Abid Aslam
WASHINGTON, Nov 27 2007 (IPS) – Drug firms are missing potentially valuable business opportunities by failing to meet the needs of consumers in developing countries, an international charity said Tuesday.
The group Oxfam International, in a new report, said the 700-billion-dollar-a-year pharmaceuticals industry continues to price their products beyond the reach of the world #39s poor. Additionally, it said market opportunities also were being squandered by firms #39 failure to develop more medicines relevant to poor countries and their intransigence over trademark issues.
The industry is burying its head in the sand, said Jeremy Hobbs, the group #39s executive director. More than 85 percent of world consumers are underserved or have no access to its medicines.
Charging high prices, quashing generic competition, developing medicines only for those rich enough to pay, and fighting for harsher patent laws is an ineffective business strategy for new markets as much as it is a moral outrage, Hobbs added.
The richest 15 percent of the world #39s population consumes more than 90 percent of its medicines. Millions of poor people are left to pay with their lives for the scarcity of drugs where they live: tuberculosis kills two million people a year and malaria another one million.
The report, Investing for Life , urged the pharmaceuticals firms to set prices for all essential medicines according to people #39s ability to pay. Oxfam acknowledged that some firms already have done so but said such examples were few and mostly restricted to high-profile diseases like HIV/AIDS.
Related IPS Articles
However, the International Federation of Pharmaceutical Manufacturers and Associations said drug makers helped 1.3 billion poor patients between 2000 and 2006 with donations of drugs, vaccines and diagnostic tests valued at 6.7 billion dollars.
Even so, Oxfam countered that the industry #39s heavy reliance on donations is unsustainable and sometimes counter-productive.
The charity demanded that drugs companies research and develop more products to tackle diseases that afflict poor people in developing countries. Between 1999 and 2004, it said, pharmaceuticals firms brought 163 new drugs to market but only three of these targeted developing-world diseases.
Oxfam further urged firms to stop challenging poor countries #39 ability to compel them to drop their prices or cede markets to generic competitors in the face of public health crises.
In recent years, companies have mounted legal challenges or exerted direct pressure to protect their patents against what Oxfam termed the legitimate use of safeguards in Brazil, India, the Philippines and Thailand.
Yet when developing countries #39 governments have prevailed, poor people have benefited and drug firms have maintained their market presence, according to Oxfam.
The group cited two instances where drug makers slashed prices in response to action by the Thai government. The cost of the heart drug Plavix was cut by 70 percent and the worldwide price of the AIDS drug Kaletra was reduced by 55 percent, the report said.
Drugs firms have said their prices reflect the high cost of research and development. Oxfam argued they could lower these costs by moving scientific and manufacturing bases to the developing world. Many firms have long allowed drugs to be made there under license, and some also have set up or have announced plans to establish their own facilities in China and other emerging markets.
Pharmaceuticals companies also have said that the prices patients pay for their products reflect pharmacists #39 and prescribing doctors #39 mark-ups as well as taxes.
They further highlighted constraints not tied to drug prices.
Pharmaceutical Research and Manufacturers of America (PhRMA), an industry lobby, said many countries lack functioning public health systems needed to deliver services and medicines to the sick. Doctors are in short supply, with only three for every 10,000 people in many sub-Saharan African countries.
Storage and distribution systems are nonexistent or poorly managed, PhRMA said, citing World Bank estimates that for every 100 dollars African governments spend on drugs, only 12 dollars #39 worth of medicines reaches patients.
The group further chided developing countries #39 governments, saying they have not made health care a spending priority.
Health care services have often taken a back seat to defence spending; even worse, there have been instances of available health funds being left unspent due to bureaucratic mix-ups and mismanagement, it said.
