Would appreciate any historical background info about this. I wonder about the guy's genuineness since I don't know much about him yet, but regardless of that I'm happy for those who are saved by this. http://dawn.com/2012/06/17/india-firm-shakes-up-cancer-drug-market-with-price-cuts/
Basically the large drug firms price the not insignificant cost of R&D and the approval process and marketing into the cost of the drug. The Indian firms can undersell by only charging for the costs of production. I imagine that there is some validity to both sides. Without being able to pay for the R&D and whatnot, these drugs wouldn't exist. Most of the cost of a drug is in put in the front end developing and creating the drugs. The Indian firms are getting someone else to pay for and do all the work to create the drugs and massive trials to test the drug to make sure they work and don't kill people from other causes. The prices they are charging don't truly reflect the cost of the drug, and if that was the most that anybody was able to charge for the drugs, the drugs simply wouldn't exist because there wouldn't be money to develop them. At the same time, the drug companies profits aren't insignificant and they definitely could lower prices and still come out ahead if they really wanted. When drug companies have a chance to gouge, even on drugs that are necessary to save lives, they pretty much always do. There should probably be some happy medium. FYI, this isn't just true of drugs like cancer drugs. Choosing cancer drugs to illustrate the dilemma doesn't put the drug companies' point of view in the best light. The Indian drug companies do the same thing for drugs that solve first world problems, like Viagra, and drugs for ADD, depression, and obesity. Taking someone else's work as a crusader intent on giving fat old men erections doesn't make you seem quite so humanitarian and noble. People love to hate big pharma because they are massive, nameless, faceless monoliths. There is no human face. There is probably something to that, but I used to obliquely know someone who was high up in R&D for one of the biggest firms and he was very interested and dedicated to creating new drugs to help cure disease. He wasn't cackling maniacally and lighting cigars with hundred dollar bills while strolling on the corpses of little brown children.
I think Ottomaton nailed it. With Indian drug manufacturers coming into compliance with WTO standards, I don't have a problem with what they do either - presumably, they are now respecting the patent process and timeline. That said, I think another big problem is that big pharma prices the same drugs higher in the US than in other countries that can better negotiate prices or put legal limits on them. As a result, US consumers subsidize drugs for other first-world countries. For reasons I don't grasp, US politicians seem to think this is a great state of affairs. But simply allowing free trade competition here and importation of drugs seems like it would spread the costs over a much larger collection of consumers and eliminate that problem.
The approval process in the US is ridiculously long and expensive which is factored into the cost of drugs. There are many drugs and treatments available in Europe and Asia that aren't in the US because the inefficient approval process.
Except most of the countries with the more efficient drug approval processes also have a much more heavily government-controlled healthcare.
People complain about the testing process and how there is too much government control... Until Vioxx happens, and the same people complain that there isn't enough testing and government control and sue Merck for negligence and demand heads roll at the FDA.
Another case of facts having a liberal bias. Drug companies wouldn't make as much money if everyone could afford their drugs and get well now, could they?
I love how everyone portrays drug companies as cartoonishly evil businesses that keep people sick to make mountains of cash. Did you know that 90% of drug company headquarters are inside volcanoes?
Considering the history of IG Farben(later spun off into Bayer) at Auschwitz, it's no wonder people are suspicious of big pharma.
They are probably evil, but this is not a function of being a drug company. Generally, corporations are suited to being evil, they contain all the components, and are collectivist institutions which operate no differently than, say, a harsh dictatorship in a country in terms of hierarchy. This is in a free market in search of natural equilibrium. Not to mention the lobbysits cannonballing into that equilibrium. So all have the same potential to be evil. But there are some corporations in which the product has life saving or life ending properties, but Life is not the priority of that corporation. IMO that's what squarely puts pharamaceuitcals into the "Evil" category. I think it's a natural tendency and, ultimately, this industry will have to be taken out of the free market, and I doubt many people would oppose it other than the corporations themselves. Moreover, any industry which employs a lot of lobbyists generally has en evil feel. Some wiki:
