E-DRUG: Banned importation of esential drugs (2)
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Dear E-druggers,
I can see many reasons why I would not support a total ban on the import of essential drugs. A number of arguments laid below result from our own experience in Mauritius and from my observations as a past drug inspector and procurement pharmacist:
1. It is very difficult to beat prices obtainable on the world market because of economy of scale. Large reputable manufacturers in India may manufacture in one single day or batch the entire yearly requirements of a large country.
2. The absence of competitors influence adversely on prices. In the best case for the patient, the prices will remain more or less at their initial level but substantial price drops may not be expected.
3. The availability of a pricing structure in the manufacturing country is important. I would advise that we look carefully at the pricing mechanism: we had better go for agreed or negotiated prices rather than a price formula based on cost of production + a fixed percentage. That would encourage the local producer to look for expensive sources of raw materials. There are currently many documents available from HAI, WHO, MSF, MSH, which indicate the prices of raw materials and of finished products. The information contained therein provides useful guidance for price determination and verification.
4. A mechanism to dampen the effects of rise in price of raw materials and the parity of the local currency against the US $ may be necessary. Do we go for some sort of stabilisation account, which fixes the parity of the local currency for six months with some compensation at the end of that period or do we opt for a consignment basis, which takes into account every single fluctuation?
5. Smuggling is an important component to take into account. It would not be relevant to simple drugs such as paracetamol but it would certainly be pertinent for higher priced drugs such as amoxicillin or antidiabetic drugs.
6. How far does the ban protect local production? If that production relies entirely on the domestic market and worse on protected markets from public health then it is highly probable that the local producer will "sit and enjoy" and will invest little to develop its production facilities. But how much more is the Ministry of Health prepared to pay for those basic drugs? What is the quantum of % local preference that we are prepared to allow the local manufacturer in our tender procedures?
7. What is the transfer of technology accompanying the local production? Agreements with overseas manufacturers may promote constant upgrading of facilities and the presentation of better products well adapted to the local market. Else production facilities may be frozen for years with the result that the users gradually abandon the product. Export activities also stimulate development and innovation.
8. The marketing aspects are inevitable. What we do to foster confidence in the local products among doctors and patients will determine substantially how well the products sell. If production is not backed by a well-designed Quality Assurance System incorporating external testing and site inspection then it might be difficult to persuade doctors to prescribe the drugs and pharmacists to propose the (OTC) products over the counter. Could financial participation of doctors and pharmacists in the production venture help? Probably. But in some countries, Mauritius being one, such participation is deemed unethical and illegal.
9. Our experience in Mauritius has shown that when such bans existed - that was during the late 70's before IMF and World Bank ruled the practice to be unacceptable - medical representatives bypassed the regulations and simply proposed more expensive products to replace each of the restricted items. The immediate consequence was that cheap (protected) drugs produced locally such as generic chlorpheniramine and betamethasone cream just stopped selling. There is consequently a need for close collaboration driven by policy makers between the drug regulators and the producers.
10. Pharmacists are not pure spirits. They make a living out of selling pharmaceutical products and if the pricing mechanism is "maximum mark-up" based on invoice price then the pharmacist loses money on cheap drugs with a low "landed-cost" or a low "ex-factory cost". Consequently incentives must be given to pharmacists to store the locally-made products and to promote same.
11. Basically we should be looking for complementarity between neighbouring states or within the region (with SADC for example) before embarking on local production of pharmaceutical products unless the products are specific to the local context (a rare feature). Economy of scale is inescapable and every developing country should not be manufacturing basic drugs such as anti-malarials or amoxicillin. The Commonwealth Secretariat has been working on that aspect of pharmaceutical development and useful information could be gathered from them.
12. Intravenous infusions constitute a special case. They require expensive facilities and great skills for production but on the other hand if we choose to import them, then we are paying basically for tons of water with a few pinches of salt or glucose! Large manufacturers produce 500ml of dextrose 5% at about 0.40 US $ a bottle or even less in India. There is no way we can beat such prices.
13. Unfortunately one new parameter has to be taken into consideration nowadays and that is the prospect of war in different parts of the world, which may affect production and availability. Countries should prepare contingency plans to cope with such situations.
14.Capacity of production has also to be examined in the light of the Trips Agreement and of the WTO Council Decision (WT/L/540) of 30 August 2003. This is a complex matter that is still hotly debated.
There are certainly many advantages to local production - provided that costs are reasonable - especially from the Drug Regulators point of view. I may think about labelling and advertisement - since we may decide not to accept or approve all the indications of any specific drug - and packaging - especially in tropical countries or just to exclude expensive presentations! Local production offers the facility of buying off the shelf, which reduces storage costs and storage space. But I reckon that those aspects would certainly be brought forward by my colleagues from different countries.
Regards
Gérard Requin
Chief Pharmacist
Ministry of Health, Mauritius
Tel: +230 201 1334
Fax: +230 210 3891
chpheist@intnet.mu