Contribution by Dweep Chanana
Two interesting articles point to the future direction in the pharmaceutical industry:
BusinessWeek writes about Big pharma’s addiction for lifestyle drugs:
Try as they might to distance themselves from the lifestyle drug sector, pharmaceutical companies can’t seem to kick their addiction to these lucrative products. Even as consumers and government regulators grow more alarmed over drug safety, an examination of four popular lifestyle categories—weight loss, hair loss, sleep, and sexual dysfunction—shows that the pharmaceutical industry is by no means shying away from this controversial territory.
The Economist’s analysis of drug patents under attack in the developing world (from Thailand, to India and Brazil) is particularly illuminating:
At first sight, this row reflects an old dilemma that pits today’s patients against tomorrow’s. Compulsory licensing means that more Thais will get HIV drugs now, but it also means that drugs firms will be less keen to invest in drugs for Thailand in the future. Yet look closer and this is more than a fight between the poor-country sick and rich-world drugs companies. What makes it different is the role of two new actors: muscular middle-income countries and the rising generics industry.
What does this mean for drug development? Big pharma’s “truly innovative” drugs are being squeezed, and they can no longer count on a safe regulatory environment. And simultaneously, “lifestyle drugs” offer ample reward. Will innovation suffer – even more?
Beyond bringing to the surface that rhetorical question, the Economist does pose a useful question. The war on patents in the developing world is probably a good thing, as it pushes the envelope on what is legally possible under the Doha agreement – an agreement that has not yet been tested in international courts.
But it does create a problem. Countries such as India, Brazil and Thailand can indeed get cheaper access to certain drugs by issuing compulsory licenses. But the really poor countries cannot do the same as easily – not because they do not have local drug industries, but because they cannot resist pressure from the EU and US as effectively. As the Economist says, “a perverse result of this trend is that middle-income countries are getting cheaper drugs, whereas quieter and perhaps more deserving neighbours are not.”
It also shows how India’s own response to high drug costs will have to be more nuanced in future. India’s generics drug industry benefits from compulsory licensing. But its “R&D intensive” segment of the pharma industry – which includes Dr. Reddy’s and Ranbaxy – suffer. It was that segment that was most euphoric in embracing new TRIPS legislations. Expect them to lobby for stronger – not weaker – patent legislation. At the cost of India’s poor
