Why Is Everything Cheaper in India?

There may be a long trip to India in your future if you have hepatitis C. That’s because the Indian Patent Office recently rejected Gilead Sciences’ application for a patent on Sovaldi.

You may remember Sovaldi, the nearly miraculous “cure” for hep C that was approved by the FDA a little more than a year ago. Gilead decided to market the drug at a nice round number — $1,000 per pill — and that decision has been controversial ever since. A 12-week course of treatment runs about $84,000.

Gilead offered to sell the drug in India for a whopping 99% discount, but apparently that wasn’t enough. If an Indian generic drugmaker can replicate the treatment, says a study in the journal Clinical Infectious Diseases, a full course of treatment should cost about $136. A generic drugmaker in Bangladesh just days ago issued a copy of the drug it intends to sell in countries where Gilead has no patent protection.

The rejection was immediately appealed to the high court in Delhi, which back in February overturned the ruling and said the patent office had erred procedurally. Since then, Gilead made a deal with the Indian drug company that brought the suit, Natco Pharma Ltd. The firm is now licensed to sell a generic version of Sovaldi at a steep discount in 91 countries, but, of course, not the United States.

Another eight Indian pharmas are also now licensed to make Sovaldi at a steep discount. The Indian companies will sell Sovaldi for about $10 a pill, or $900 for a full course of treatment. The story makes an American scratch his head wondering how Gilead can offer a full course of the drug to India for less than what a single pill costs here.

We seem to remain the world’s fools when it comes to paying for drugs, because our laws do not allow the government to negotiate with drug companies over medications covered by Medicare.

To a bright future,

Stephen Petranek
for The Daily Reckoning

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