E-DRUG: A suggestion for improving Access to genuine drugs (9)
Production is certainly not rocket science. Investing in and managing a
production facility however faces a number of uncertainties though.
There are a number of critical issues that need to be addressed in
1. Economies of scale are certainly important, but plays second to the
issue of "size of the market". The size of the market (demand) is very
limited in Africa given the tie in arrangements (buy branded or from
particular suppliers etc) and the approach of favouring "lowest" cost
products instead of local or regional production (the latter has been
dealt with ad noseum with mixed levels of success in the food aid
discussions). So the point is, what is the minimum efficient size of
operations that makes "business sense" and what are the challenges to
the demand side.
2. There are different levels of capabilities if one is setting out to
produce. Correa highlights the stages initiation (simple formularies,
repackaging etc), internalisation (where higher activities) and
generation (creation of new knowledge). This categorisation was
rejected/not prioritised by most of Civil Society in the WHO neglected
diseases initiative, notwithstanding its critical importance at
3. Finally, the political aspect. Any country seeking non-branded
products faces enormous political pressures not to move into production.
In fact the WHO and large swathes of CSOs STILL support a 0% tariff
policy as if tariffs have not historically been used to develop
industries. This merely increases the uncertainties raised in 1 above.
That much of the arguments of these groups is actually supportive of
monopoly pricing by rights holders is lost in the debate even though any
pricing comparison (like HAI/WHO) hits a range of deceptive barriers for
price comparisons (including different packaging, reporting of costs
FOB/CIF, etc). Given the differential pricing and exploitation that is
well documented it is perhaps telling that this generalist point is lost
in the prescriptions adopted by much of progressive society - because
the link between tariffs and productive capacity is not well
In the 1970s and 80s Surendra Patel of UNCTAD pushed the argument
strongly that consumption of technology rich goods does not equate with
technology transfer. This seems no longer to be the case in large
measure. That the HIV/AIDS movement has yet to come to emphasise this
enough is perhaps a reflection both of need and a particular reading of
international political economy of health.
SEATINI South Africa
Riaz K Tayob <email@example.com>