Obama will meet with Indian prime minister Manmohan Singh this week at the White House to demand a change to its intellectual property laws. In addition to a long record of yielding to the demands of the pharmaceutical industry, Obama has also yielded to copyright and trademark hawks who has secured ever increasing criminal and civil penalties in the field. Here, the industry wants to cut off the supply of affordable medicine coming out of India due to its large generic drug industry. The industry is alarmed by the fact that India’s market is forcing the cost of drugs down for HIV, TB, and cancer by more than 90 percent.
Critics charge that Obama is basically reading from a script written by Pfizer and the industry in threatening retaliation if India does not change its intellectual property laws to limit the availability of generic drugs. There is no question that India’s legal system needs reform and intellectual property rules could be tightened. However, Doctors Without Borders insists that this is a raw effort to shutdown a country offering millions of people affordable medicine. If successful, the impact on the sick could be breathtaking if not life taking. Most AIDS drugs are generic and India supplies a huge amount of the HIV medicines.
The problem is that Indian courts have already supported the claims of Indian companies to produce such generics. For example, Novartis tried for seven years to block a low-cost generic salt form of the cancer drug imatinib, marketed as Gleevec. The Indian Supreme Court ruled that the company had every right to produce the drug and that the company, and by extension the U.S., was trying to impose effective monopoly pricing on consumers.
Likewise, a case involving Bayer shows how such inflated pricing works. Bayer lost an effort to block an Indian drug that slashed the cost of a kidney cancer drug by 97 percent. That’s right, 97 percent. Bayer wants to sell it as a cost of $4,500 per month.
Obama has increased the government paying for such drugs for the poorest Americans, but that healthcare deal still allowed drug companies to pull in windfall profits at public expense. Moreover, for middle income families, such costs (or the resulting higher insurance costs) have sapped away income at a time of diminishing wealth. The companies have a valid argument that some protection is needed to allow them to recoup billions in research to develop such amazing drugs. Intellectual property law encourage innovation by guaranteeing such profits that in turn encourage the investment in new research. However, with one of the most powerful lobbies in Washington (populated by former members and staff members who helped draft earlier laws), the drug industry has imposed obscene (and at times ruinous) costs on families who struggle to pay for life-sustaining medicine.
Doctors Without Borders is leading a campaign opposing Obama’s efforts to cut off the largest market for affordable drugs — a move that would leave families captive to the pricing set by these companies.