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

[Shishir K Jha]

Dear Hasit,

It appears to me that is I who is providing very specific arguments about
the drug industry supported obviously with conceptual views rather than
merely invoking general anti-west tirades.

I am sorry but as far as specifics are concerned [or even generalities are
concerned - but that comes later] I am not really satisfied with your
response.

You have not really answered a host of questions that people living in
developing countries must contend with. After all the political realities
in global institutions are not a fanciful imagination of those who love
perhaps to engage in some fashionable anti-west bashing. If you feel any
criticism of global political economy coming from developing countries is
really so shallow then I would contend that you end up merely re-inforcing
the "liberal" western bias. A bias which goes something like this - let us
with our "best" and most "benevolent" intentions create a set of new
global regimes in place and the world should benefit in following such
proposals and if they disagree aren't they really spoil sports or even
better pirates who thieve off our property rights.

As I raised earlier, the specific question of why should India have to
contend with only 35 years of process patents while the rest of the
developed world had over a 100 years of "loose" policy needs to be very
specifically answered.

You also state rather generally: "... innovation, invention and investment
in innovations are systematically ignored [in developing countries]."
Please provide specifics in terms of actual resources available and the
unwillingness of these countries to use them. Your view is contrary to
much evidence one sees in many different areas of technological growth.

An important point: I have no where "as yet" in my arguments opposed
product patents, which you seemed to have assumed. The crucial question is
who gets to decide [i.e., who is included in such a decision and who is
excluded both at the national and the international levels].

regards
Shishir K. Jha

> ----------------------------------------------------------------------
>
> Date: Mon, 18 Apr 2005 11:04:22 -0400
> From: Hasit seth <hbs.law at gmail.com>
>
> Dear Shishir,
>
>      The western world's hypocrisies are all too well known.  The farm
> export subsidies, the multi-fibre quotas agreement, etc., are all
> symptomatic of the western world protecting their advantages.
> Considering these policies, it even more important than ever to
> develop a domestic research base and an industry and market that uses
> products of such a research base.  It is not a fascination that new
> drugs should be developed in India, but a real need for building a
> vast medical research base when future problems can pop-out anytime
> unpredictably (HIV being a recent example).
>
>     Technology related debates in India and third world tend to be
> anti-west and then end at that.  Under the cover of anti-west,
> david-vs-goliath, alarmist-doomsday prophecies, historical economic
> deprivation, social problems, etc., and other such arguments and
> policies based on such arguments, innovation, invention and investment
> in innovations are systematically ignored.  Ironically, a lot of these
> problems can be solved through technology.  Opposition to product
> patents in drugs is powered by such arguments, which will ultimately
> lead to stilted development of a modern medical research and
> industrial base.
>
> Regards,
> Hasit
>
>
>>    1. A loose drug policy? Why not?  (Shishir K Jha)
>>
>> ----------------------------------------------------------------------
>>
>> Message: 1
>> Date: Sun, 17 Apr 2005 20:10:31 +0530 (IST)
>> From: "Shishir K Jha" <skjha at iitb.ac.in>
>> Subject: [Commons-Law] A loose drug policy? Why not?
>> To: commons-law at sarai.net
>> Message-ID: <1449.10.127.133.110.1113748831.squirrel at gpo.iitb.ac.in>
>> Content-Type: text/plain; charset="iso-8859-1"
>>
>> Dear Hasit,
>>
>> For me there is no moral issue really? It is really a political-ecomonic
>> problem. Developed countries setting the pace of changing and
>> consolidating property regimes and most of the developing world having
>> to
>> follow because of our own internal weaknesses.
>>
>> Crucial points for us to consider here:
>>
>> 1. Why are we so deeply "impatient" with the fact that we have not
>> really
>> been able to produce a cluster of new drugs in India? This is not a
>> moral
>> question for me. If you look at the economics of new drug production it
>> involves quite steep costs. Even if we take $100 million for a new
>> molecule in the Indian context [and not $800 mn.], how many Indian
>> companies can afford that kind of expenses. The huge costs are critical.
>> We may have our NIH's but not that kind of money [$27 bn. spent by NIH
>> in
>> US in 2003]. Quite a few Indian companies were beginning to climb up the
>> value-added ladder and perhaps in a decade or two may have managed some
>> major breakthroughs. However this is not as feasible now with product
>> patents hitting us and leaving little room for manoevure. Isn't it a
>> considerable feat that in merely 35 years the Indian pharma industry was
>> able to indigenously cater to about 70% of its drug needs, completely
>> reverse the balance of trade on drugs [from -ve to +ve], and
>> dramatically
>> improve access. [By the way DPCO did have control over high monopoly
>> prices but it was also reverse engineering that allowed these drugs to
>> be
>> cheaply manufactured in the first place].
>>
>> 2. It all boils down to the fact that India has had merely 35 years of
>> process patents [1970-2005] against the developed world enjoying by hook
>> or by crook over a 100 hundred years of a non-product patent regime - a
>> time during which they copied processes from each other with great
>> abandon
>> without the WTO or any global IP police looking over their shoulders.
>> Isn't it surprising that Switzerland, home to many big pharma companies
>> got its product patents only in 1977?
>>
>>  Country                   Year Of Granting Product Patent
>>  West Germany              1968
>>  Japan                     1976
>>  Switzerland               1977
>>  Canada, Denmark           1983
>>
>> 3. Given the above why can't we vividly see the global IP game being
>> played for the gain of some and losses to many? IPR was clearly brought
>> into the GATT/WTO agenda principally because of the intense lobbying of
>> the large IP oriented industries from the US, Europe and Japan so as to
>> consolidate their global positions by preventing process patents and
>> piracy which they themselves engaged in without any guilt. Without
>> having
>> to adhere to TRIPS the developing world would have had its national IP
>> laws developing at its own pace without having to rapidly and upwardly
>> "harmonise" with western standards. Timing of the transition to product
>> patent is absolutely crucial here.
>>
>> 4. Yes, we do have a terrible public health system and people have been
>> complaining about it for a long time - but at the end of the day and in
>> the global political-economic scheme of things that is really India's
>> problem. Other countries cannot dictate new IP terms for us to accept
>> just
>> because we are unable to improve our weak public health system.
>>
>> 5. The high drug costs in the US are definitely a result of the
>> excessively high marketing costs, which the books I mentioned in my last
>> mail do expose. However the point is that no drug company CEO will ever
>> swear to such a basic fact. They maintain a position of grandstanding
>> that
>> it is their very high R&D costs that will be deeply effected in case
>> there
>> is ever any drug price controls put in place in the US. It is their
>> strategic weapon to beat congressmen and senators who are already
>> apprehensive about US losing its technological pre-eminence. The $800
>> mn.
>> figure also comes in handy to tell the world the enormous losses they
>> make
>> because of reverse engineering in developing countries like India and
>> Brazil.
>>
>> In essence my argument is that the developing world must be allowed to
>> develop at its own internally driven pace. The double standards are
>> staggering when the developed world rejects recipes of development that
>> they have themselves used and perfected before. The contours of how and
>> why developing countries give in to such bodies like WTO, IMF and World
>> Bank are clearly political-economic and not really moral. We have to
>> right
>> to completely expose this deep inconsistency which could just as well be
>> quite embarrassing for the ruling elites of the South as that of the
>> North.
>>
>> Shishir K. Jha
>>
>> > ----------------------------------------------------------------------
>> > Date: Fri, 15 Apr 2005 10:45:33 -0400
>> > From: Hasit seth <hbs.law at gmail.com>
>> > Subject: [Commons-Law] A loose drug policy? Why not? (Shishir K Jha)
>> >
>> > Hi Shishir,
>> >
>> >     I agree with all your major points that US drug industry uses tax
>> > payer funded NIH research, a lot new drugs are "lifestyle" drugs, drug
>> > product patents were accepted by major countries only recently.
>> >
>> >     My question was different, how does 1/5th of humanity that is
>> > India morally justify taking work of others and contributing almost
>> > nothing in return to the domain of modern medical knowledge
>> > (particularly pharmaceutical knowledge)?  Most of the counter
>> > arguments to drug product patents gloss over the fact that we run a
>> > terrible public-private health system under a health policy that is
>> > haphazard at best.   The patent act - right or wrongly - created the
>> > circumstances that negligible investment in drug and health research
>> > were made by either private or public sector.  We have an almost
>> > identical chain of specialist research institutes like the US NIH, but
>> > have you heard of any major drug discovery having been based on
>> > research of public funded Indian health institute?  We are racing
>> > ahead to become human outsourcers for clinical trials, but no major
>> > efforts or investments - public or private - are coming forth for
>> > basic medical, chemical, pharmaceutical and safety reseach.
>> >
>> > How is it that only now that product patents are on scene that private
>> > pharamaceutical industry in India has started investing in original
>> > drug and molecule research? and why not before? Isn't the domain of
>> > medical knowledge enriched by even a small contribution from such
>> > investment?  The availability of cheaper drugs was largely the result
>> > of DPCO (Drug Price Control Order) and not solely due to absence of
>> > product patents on drugs.
>> >
>> > I haven't read more about it, but I feel that high cost of drugs in US
>> > is due to marketing costs and not actual drug research or product
>> > patents related costs.  That was never a question in India till date
>> > since marketing/advertising of non-OTC drugs to general public was
>> > never allowed.
>> >
>> > Regards,
>> > Hasit Seth
>> >
>> > ----------------------------------------------------------------------
>> >
>> > Message: 1
>> > Date: Thu, 14 Apr 2005 18:44:23 +0530 (IST)
>> > From: "Shishir K Jha" <skjha at iitb.ac.in>
>> > Subject: [Commons-Law] A loose drug policy? Why not?
>> > To: commons-law at sarai.net
>> > Message-ID: <1499.10.127.133.110.1113484463.squirrel at gpo.iitb.ac.in>
>> > Content-Type: text/plain; charset="iso-8859-1"
>> >
>> > 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
>> >
>> > ------------------------------