Making Medicine Affordable

AFP reports that the Indian drug manufacturer Cipla will drastically reduce the price of three important cancer drugs — each of them under patent to one of the big western pharmaceutical firms.  With Cipla’s new pricing scheme, the drugs will be purchasable for about 25% of the price charged by the patent holders, Bayer, AstraZeneca, and Schering.

As the Wall Street Journal reports, the break point came when the Indian patent office required Bayer to grant a license to an Indian manufacturing firm (not Cipla, actually) for its liver/kidney cancer medication Nexavar.

The head of the European Federation of Pharmaceutical Industries and Associations said that the companies would prefer to make drugs affordable through so-called tiered pricing schemes, wherein the price of a drug varies from country to country in regard to local cost of living.

In a 2009 article in Global Health magazine, Andrew Jack notes that some big pharmaceutical companies have lowered their prices to try to compete in the huge Indian market, including selling the diabetes drug Januvia (Merck) for one-fifth its US price.  GSK, Jack notes, even has different prices in different parts of India.

Tiered pricing or patent busting — a big problem remains unresolved:  even when prices are lowered to $100 per dose, many people can’t afford them.  Last year, an article in The Economist showed results of surveys by Abhijit Banerjee and Esther Duflo:  over 90% of respondents in rural India (and about 80% of Pakistanis, 70% of Bengladeshis, etc.) live on $2 a day or less.  For such households, the cost of a single dose of cancer medication — even at the Cipla price — is equivalent to weeks worth of food.

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