In 2005, the United States Food and Drug Administration (FDA) approved the Bayer Pharmaceutical drug Nexavar. Nexavar is used for the treatment of kidney, liver, and thyroid cancer. Based on the FDA’s report, its primary use in the United States was for patients with hepatocellular carcinoma (HCC). According to the AGA Institute, “HCC accounts for 80-90% of all liver cancers and can be difficult to surgically remove completely, thereby often making the disease fatal with 3-6 months.” This was a huge breakthrough drug that could save lives around the world. Bayer, a German and multinational company, marked the price of the drug at $69,000 for a year of treatment.
In India, if a western company charges a price that is deemed unaffordable, there is a law that allows its companies to create a generic version after the original drug has been on the market for three years. Consequently, an Indian court granted a patent to a company called Natco Phama Limited and a new generic version of Nexavar was created with a price tag of only $177. According to Thinkprogress, if a patient in India paid the price of $69,000, that would be 41 times the country’s annual per capita income (based on 2012 data).
Bayer Pharmaceutical has every right to make a profit, they spend a significant amount of money and resources on research and development. In addition, it takes years to bring a drug to market. This is why patent laws are put into place. The laws safeguard the product and allow the holder to recoup its investment during a designated time period. In the United States, for example, the patent protection is for 17 years. Consequently, Bayer sued Natco Pharma Limited for patent infringement.
This is where Bayer CEO Marijn Dekkers got himself in hot water. While the case was ongoing, at a Financial Times conference, Dekkers was quoted as saying, “We did not develop this medicine for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly.” In March of 2012, Bayer ended up losing the case in the Indian courts and was forced to grant a compulsory license to Natco Pharma Limited.
This leads to an important question, “What is the purpose of medicine?”