A dose of reality about drug prices

Bangkok Post : FOCUS / HEALTH
November 20,2006
By PHILIP STEVENS
Philip Stevens is director of the health programme at International Policy Network, a London-based development think-tank.
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Oxfam recently claimed that the high cost of medicines is caused by tough intellectual property rules and this is why most people in the poorest countries have no access to drugs. The facts are wrong and divert attention from the more prosaic truth: in most countries there simply aren't enough nurses, doctors and clinics to administer to the sick _ even if all medicines were free.


It is not surprising, however, that price of medicines should become the focus of debate. After all, who wants to hand over large sums of hard-earned cash to pay for expensive drugs when, in theory, they only cost a few cents to make in a factory? Surely by weakening patents the government would reduce drug prices, thereby increasing access to medicines for all?


Taken at face value, the answer would seem to be yes. But look a little deeper and you will find that intellectual property and the price of medicines is largely irrelevant in the face of the other major factors that affect a nation's health.


Take the example of India. Since 1975, that country had weak intellectual property laws, in the belief that it would drive down the price of medicines. It certainly did that for some drugs but did it make the Indian people any healthier? The answer is no.


Access to even basic medicines in India remains unacceptably low. Children go without routine vaccinations. Simple off-patent anti-infectives are out of reach of the majority of the rural poor. Despite pumping out cheap generic Aids drugs for years, a paltry 12,000 of India's five million Aids sufferers were receiving the drugs at the end of 2005.


For the Indian poor, the price of drugs is not the issue. The real issue is the parlous state of their healthcare infrastructure. The government-run system is a shambles, riddled with inefficiency and corruption and beset by a lack of resources. The transport network is so bad that rural people struggle to get to a clinic, even if one exists within 100 miles of their home.


Meanwhile, dirty water and cooking fuels exact a terrible toll of disease on the poor. So, when the Indian government decided last year to strengthen its intellectual property laws in order to accelerate India's economic development, it was able to do so because the people did not see a connection between arcane patent laws and the reality of their lives. What they want are hospitals, clinics, doctors and nurses. Without these things, you can give drugs away for free and they still won't get to the most needy. There are similarities with many other countries. In the Philippines, 40% of people will never see a doctor in their entire lives. Clinics and hospitals are rare. PhilHealth, the government-run social insurance scheme, provides very basic cover for only around half of the population. The exodus of healthcare workers to better opportunities overseas has reached such high levels that last year the Filipino Alliance of Healthcare Workers warned that the healthcare system faces imminent collapse. This is compounded by counter-productive policies. Last year, the Philippines increased VAT on medicines from 10 to 12% and _ incredibly _ made previously exempt things like doctors' fees subject to VAT. This amounts to little more than a tax on the sick and dying.


The Philippines is not unique; most countries in Africa, and many in Asia and Latin America have dysfunctional health systems, a lack of health insurance and regressive taxes on medical goods and services. As a result of these failures of governance, less than 50% of people have regular access to essential medicines in some parts of Africa and Asia.


In the end, it is patients everywhere who are suffering from the current fixation with patents and prices. It is taking energy and discussion away from the things that really matter, such as infrastructure, doctors and nurses. Unless these things are made more widely available, people will go on dying from easily preventable diseases.


As for prices, out of 18 comparable Aids drugs named by Medecins Sans Frontieres in an attack on patents, 14 patented drugs sell below or around the cost of generics. Last July, the head of the WHO's Aids division told Reuters: "It is very obvious that the elephant in the room is not the current price of drugs. The real obstacle is the fragility of the health systems. You have health infrastructure that is dilapidated, a health workforce that is demoralised, labs that don't work, supply chains that don't exist and diagnostics that are missing."


Improving provision is not easy. But it would help if debate was actually focused on these life-saving factors. In the face of widespread health crises, diverting energy and attention towards patents is a disservice to patients.