"We didn't make this drug for Indians"

If you're tuning into the latest drama over expensive drugs, that might be all the coverage you hear. No rhetorical strategy works better than implying your opponent harbors deep hatred and violently racist thoughts, and wants poor brown-skinned people to die, just because they are not white.
Especially when we're talking about Germans. Just look at the guy. He's basically a Nazi!

I cure cancer and make toasters. Also, I'm Dutch, not German

The real issue lies in something called "compulsory licensing." Imagine that today you invent Time-Travelling Ninja Robots that are immune to magical spells, and it just so happens that tomorrow China declares war on us with an army of Gandalf the Gray clones leading the foray.

 

Under a regime of compulsory licensing, the Defense Department could force you to give up your Ninja Patent to Ford Motor Company. Why? National Defense, that's why.

 

But what about saving lives?

 

Modern drugs prove incredibly expensive, and, indeed, outside the reach of many patients. The treatment for this guy's cancer-killer comes out to $100,000 a year or something like that, which is just a weeeeeeee bit outside the price range of a nation with a per capita income 1/3 of China's.

 

 

The idea of a compulsory license is not new, and yes they are contentious. The general WTO rule, is that you can break a patent (and let's not be sissies and pretend it's not) for domestic consumption, but not for purposes of export. And then there's another exception, that nations that cannot possibly make the drug get a waiver. So India cannot export this cancer drug, except to Mozambique, because Mozambique can't make this stuff.

 

India, however, has only recently issued a compulsory license, for this one drug, back in 2012, and they are obligated to provide Bayer an appeal. Think of this as a test case.

 

Now, what did Bayer actually mean when they said "We didn't make this stuff for Indians"? He means that even though India screwed the market, it doesn't matter, because profit projections are based on sales in advanced economies.

 

So why do we care if India steals our stuff? I mean, doesn't hurt anyone, right?

 

Ever buy a US pickup truck? Probably, because foreign trucks are taxed at an incredibly high 20% because of some stupid chicken stuff back in the 1950s. But once enacted, policies have a habit of lasting forever, like some sort of mal-formed zombie that wears a bullet-proof helmet.

 

 

Pictured Above: Corporate Tax Reform

 

And while India is somewhat poor today, it is developing, and someday might be an essential market for our goods. And since we're a high value-added, R&D, intellectual property economy, we have an issue if India can simply extract the value of all our work. In the sense of, reimagine the entire economy, because we have nothing scarce anymore.

 

It might be necessary in some cases. The HIV crisis is a good example, along with other communicable diseases. It is not, however, immediately clear why prolonging a person's life 5.5 months instead of 2.8 months is a public health problem sufficient enough to break a patent. It is also not immediately clear why India cannot spend some of its $163 billion corruption and Su-30MKI budget on apparently life-saving drugs.

 

Probably too busy creating ballistic missile submarines to deter mighty China with its recessed nuclear arsenal, or a Pakistan too crippled to successfully deter the Taliban.

 

 

There ain't no such thing as a free lunch.

 

-Robert