E-DRUG: Quality pharmaceutical manufacturing in LDCs -possible? (4)
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[Small countries have started with production of ORS and simple IV fluids - transport of what is basically water is expensive. Local production can save lot of money. You don't have to aim for products that need compulsory licenses at the start. Moderator]
Personally too, it is quite frustrating having to distill all the
various arguments for and against local production and to make sense
of them.
The domininant oligopoly firms stand to benefit from a lack of
diffusion of productive capacity, as price differentials before and
and after the introduction of generics (or the threat of compulsory
licenses) clearly attest.
Whatever happened to the promise that IPRs would lead to diffusion and
disemination of technologies (not just of consumption of technology
rich goods in protected markets). The rationale for IPR protection
gets lost in what amounts to a protection of investment argument (in
favour of the BigPharmaOligops) instead of a knowledge based model
(disemination, diffusion and forward and backward linkages).
I agree that there is a lack of capacity, but this is no argument for
not developing that capacity (this advise is like telling the Japanese
not to go into car manufacturing because it is too difficult and they
have no comparative advantage). Michael Porter has talked about
dynamic imperfect competition and created comparative advantage - is
it that these concepts are too sophisticated for Africa or there is
too much of an infrastructure gap? By this I do not mean to play the
race card, but really the so-called sophisticated evidence and
arguments against building African capacity (in particular and
distinct from say Asian capacity) are quite pedestrian and that is
being generous!
There are more sohpOn LDCs Carlos Correa has argued in a background
paper (UNCTAD 2006)for more nuance in addressing these issues - there
are different levels of capacity initiation, internalisation and
generation (basic formularies, more complex adaptations and then
creation of new knowledge).
And then there is the issue of scale. If one looks at the WHO mapping
of the malaria health services in Kenya, one sees a mess (with some
saying that simply managing the assistance being more costly than what
is actually delivered) with all sorts of requirements including on
procurement. It seems like the Paris Declaration on Aid Effectiveness
is only for recipients and not for donors. If there state were
strengthened, the issue of scale could be sorted so that in the medium
term capacity and a viable local market is built up. This issue of
price applies to local production, while at the same time pundits
argue that BigPharmaOligops should be allowed to charge any price they
want. Apparently price sensitivity as a variable in these arguments
applies only when talking about local production but many pundits then
get very coy when it is monopolist patent pricing flexibilities in
question.
There are a number of groups challenging this perception and there is
nothing like killing a good idea like local production and setting it
up to fail. Is the Ugandan experiment to go the same was Zimbabwe's
(not receiving support).
In food we have seen that where food aid floods the market, it can
break productive capacity of African farmers, causing longer term food
aid needs. Nice, no? Donors get to do charity and Africans can shine
their begging bowls. It took a campaign to get this sorted out - I
mean really! How many donors are going to buy from them? How many
generic producers are offering them advanced services (selling other
skills instead of just pills) like marketing, quality control, etc.
The same can happen here and then every one can say oh we tried it and
it does not work... Africa... the dark continent eh?
Perhaps it is also a matter of perception, why is it that with a tool
as powerful as monopoly right protection, Africa is not able to beef
up its productive and delivery capacity? Is it not a good deal to say
to African health workers, why go be a low level pharmaceutical
functionary in the North when you can own/run/build a factory at home?
For all the aid and good intentions, as one African, it is hard not to
come to the conclusion that consumption of high tech goods equates to
technology transfer and that the rich country PharmaOligops must be
protected whatever the cost. The situation is so desperate that even
African progressives have to laud the Doha Declaration - which gave us
rights we already had.
So I think some clarity of perspective and good values is ALSO needed
to move this debate forward and to increase African self-reliance.
Riaz Tayob
SEATINI South Africa
Riaz Tayob <riaz.tayob@gmail.com>