How India's Patent Office Destroyed Gilead's Global Game Plan
businessweek.com
businessweek.com
It relies on section 3(d) of the The Patents Act, 1970 (as amended up to Patents (Amendment) Act, 2005) [1]:
> What are not inventions. —The following are not inventions within the meaning of this Act,— (d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.
Explanation. — For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;
This is the same section that was opposed to Novartis in 2013 [2]
1: http://www.wipo.int/wipolex/en/text.jsp?file_id=295102
2: http://articles.economictimes.indiatimes.com/2013-04-01/news...
But the Patent Office says that "efficacy" here means therapeutic efficacy, and it would need to be proven by a clinical trial.
So they have no data to show with, unless they went above and beyond to get it. (Which should teach them a lesson about testing their drugs.)
http://www.bloomberg.com/news/2014-03-06/flies-found-by-fda-...
It's a link I posted in this[1] HN discussion. Any amount of Google-fu can turn up a plethora of similar articles. I hope you're feeling lucky, because IMO the potency and efficacy of Indian generics is very hit or miss.
I don't mean to single India out. The "race to the bottom" is one of the overarching global themes of the previous few decades of late stage capitalism.
Basically the largest Indian Pharma company is corrupt to the core. Falsifying records, blatantly disregarding scientific method, omitting even basic engineering practises, lying on regulatory submissions, etc.
The FDA only does bans on a per-facility basis, so Sun (which acquired Ranbaxy) can continue to sell many things so long the FDA has not shut down that specific location. Even in non-Indian locations, the plants were terribly run. One Ranbaxy location in NJ shipped pills with glass in them. (And was penalized by a temporary restriction on selling the pills.)
Maybe not if you're in the 'upper middle class'. If you're from the lower income classes (maids, drivers, helpers), it's very likely that health issues can bankrupt you.
I personally know an entire family that has sunk into debt that they couldn't possibly pay-off, due to health related expenses for someone in the family.
"India believes that the patent standards are so low that companies can get patents for inventions very easily," Amin said in an interview. The patent office's examiner ruled Gilead's patent claim "lacks novelty and inventive step," as Bloomberg News noted, and also doesn't demonstrate it's significantly more effective than already known compounds. Amin explains that the controller general's decision holds that "there are a number of earlier compound structures that are very close to what Gilead is trying to get a patent for."
But Sovaldi is a breakthrough drug. Shouldn't that be worth something? "It's important to recognize that what the patent office deals with is whether something is new in science," Amin said. "The decision says there are a number of earlier compound structures that are very close to what Gilead is trying to get a patent for. It's a scientific decision and has nothing to do with the utility of the drug." Gilead didn't offer comment on Wednesday.
So it's not like the drug maker was necessarily whacked by some rogue judge issuing a weird decision out of the blue. It may very well be that Gilead was taking a known risk at the hands of the Indian patent system.
Does Sovaldi satisfy India's standards for novelty? I don't know. I've had a patent application struck down over novelty, so I know it's not a happy day when it happens.
But it is not the activity (which describes, essentially, most research) being patented, it is the result of that activity. If the search space is very large, that is actually an indication of the non-obviousness of a solution that works in practice. Drug discovery certainly meets that criteria.
This could be a case of a bad decision in India, of course, but it also could be one where the patent examiners in US and Europe were more lenient than they should of been.
(Disclaimer: I helped work on equipment designed to assist in this kind of chemical searching).
Sofosbuvir costs US$84,000 for 12 weeks of treatment used for genotypes 1 and 2 (about US$1,000 per pill) [...] health care costs in California could increase by US$18–29 billion per year because of this medication
However the per year is bullshit. That's the cost to treat every person is California who has it. But it's expensive and popular because the cure rate is very high. That makes it more of a one time cost, not a per year cost.
Calculate the savings that curing those people produces over time (1, 5, 10, 20 years).
I'd be willing to bet the math works out in favor of spending $84,000 one time.
I'd love for the state to announce ahead of time how much they would pay for, say, a cure for diabetes. Have them calculate what the NPV is for a lifetime of diabetes treatment. Publish that figure.
Then some drug company can show up with a cure, charge 90% of that figure, and we can see people whine that the drug company is costing the state money.
So a drug company releases a cure for a disease and everyone complains about the price. Ironic.
But I doubt that would make that case that because of that huge effect, those random bumps and extended flap deserve patents. We are after all talking about basic shapes here, nobody should be able to patent "a round shape with a tiny bump sticking out" so that others cannot use that shape.
But then my doubt is the same: If the old ones are the same as this one, then why sue to be able to use the new one free? Just produce the old one... it's the same.
1. Getting justified fruits for people's labor (researchers). Say- getting a great ROI like 1000% or huge ROI of 100000%
2. Getting greedy and trying to multiply the the ROI at the cost of human lives.
I have seen pretty stupid patents (that are logically obvious or near common sense) granted to American companies in tech sector (and have been astonished since I helped create some of those). I believe pharma is no different.
The drug "Sovaldi" is making them $2.8ish billion dollars per quarter, that is almost $12 billion a year. I don't believe they spent tens of billions in developing the drug. [2]
1: http://www.amazon.com/Bad-Pharma-Companies-Mislead-Patients-...
2: http://www.bloomberg.com/news/2014-10-28/gilead-reports-lowe...
That said, it's quite likely true that marketing is a bigger share of costs than R&D. Pharma companies are out there to maximize revenue, just like any other corporation. It's a reflection of the poor state of regulation in the US that we pay far more of than our share (compared to the rest of the world).
There are 3.2 million hep C patients in the US [2] but most don't feel ill or even know they have hep C. If every single person buys the drug, Gilead must still sell it for at least $11b / 3.2m = $3500/person! But if only 5% buy the drug, they need to sell it for $69,000 just to break event on the acquisition without even taking any other costs into account.
This is just rough calculation to highlight that a sky high acquisition price resulted in a company demanding an equally high price per dose. Gilead paid the high price to acquire Pharmasset because they thought they could sell the drug for at such a high price per dose. If Gilead is proven right (and their stock price from $18 in 2011 to $100 in 2015 seems to reflect that indeed), then this just encourages more and more drug companies to be bought at astronomical prices.
And the worst part of this is that the very government that gave this company the right to operate a monopoly via a patent is now asking them why they're charging so much [3]. None of this happened because of some singular evil cabal. It happened due to misaligned incentives.
Government grants pay researchers, who develop medicines at paid-for-by-public-funds university labs, which sell the patents back to the researchers at fire-sale prices, who then go on to create biotech startups, which productize the research, and then sell to Fortune 100 pharmas, who can then demand almost any amount of money, which CMS will have to pay because USPTO said nobody else can sell this drug, FDA agreed that the drug works, and ACA ensures that the patients cannot be denied any drugs that work at any cost.
[1] http://en.wikipedia.org/wiki/Pharmasset [2] http://www.hhs.gov/opa/reproductive-health/stis/hepatitis-c/ [3] http://www.finance.senate.gov/imo/media/doc/Wyden-Grassley%2...
Companies should definitely make profit, but their default modus operandi is "milk the cow as long as possible", which would directly result in many deaths... not much sympathy from the crowd there. Let's not forget simple math here - company is/was charging for medicine that doesn't cost more than few tens of bucks to produce... 69,000? Sorry, ridiculous all the way through. Don't care about research bla-bla
Just turn on that weird device that used to be called TV. During winter, 1/3 of the adds are medicines. Who pays for those adds? All those who buy medicines...
Of course you wouldn't, since that's what costs billions to discover the medication that eventually costs "tens of bucks" to produce, which completely undermines your argument.
Elimination of punitive damages or more importantly making punitive damages excluded from lawyer commissions would be a step in the right direction. Additionally, punitive damages ought not go to the complainant, but to the taxpayer and thus funneled into grants, etc for basic science research to potentially lower the costs of future development. The only person that benefits from a punitive award is the lawyer and the 'victim.' Lawsuits should not be a lottery ticket.
In particular, while I can see grassroots protestors not thinking about the long term, I vaguely assume that Médecins Sans Frontières knows what they're doing, and wouldn't have been backing this strongly if they didn't think it was also a long-term good strategy. But I definitely would have appreciated more discussion of that point, since I don't put much stock in my own vague assumptions.
There should be an international drug research agency, to which every country should contribute, and that agency should be responsible for exploring cures for diseases, by funding academics, labs, etc.
All these words don't carry meaning without proper data. Unless we know how much they've spent, how much they need to recoup & grow, these claims are vague.
> stealing the fruits of other people's labor
Without studying the merits/demerits of the patent, this is a hyperbole. I'm saying, maybe your statements are true, maybe not. But without backing up with facts, they are merely sentimental.
Here's an interesting case of drug pricing. Albendazole is a fairly common/old drug. It's a broad spectrum anthelmintic that retails for a few cents in most parts of the world. Recenty, U.S. price of albendazole has increased by >4000% to over US$100 per 200-mg tablet[1].
Another example: Novartis, the company that makes the leukemia drug Gleevec, keeps raising the drug’s price, even though the drug has already delivered billions in profit to the company. [...] Novartis is just keeping up with other companies as they charge more and more for their drugs. They know we can’t say no.[2]
[1] http://en.wikipedia.org/wiki/Albendazole#Controversy
[2] http://www.nytimes.com/2015/01/15/opinion/why-drugs-cost-so-...
And as far as drug developments go, due to GPU computing and molecular dynamics and monte carlo simulation methods, the cost of developing drugs has gone significantly down [4][5]. For starters they take a molecular structure, add or replace a functional group, and run the simulation with a particular protein structure. Drug development costs are not that high now, compared to twenty years ago. Most of the money goes in marketing.
If Government of India thinks more about it's 2.1 million than bunch of corporate companies trying to siphon money from wherever they can, then YES, they are in the right direction.
1. http://www.bmj.com/content/340/bmj.c621 2. http://www.indexmundi.com/g/g.aspx?c=in&v=37 3. http://povertydata.worldbank.org/poverty/country/IND 4. http://www.ncbi.nlm.nih.gov/pubmed/16758486 5. http://www.biomedcentral.com/1741-7007/9/71
I don't see where they show that the cost of clinical trials etc. for getting drugs through the FDA is affected. From what I can tell, those are the largest costs involved. Especially considering that most of the drugs discovered, even using those advanced methods, fail in the trial phase after hundreds of millions invested.
> If Government of India thinks more about it's 2.1 million than bunch of corporate companies trying to siphon money from wherever they can, then YES, they are in the right direction.
"Siphon money" or "capture the rewards of the value they provide"? Undermining global incentives to invest billions in research that could save hundreds of millions around the world does not seem like the "right direction". Not the first time the Indian government has done something selfish but shortsighted. (Pokhran comes to mind.)
Agreed, but I compared the costs of developing drugs 20 years ago. They had to synthesize and experiment with each and every drug. Not that's not the case. And most of the drugs which being developed now, use the principals I explained above. If clinical tests are proven successful then they file patents, but it's not an "innovative" process as per say. India has been working to get rid of such patent trolls for some time now.
> "Siphon money" or "capture the rewards of the value they provide"? Undermining global incentives to invest billions in research that could save hundreds of millions around the world does not seem like the "right direction". Not the first time the Indian government has done something selfish but shortsighted. (Pokhran comes to mind.)
Agreed, these kinds of researches has to be done, but not at cost of people's lives, I have explained statistics of people affected by AIDS above. It is a grave social injustice. These research and development processes are flawed in the sense that they cannot provide affordable alternatives to existing methods. These companies must adapt to affordable and agile development processes or someone else will replace them, remember "Mars Orbiter Mission" by ISRO.
And speaking of Pokhran, it was not a short sighted decision. India has Pakistan, an irresponsible nuclear capable neighbor, with whom India has been in state of war since 1947. Effects of Pokhran economic sanctions were not severe, because foreign trade of India constituted to 4% of it's GDP, while USA participation was only 10%. After Pokhran, under then PM Atal Bihari Vajpayee, India achieved record breaking 6-7 % growth rate in GDP. A few problems could be pointed out, but it was not a short sighted decision at all.
I am not being a socialist, but I must add that such innovation and development should be done for the people, not American people, not British people, but keeping people of the world in mind. Please don't monopolize products which can save a lot of peoples lives.
> And speaking of Pokhran, it was not a short sighted decision.
Pokhran very certainly was a short-sighted decision. It benefited absolutely nobody except the government by buying it some temporary popularity while actively retarding the country's economics for years afterwards.
> India has Pakistan, an irresponsible nuclear capable neighbor, with whom India has been in state of war since 1947.
Pointing to Pakistan is not an excuse: the whole world knew India had nuclear weapons capability. It had nothing to gain by proving the world what it already knew. Consider Israel: it's geopolitical situation is even worse, being a tiny country surrounded on all sides by many, much larger nations that would see it destroyed. Israel also is known to have nuclear weapons capability. Did they have to go perform a demonstration so the world?
And despite Pokhran, Pakistan has not wavered. Pokhran did nothing to slow Pakistan's regular shelling across the borders. Pokhran did not prevent 26/11. Pokhran did not reduce the number of subsequent terrorist attacks and infiltration attempts. It has done nothing at all to improve the Pakistan situation, and very likely made it worse.
> Effects of Pokhran economic sanctions were not severe, because foreign trade of India constituted to 4% of it's GDP, while USA participation was only 10%. After Pokhran, under then PM Atal Bihari Vajpayee, India achieved record breaking 6-7 % growth rate in GDP.
I don't think anyone knows the true extent of the economic effects, but they are much worse than you suspect. It was not just the US that imposed sanctions. Many countries and companies imposed official and unofficial sanctions that directly impacted business relations and international collaborations. It was not only foreign trade. Companies that were going to set up local manufacturing plants and partner with Indian companies pulled out. That was a direct loss to the local economy. I personally know of business deals with private companies in Germany and Japan that abruptly fell through because of this. Nobody has measured the real impact. The 6 - 7% GDP growth may well have been much higher, but we will never know.
Funny you should mention ISRO because they were also directly impacted: https://news.ycombinator.com/item?id=6552947 It's a credit to ISRO that they delivered despite the governments actions. ISRO could have dedicated resources towards newer and more interesting projects rather than re-inventing technology that became unavailable purely due to political posturing. The opportunity cost is unmeasurable.
The only thing Pokhran bought was national pride that was short-lived and had ultimately no practical value, economic or otherwise. I have seen nothing positive come out of it, only a large amount of negative impact. I cannot see how it was anything but a terrible decision.
That is entirely false.
1. Why would you include marketing in the cost of developing a drug? They don't market it until it's launched.
2. The cost of drug development is not lower than it was 20 years ago, even by a long shot. FDA approval requirements have gotten more and more complex each year. 20 years ago you could run a trial on a few thousands patients and call it a day. Now the FDA would require a 10,000 person trial over two years for approval. That costs money.
Surely each of them has a patent office, doesn't it?
Developing a biopharmaceutical product requires the following:
1. A professional who discovers the possibility of a new chemical entity, requires infrastructure: comprised of medical grade equipment (centrifuges, beakers, pipets, filters, microscopes, testing equipment, etc.), experts capable of understanding applications of drug, and many iterations of tests. There will be about 5,000 to 10,000 opportunities for these to address something like Hepatitis C.
2. The NCE is developed for dosage and scheduling. Again more testing.
3. The drug needs to be optimized for manufacturing: infrastructure requires additional experts and assessments
4. Preclinical testing is completed. Only 250 products out of that initial 5,000-10,000 NCE group make it here.
5. Only now is a submission made to the FDA.
6. Go through the process of FDA approval starting with human trials. Only around 10 of these from the 250 will be instigated.
7. FDA human trials, a three to four step process that only 21.5% entering the process will make it through.
8. Production of drug.
9. Sale of drug for seven years to recoup costs
10. Post-Surveillance of drug
11. In people with an asymetric heart ventricle that exhibits heart murmurs but only on Wednesdays, the approved drug causes uncontrollable urination. The drug company has to deal with trial lawyers who develop a lawsuit in the general area of $300 million. And this lawsuit can be brought against the company throughout the lifecycle of the drug and in some cases, the original patent holder can be held liable for the generically produced NCE's.
12. Drug finally goes to generic and the generic manufacturers in Brazil and India sell it for pennies, wiping out all profit margins for your product.
13. A third world nation tries and successfully invalidates a patent that you hold, wiping millions off of the revenue forecasts, thus eliminating the monies needed to test up and coming NCE's. Then someone on a forum
The amazing part in all of this is that a drug gets made at all. The argument that it costs pennies to make, apply the same logic to a cars production. The modern car costs about $1,000 to manufacture, this includes materials and labor costs, the other monies include research, development, marketing, and all the other accouterments that make it possible; why are people not screaming for the costs to be lower, because they understand that there are costs and regulatory capture involved.
[1] http://www.forbes.com/sites/matthewherper/2013/08/11/the-cos... [2] http://en.wikipedia.org/wiki/Drug_development
I tried to find additional information to back up this claim through the web, sadly, sources will either be: 1. Sales representatives within car sales pointing to an invoice sheet from the manufacturer showing a percent difference or dollar difference, but this would include the tooling, r&d, and operation costs. http://www.reddit.com/r/cars/comments/2bvxn5/how_much_does_i...) 2. Manufacturers who make statements about profitability. http://singletrackworld.com/forum/topic/how-much-does-a-new-... 3.
You can find further information about how the $40,000 Volt obfuscates its costs: http://www.treehugger.com/cars/how-much-does-chevy-volt-cost...
Ok, so that's unnecessarily strong sarcasm, but it has more than a few ounces of truth to it. Even Canada has significantly cheaper drugs because US citizens get the privilege of paying more.