E-drug: Concession to national pharmaceutical companies (2)
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A company with a subsidiary in a neighbouring country can
transfer products to the country in which the drug will be sold
and get a better price.
This is not possible because national production units are well known
in the countries
Can somebody enlighten me with regard to the rationale of
giving a concession to national pharmaceutical suppliers, and
if the rationale has been to give protection to national
industries has the policy worked as intended?
Main reasons are/were that in many countries import duties on "final
products" as drugs are much lower than duties on raw materials. In many
african countries drugs are now exempted or only taxed for 5-10%. Raw
materials can go up to or even more than 100%.
Consequently, national production price is higher than importing drugs
In many african countries productivity is lower than eg european or asian
countries.The adavantyage of lower labour costs are partially loosed.
Industrial output is lower. In many cases production costs are the same or
even higher (investment costs are a global cost; high costs to obtain
energy, infrastructure costs are in many cases at charge of a factory,
etc.)
Which indicators have been used to measure the achievement of
policy objectives?
As far as I know, there are no indicators to measure. I participated in
several procuremnt analysis and even in that case national production was
still more expensive.
Regards
M. Lijdsman, CHD - Consultants for Health & Development
Private: Boite Postale 443 - Kigali - Rwanda
Phone/fax: + 250 82052
E-mail: 100577.2657@compuserve.com
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