Friday, April 25, 2008

An opinion about generic drugs

Thompson Ayodele, President of the Initiative for Public Policy Analysis, in Lagos, Nigeria sent me the following:
WHO Conference Attendees Wrongheaded In Their Support for Pharmaceutical Patent Busting

For Developing Countries without Healthcare Infrastructure, Free Drugs Are Largely Useless

LAGOS, NIGERIA (April 25, 2008) -- Many of the delegates attending the World Health Organization’s public health conference in Geneva next week have expressed their support for compulsory licenses, which allow governments in the developing world to break pharmaceutical patents and produce generic knockoffs domestically. This support is misguided. Compulsory licenses won’t increase access to life-saving treatments, and, if widely used, will actually undermine pharmaceutical innovation.

“Compulsory licenses do not address the real reason Africans can’t get essential medicines: the inability of governments to actually deliver drugs,” said Thompson Ayodele, President of the Initiative for Public Policy Analysis, a think tank based in Lagos, Nigeria. “Pharmaceutical companies use patents to recoup the cost of investment. By undermining patents, compulsory licenses act as a disincentive for drug makers to develop new medicines.”

At best, compulsory licenses are a short-term solution. Africa’s health system is plagued by countless problems totally unrelated to patents, and they are largely responsible for the fact that patients can’t get the drugs they need. These problems include government corruption, under- or non-payment of healthcare workers, low staff morale, and widespread lack of the facilities need to deliver drug.

These problems are exacerbated by government meddling. Many African countries have imposed port charges, additional taxes, tariffs, and VAT on pharmaceutical drugs. These policies can inflate drug prices by up to one-third.

What’s more, domestic firms often produce sub-par drugs, which can actually increase the rate of drug-resistance disease strains.

Ayodele continued: “If every drug on the activist wish list were made free tomorrow, most Africans still wouldn’t have access to them. Compulsory licenses simply don’t address the fact that the infrastructure needed to deliver these drugs isn’t there. Rather than call for the willful destruction of patent protections, conference delegates should support measures like increased investment in healthcare infrastructure and scaling back taxes, tariffs and VAT.”

The Initiative for Public Policy Analysis ( is a non-governmental, non-partisan public policy think-tank based in Lagos, Nigeria, which promotes market-oriented analysis of current and emerging public policy issues in Africa and Nigeria.
I was pleased to see this opinion from a respected colleague in Africa. As Tr-Ac-Net develops the Community Impact Accountancy framework, it will become much easier to see the underlying value chain that is a root cause of so many of the socio-economic problems in Africa.

And with a good understanding of the value chain, it will be easier to hold resonsible decision makers accountable. While the World Bank, the IMF and other international actors argue for policy change, it has been very clear for a long time that there was more dogma than data that was driving the decisions. When the outcome was good ... it can be argued that this more by luck than because the underlying data and analysis had driven the decisions.

Thompson Ayodele's opinion sounds logical and matches my own experience over many years ... but it will be interesting to see in due course whether these opinions are supported by community impact information. Please stay tuned.


Peter Burgess

No comments: