[cdooh]

Why is Cipla able to produce the drug at a fifth the price? Can someone please explain how Western companies price their drugs? How much do they send on R&D, marketing and all that? I mean it doesn't really make them look good does it? P.S. Being from Africa I can testify to how much of a difference Cipla's 1dollar a day AIDS drugs make a huge difference!! Here in Kenya medication is given free of charge under government and NGO subsidies. AIDS is no longer a death sentence if you're poor.

[ashray]

They don't do much R&D. Most of their drugs are copies of drugs that have been developed in western countries. The drugs are just reverse engineered and reproduced. This is pretty legal under Indian patent law and hence carries on, while Cipla, makes massive amounts of money by being just a drug manufacturer.

They do save lives though :P

[cdooh]

I meant western companies how much do they send? I once read an article that suggested that even after they've made back the money spent on R&D they still keep their prices high to keep making a profit

[jeffool]

As an example, GlaxoSmithKline spends 8.826M GBP/13.8683M USD on marketing/sales and cost of business, and 4.009 GBP/6.2993M USD on research.

Most of them make this publicly available on their financial reports on their websites.

http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.p... Page 136

[ams6110]

Well most people are not in business to just break even on their costs.

[DufusM]

From what I have heard from people who work in pharma companies in India, the main reasons drugs are cheaper when manufactured in India are:

- not much R&D costs to design new drugs (however they do spend on designing the manufacturing process) - cheap labor for manufacturing, including a good supply of chemical engineers. - environmental regulations for chemical manufacturing are stricter in Western countries.

[mjwalshe]

yes as the residents of Bohpal can tell you - well the ones that are still alive that is