Friday, June 22, 2007

That's one dull Bright

On, an editorial writer named Bright Simons wrote a piece entitled "Drug Patents Don't Kill Poor Patients." You can read it at I replied:

I have been waiting to see some truly bad reporting or editorializing on OhMyNews, and the inaptly-named 'Bright' B. Simons has finally come through with the goods (so to speak).

Bright takes a dim view of the 'access to medicine' movement, using versions of arguments devised by Big Pharma's small army of public relations hacks. (The only difference is, unlike PR workers, Bright is not getting paid for his hackery.) Since Bright has not used any new insights or statistical research to back up his pro-patent arguments, what passes for the latter can be refuted on a quick trip to the archives of (you can find them in the 'discredited, older than ten years' section).

As for the anecdotal 'evidence' Bright marshals to support his cause (and that of Big Pharma as well), I am left with little to say. I agree that it is bad when plant extracts of wildly varying quality are sold, and consumers cannot tell the difference. What that has to do with first-world pharmaceutical companies selling life-saving drugs at prices only the rich in the third-world can afford, and using government intervention (intellectual property protection) to prevent competition from entering the market and undercutting them, I suppose I am just not Bright enough to know. Perhaps Bright could have spent more time shedding light on such a connection?

I was surprised to hear that Cipla, a trusted name among the 'access to medicine' crowd, would sell its version of heat-resistant Aluvia "at a price three times what Abbott the original patent holder sells it for." Surprised not only due to Cipla's reputation, but also because Cipla is run by human beings who have the faculty of rational thought. Why sell a generic version of a drug at three times the name-brand price? Who the hell would buy it? So I looked up some info on Aluvia, and found that the heat-resistant form of the drug - lopinavir/ritonavir - is manufactured by Abbot, Cipla and Emcure. Contrary to Bright's audacious argument against the proposition that "generic production always lowers the price of drugs," Cipla and Emcure's version of lopinavir/ritonavir is substantially lower than Abbot's. Even more importantly, the low price point the generic manufacturers set puts pressure on Abbot to lower its price - a move it offered to make to Thailand in April if Thailand would only stop its terrifying overtures towards providing impoverished sectors of its population with affordable generic drugs.

As for the rest of his editorial, I do not know where next to turn. Every paragraph reveals a new poorly-reasoned point, such as the one that only 5 per cent of Indian pharmaceutical industry R&D is done on diseases of the poor (as opposed to the zero percent Big Pharma spends). Or the one that low profit margins for first-world Big Pharma augur cripplingly low profit margins for third-world generic manufacturers (do I really need to refute this, or unlike Bright, are we all endowed with at least an elementary sense of economic logic and the concept of cost differentials between first and third-world producers?).

But my favorite bit of idiocy in this piece has to be the neologism, "paleo-communists". (As opposed to those neo-communists thriving the world over.) While it is one of my most ardent wishes that India were in fact controlled by communists old or new, unfortunately, as in the rest of this piece, to the extent that Bright's words have any connection to reality, it consists only in a polar opposition.

Bright responded:
your passion about this subject is evident. But I do not believe you addressed the issues I raised, which are:

1. Increasing skilled-sector wages in the BRICS (the main supply of generics) mean that 1) generics will get expensive 2) generic firms will target affluent western consumers more.

2. Apart from the incidents in Ethiopia, evidence is mounting about substandard generics being dumped in the least developed countries. Without brand jealousy, the incentive to rigorously enforce standards can disappear, and

3. IP protection is good for innovation in the herbal/natural remedy therapeutic industries, which exert a greater impact on public health in poor countries than modern-style pharmaceuticals.

My reply:

Hi Bright,
First, commendations for your restraint! I didn't display much, so you are the better man for that. Can't say the same as regards your position on this issue ;)

3) IP protection in the form of copyright, perhaps, is good here. Then you can have, say, Salma Hayek (c) brand ginseng, and the company making it will try to protect the value of the brand by keeping its quality up (or, unfortunately, plow their money into commercial propaganda to fool people into thinking that their ginseng is high quality, when it is really all the sexy pictures of Salma the company plasters all over town that are getting people aroused). Then, this form of IP protection - assuming there are enough public funds to go towards paying the courts, police, etc. to enforce it - serves to keep even-more-unscrupulous-capitalist X from putting toxic waste into pills and selling them as Salma Hayek (c) brand ginseng. (However, it is ludicrous to say that Ethiopia or an even more impoverished country like Niger should be wasting whatever money it has - including money it has been given - on something like the infrastructure required for copyright protection).

The broad suggestion that IP protection in the form of patent protection is good for innovation is highly uncertain - do you know of any natural experiments in which two similarly situated countries have had opposite policies on patent protection for natural remedies, and what the results were? (Not a rhetorical question.) In fact, the idea that IP protection categorically stimulates innovation is a piece of conventional wisdom in the original, Galbraithian sense - which is to say, widely-believed bullshit. There is no shortage of industries that feature no or next to no IP protection, yet thrive and churn out innovation daily, from one of my least favorite industries, fashion, to one of my favorite, pornography. I would argue that patent protection for natural remedies is counterproductive in that, once Company X has a patent on ginseng, and can exclude everyone else from the ginseng market through the workings of the state apparatus (go to courts, file a suit, sue the patent-infringers, win award, have sheriff enforce award, etc.), what incentive has Company X for improving the product? In fact, if the market for ginseng can be as easily duped as the market for "fruit juice", why not dilute the ginseng with 99% corn syrup - after all, no one else can compete with you. ... Now that is patent protection; copyright protection I have no qualms with, if we are talking about a rich country that can afford such luxuries, or if we are talking about a poor country whose copyright protection costs are paid by a rich country, only after that rich country ensures first that no one is starving to death or dying of diarrhea, for starters.

2) Brand jealousy is a matter of copyright, not patent. So if Cipla produces efavirenz without paying off Bristol-Meyers Squibb, and sells it at a profit reflecting its vastly lower costs of production, that's a patent issue. Now both Cipla and Squibb have a major interest in keeping the quality standards of their products high; but the black market scam artist doesn't. He can produce sugar pills and slap a Squibb or a Cipla logo on the package, and he doesn't care which - that's a copyright issue. There are two separate markets here, the branded manufacturer and the black marketeer. Neither a Cipla or a Squibb has any interest - rather the opposite - to allow its quality to lapse, and destroy its reputation and future in any given (geographical) market. Only a black marketeer has no interest in its reputation, because it isn't putting its own image/face out there as a manufacturer or brand.

1) 1) is pure speculation, but possible. It is vanishingly unlikely however that Indian generics will ever even approach the level of expense of Big Pharma brand-name drugs, due to relatively lower production costs, not only in fabrication but also in terms of R&D. 1) 2) is irrelevant to the question of whether strong, internationally uniform patent protection kills the sick and poor. So what if generics started targeting rich westerners? Well, if Cipla tried to sell its generics in the U.S. market, for example, Big Pharma would have a field day suing it out of U.S. existence. The barriers to legal entry are too high (but some middlemen already sell their products over the internet to United Statesians... the big profits however accrue to the middlemen).

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