Intellectual Property: The Reason Chemotherapy Costs $70,000

While my opposition to intellectual property can easily be justified by pointing out the absurdity of driving a man to suicide because he may have violated intellectual property laws I also like to point out the ways intellectual property laws make negatively impact all of our lives. Healthcare in this country is absurdly expensive. Advocates of state controlled healthcare will tell you that the reason healthcare in the United States is so expensive is because of greedy capitalists and inefficiencies inherent in the free market. These claims are false. One of the biggest reason healthcare in the United States is so expensive is because of the state, namely the monopolies it grants on ideas:

Why does Gleevec, a leukemia drug that costs $70,000 per year in the United States, cost just $2,500 in India?

It’s seemingly simple. Gleevec is under patent in the U.S., but not in India. Accordingly, Novartis, its Swiss-based manufacturer, may prevent competitors from making and selling lower-cost versions of the drug in the U.S., but not in India.

Last week, India’s highest court rejected an application to patent Gleevec. While the legal issue in the case is important — the patentability of modifications to existing drugs under Indian law — the impact of the decision will likely be broader than just that issue, escalating a long-simmering fight over patented cancer medications in emerging markets.

Unlike the United States, which suffers under atrocious intellectual property laws, other countries aren’t nearly as idiotic when it comes to such matters. Patents on medical procedures and drugs are one of the biggest contributors to the healthcare costs in the United States. When one company is granted a monopoly on a medical procedure or drug they can set the cost to whatever they want. In other countries where such intellectual property laws aren’t observed producers of medical procedures and drugs must set their prices competitively or be knocked out of the market.