginal improvement in therapeutic value. The point being that there is
hardly any real value addition being done by the big pharma companies.
Lots of stuff has been written on this too.

4. Finally how is merely 35 years of process patents enough to make a
country completely confident of developing new products? The western
countries took much longer by any count. I don’t exactly know when this
process patent period should have ended but neither can any economist tell
us about a precise period when process period should be removed. More to
the point why should the ending of process patents period be dictated by
the lobbying power of the big pharma companies.


There are more issues one can add here but these are some things to ponder
over while deciding what kind of “property regime” a country like India
should go in for and most importantly the timing of making large shifts in
adopting new property regimes. The big issue is who and what should
determine when a country should shift its property regime.

Shishir K. Jha

------------------------------
Message: 3
Date: Tue, 12 Apr 2005 15:52:22 -0400
From: Hasit seth <hbs.law at gmail.com>
Subject: [Commons-Law] Re: commons-law Digest, Vol 21, Issue 20
To: commons-law at sarai.net
Message-ID: <8b60429e050412125245f863fc at mail.gmail.com>
Content-Type: text/plain; charset="ISO-8859-1"

Hi Everyone,

    I read the below news item of Ranbaxy discontnuing sales of its
Valdecoxib  formulations becasue the original drug maker stopped the
sales of its drug sold under the brand "Bextra".  This is just one
episode in recent pain medication withdrawls of Celebrex, Vioxx etc in
US.

     I could not help wonder what are the long-term implications of
loose drug policy as it was till a month back of allowing copying of
patented formulations developed in the west.  Indian companies selling
drugs like Valdecoxibs just copied the drugs formulations, created a
process to manufacture it (this was real hard work, no doubt) and then
did nothing.  Let the western companies do the whole process of
research, trials and validation of drug with their FDA, and the we
will just copy it.  Not many post launch study of drugs are undertaken
in India, with again reliance being on US FDA to detect such dangers.

     This policy of course provides cheaper drugs.  But what is the
long-term effect of a policy? We can just lift all the IP and safety
procedures done in US by a US company for free, and give practically
nothing in return to the domain of medical knowledge.  The
justification for this is moral and ethical.  How can the evil western
companies and governments deny medicines being offered to poor people
in India for cheap?  This means we will copy work of others and
contribute just about nothing in return.  This is just unfair from a
knowledge domain and contributing nothing in return, if we keep the
moral and even economic aspects apart for a moment.

     We are complaining about bio-piracy from east to west, south to
north, but this one-way free transfer of medical knowledge is entirely
justifiable only on the basis that we are poor and our moral rights
allow us to do this.  Take this for example, the Patent Act of 1970 by
denying drug patents, should have ideally encouraged pharmaceutical
research in India, with freedom to take patented products and develop
even further treatments.  And what happens from 1970 to 2005?  It
would have been an ideal situation if Indian drug industry contributed
significant medicine knowledge back to the domain (for free, ideally)
during this 35 year time of this free-for-all pharmaceutical knowledge
era.  But what is the reality? Indian drug comapnies, government
laboratories and all other players have generated insignficant
progress in new drug research.  Yes, it led to creation of  a massive
and fragmented drug manufacturing base in India.  It was a great
policy success in making medicines available for a lot of people.  But
what did the medical knowledge domain gain in return? A lot of dosage
variations, separation of active ingredients from few plants (taxol,
bacosides and neem) and little more.

With no reserach investment required, there was no need to spend any
money on R&D (why do it, when we can copy for free?)  and now the
changeover to a drug product patent is a bitter pill to swallow for
business and government.  Now, that the drug companies will be forced
to do some research, research costs will be part of newer medicines to
some extent.  Drug pricing control policies co-exist in many countries
(I know of Canada for one) that also offer strong drug patent
protection.  A price-control policy resulted in the domain of medical
knowledge being deined a fair return contribution of knowledge from so
vast a society for a period of 35 years, is this justifiable just by
using morality and poverty as a defence?

    The holy grail of all anti-IP arguments seem to stem from an
discomfort with the concept of property.  Due to the history of
property linked with that of feudalism, captialism and imperialism,
societies in the third world view any systems with property at core as
being another garb of unleashing such terrible forces.  But problem is
when innovation is curtailed due to historic property issues,
innovation suffers in the long run.  Innovation and scientific
research is "creation" of property unlike the distributive and
management functions of most real property concepts.  The focus should
be on a set of IP laws that encourage the creation of innovation and
research without the fears of excesses associated with traditional
property systems, while ensuring that innovation process does not
itself suffer.  Squeezing  the innovation pipeline by denying
investments through a free-for-all property regimes is not the answer
to make sure that innovation grows.

Regards,
Hasit Seth
-----------------------