Why Chemotherapy That Costs $70,000 in the U.S. Costs $2,500 in India

This is basically the paradox of US healthcare innovation. Canada can tell its pharmaceutical companies, "yeah, that cool drug you just invented, we're not gonna pay you what you want for that." And what option does the pharmaceutical company have? Convince healthcare providers to charge retail prices to their patients as an out-of-pocket expense, or... reduce prices accordingly.<p>Because healthcare payments are not functionally a government-controlled monopoly (ie. socialized healthcare) in the US, this doesn't happen. So Novartis can sell Gleevec for $75,000 in the US, because a healthcare provider will agree to pay and just bill it to private insurance companies, and those private insurance company will agree to pay and just increase their premiums on the customers, who probably won't notice because, assuming they have employer-provided health insurance, their employer won't take anything more out of their paycheck, but then say increased operational costs means nobody can get a raise.<p>So US healthcare leads the way in innovation because device and pharmaceutical manufacturers can make a lot more money than in countries with socialized healthcare. So these companies make most of their profits in the US, and then they'll grumble and accept lower prices in every other country, because at that point it's just icing to them. After the profits made in the US, getting $2,500 from Indians for Gleevac is better than getting $0.<p>The US is effectively subsidizing advanced healthcare for every other country in the world. This is pretty crappy, obviously, but this is a complex problem to solve. Because if you move to a cost-controlling system, then you will stifle legitimate innovation. Why jump through all our FDA clinical trial hurdles if there's no promise of a big payout at the end? Why invest in R&#38;D without the protections of patent law to prevent your drugs from being trivially replicated?<p>I'm not trying to say, "oh, those poor profits of the drug companies." I recognize this may not be a sympathetic argument. But it's likely to be tough to control costs and yet maintain R&#38;D and innovation. Right now, every other country essentially gets the US to pay the bill for the innovation and they reap the benefits at a lower cost, but with US healthcare already consuming 1/6 of our economy, this isn't sustainable.

&#62; the patentability of modifications to existing drugs under Indian law<p>A key point here is that the original drug itself was patented, and has expired. The issue that the Indian court had with Gleevec patent application is that it only rearranged the molecule in a new crystal pattern, ie Polymorphism. The Indian court consider polymorphism to be a well known technique when working with drugs, and just applying polymorphism to a old drug and record what it did do not fulfill the requirement for patentable.

My father has been on Glivec for the last 7 years, and this is the only reason he is still alive - when he was diagnosed with GIST doctors told him he would have 2 years left at best, but decided to add him to clinical trials of Glivec for GIST patients. The whole treatment is paid for by our national health care, I believe it costs....$3000 per month, that's how much a single box of Glivec costs here and my dad has to take a pill every day so he gets a new box every month.<p>Not really related, but I wanted to mention this, since some people really want to show Novartis as evil, and while they probably charge too much for their drugs in the US, their medicine actually saves lives, my dad being the best example of that.

Please tell me how charging $50,000/yr for 30 year old dimethyl fumarate (BG-12/tecfidera) for the treatment of multiple sclerosis is due to innovation. It shouldn't cost more than aspirin. The <i>only</i> reason they are charging that much is because that's how much all other MS medications cost.<p>Oligopoly, it's like a monopoly, only legal.

&#62; Rejecting the Gleevec patent application is not the only step that the Indian government has taken to circumvent patents on cancer drugs.<p>It's not circumventing the patent. It's not granting the patent. People think that patent is some kind of innate natural right and if you manage to trick one country into giving you monopoly you are somehow in the right now and other countries that don't see the point of giving you similar monopoly are circumventing your sense of entitlement.

'Gleevec is under patent in the U.S., but not in India' This is a biased article, Novartis tried to gain one more patent for existing drug with slight modification.<p>see 'Calling big pharma's bluff' <a href="http://www.thehindu.com/opinion/lead/calling-big-pharmas-bluff/article4573890.ece" rel="nofollow">http://www.thehindu.com/opinion/lead/calling-big-pharmas-blu...</a>

The first comment after the article ends the discussion:<p>"This article is misleading from the beginning. India did not refuse to issue a patent for Gleevec, it refused to extend the patent Gleevec already had, based on merely superficial changes to the formula, a practice known as "evergreening", which pharmaceutical companies use to extend the monopoly on their medications as long as possible."<p>That is completely accurate, and more informative that the article in fewer words.

One point I haven't seen explained is why the Indian companies don't manufacture the drug based on the molecule described in the expired patent.<p>If what the courts are saying is true and the new patent covering crystallization is trivial, the expired patent should be just as effective and free to use? If it's not as effective, that seems to make the case for the new Novartis patent.

Looks to be a sponsored article from Novartis and the likes.

This article does not say why the Gleevec patent was rejected, maybe it was not the purpose of the article. Indian companies did not invest in clinical trials, even in the discovery of the molecule. They are just using the disclosures. Even if there is compulsory licencing there should be a cost, about 20 million dollars would be okay based on the average research cost and population of India. I dont believe in compulsory licencing but believe in price control. Let those patent holder companies have exclusive rights but govt should have the right to determine the price based on the purchasing power of the people. The better option of course is govt or the insurance companies negotiate with patent holder. But in India there is no health insurance run by govt that addresses the real price of drugs. Most of the insurance for poor is like a fixed amount like Rs. 30 thousand which does not even cover 10 days in hospital. The price control is supposed to make the cost of healthcare down, but there is no control of the cost of surgical procedures.

In other words americans partly pay for indians for drugs by having these patent laws.

It's not nearly the difference that it would appear ... Think about the per capita incomes of both countries and you'll find the drug is prohibitively expensive in both countries. If you look at it from the drug companies perspective; it's a case of maximizing their profits in both markets and competition is just one factor in doing so.

Nice post. In USA employers pay the medical bills through insurance companies. In india either government pays the bill or the patient. So, they cannot afford $70,000 bill. So the government takes the decision that is beneficial to itself and patients. In US the pharma companies and insurance companies decide what is the price.

Because prices are determined by what the market will bear? I thought that was the stock answer for any pricing question.

All things being equal, stuff is <i>always</i> going to be more expensive in the US than in India. If you're complaining about $70,000 here v. $2,500 there, I'm going to assume you're charging the same for your services here as someone is in India, right? <i>Right?</i>

So explain to my dying son why his cancer Osteosarcoma has a flat line of 15% survival rate for the past 30 years?<p>WHY IS THERE NOT ONE NEW PEDIATRIC CHEMOTHERAPY IN THE PAST @) YEARS INTRODUCED IN AMERICA?

Couldn't healthcare tourism to India solve some of this problem? It's already happening on a smaller scale in Mexico.

Chemotherapy is a form therapy where the medicine companies heal the the patient off his money and then kill him.

Is US healthcare waiting to be disrupted?

Lawers

i've worked at novartis. they spend 3 times as much on marketing than research. that's what's wrong with the whole deal