Either Bayer spent $2.5 billion developing a cancer drug — or it didn’t, and the company is using fraudulent accounting to protect itself.  Who do you believe?  Bayer or the Indian government that wants to force the drug to be licensed in the country at a far lower cost than the $70,000 annual charge for it.  Once upon a time, one might believe a pharmaceutical company implicitly because of the discoveries it was making.  No longer.  There has been enough chicanery in the drug business to smear the industry.  On the other hand, India hasn’t clean hands either.  Corruption is rife in the country, and one could allege that a compulsory license is one way of soliciting bribes from Bayer.  So, who do you believe?  Here is where credibility is worth billions in revenue to Bayer and in savings to India.  The deck seems stacked against Bayer at this point and from a PR perspective, Bayer will need to justify its numbers in detail to turn the situation around.  If it doesn’t, it is likely to lose pricing power.  From the perspective of other drug manufacturers, if Bayer is telling the truth, then there is little incentive to develop new drugs only to lose the revenue from them.  It’s a tough call.

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