It may not be what you think.
The Obama Administration is annoyed at India for siding with common folk over Big Pharma.
The Indian government occasionally annuls medicinal patents when the drugs are not affordable for the country's ordinary citizens. Top U.S. officials, including President Obama and Vice President Biden, have been urging India to change its approach and keep drug prices high. Obama even went to bat for the drug companies in a meeting with Indian Prime Minister Manmohan Singh in the Oval Office some months ago, The New York Times reports.
A huge concern of the pharmaceutical industry is that not only may it lose money in the huge Indian market (1.2 billion and growing), but that India may also set a "bad example" for other countries.
"For drug companies, the most worrisome aspect of India's efforts to lower drug prices is that other countries are beginning to follow its lead. Both Indonesia and the Philippines recently adopted patent laws modeled on India's, and legislators in Brazil and Colombia have proposed following suit," the Times adds.
And in the ultimate nightmare for such corporations, the availability of their drugs at such low prices in India may cause folks to question why people are paying so much for crucial medicines here at home in the U.S. of A.
"Why should we be giving away Herceptin in India and China when we have insured women in the United States who can't even afford the co-pay?" Dr. Peter Bach of Memorial Sloan-Kettering Cancer Center told the New York Times. "Nobody really asked that question about AIDS drugs in Africa. But with cancer medicines, people will ask, and that's what scares the pharmaceutical industry."
It's interesting that Bach mentions AIDS drugs because that's where the Indian and the U.S. governments previously clashed over drug prices. As a consequence of India amending its patent law in 1970, AIDS patients worldwide were able to afford lifesaving drugs decades later thanks to the Indian generic drug industry.
This didn't please the Clinton Administration and its pharmaceutical funders. President Clinton tried to arm-twist India into reversing policy, until activists made it too embarrassing for the White House to display such callousness.
Clinton has since said that he regretted his stance then, and the Obama Administration is too savvy to restart the fight over AIDS drugs. But the battle involving cancer medicines is no less a crucial one. More than twice the number of Indians die from cancer than from AIDS. The fact that drug companies have been a "major contributor" to Obama (as The New York Times delicately puts it) is no excuse.
Supporters of the pharmaceutical industry's mission for stricter patent laws argue that this is the best system for innovating new drugs.
Not so, argues economist Dean Baker, the co-director of the Center for Economic and Policy Research.
"Patent monopolies are an antiquated and incredibly inefficient way to finance drug research," he writes. "There are other mechanisms: for example, the $30 billion annually spent on research by the National Institutes of Health. Paying for research up front, rather than through government-granted patent monopolies, would eliminate the incentive to lie about the safety and effectiveness of drugs. It would also allow for much faster progress, since all results would be fully public so that researchers could more easily build on each other's findings."
Obama should commend India for doing the right thing, instead of prioritizing corporate profits over lives.