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Home Publications Blogs Beat the Press The Washington Post Claims that Multinational Drug Companies Tried to Use Their Market Power to Pressure India to Change Its Patent Policy

The Washington Post Claims that Multinational Drug Companies Tried to Use Their Market Power to Pressure India to Change Its Patent Policy

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Saturday, 12 March 2011 08:37
According to the Washington Post, multinational drug companies retaliated against India for having weak patent protections by pulling out of the country in the 1970s. The Post seems to imply that this decision could have been motivated by economics. That is not true. If a drug company is engaged in reverse engineering it gains no particular advantage from having the manufacturing facilities located within India. If drug companies left India because of its patent policy, as the Post claims, then the motivation was political -- to pressure India to change the policy -- not economic. 
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written by izzatzo, March 12, 2011 4:32
From the WaPo article, this quote:
"The Indian industry was built to make cheap lifesaving medicines available for its poor. But the foreign takeovers may shift their focus toward exporting to developed nations," said Goyal.

Nearly two-thirds of Indians do not have access to essential medicines. On average, the cost of Indians' drug consumption is among the world's lowest, at less than $5 per year compared to $53 for Chinese and $680 for Americans.


Apparently Dean Baker has finally convinced Big Pharma to compete against itself with generic imports to bring down health care costs in the USA. It's not like prices will increase after the takeovers are complete or anything.
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written by KS, March 13, 2011 5:23
"It's not like prices will increase after the takeovers are complete or anything." Actually, if the major patenting drug firms take over Indian firms that have become some of the most aggressive in challenging patents and expediting generic entry, then these take-overs could indeed raise prices (or, more accurately, delay the reduction in prices that typically come with the entry of generic competition). Note, however, that that is not the point of the article, or the concern of the Indian government referred to here.
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written by AndrewS, March 13, 2011 1:10
You want a crystal clear example of how screwed up our medical patent situation is, check out this story:

Preemie birth preventive spikes from $10 to $1,500 when drug company won government approval to exclusively sell a drug that's been on the market for 50 years.

http://www.techdirt.com/articles/20110311/01545013458/retroactive-drug-monopoly-raises-rates-10-to-1500.shtml

This has to change.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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