Re: Oxfam report "Investing for Life", Health Supplement, November, 27th
Dear Sir,
I refer to the article Oxfam criticises drug firms for price and patent policies. The article included claims by Oxfam that pharmaceutical companies are "guilty of denying medicines to millions of poor people".
The truth is quite different. As noted by former UN Secretary General Kofi Annan, poverty and a lack of basic healthcare infrastructure to distribute medicines are the greatest barriers to access to medicines in the developing world. Other factors such as a lack of access to basics such as food, decent housing and clean water, armed conflict, corruption, bureaucracy and the lack of simple prevention measures like condoms and mosquito nets, unfortunately mean that poor health is endemic for the world's poorest people.
IPHA [ Irish Pharmaceutical Healthcare Association] would dispute Oxfam's rather cursory dismissal of industry donation and other programmes. These are eradicating major developing world diseases, strengthening healthcare systems and increasing R&D for neglected diseases - steps which are "beyond philanthropy".
Oxfam and IPHA both believe that industry, along with governments in developed and developing countries, intergovernmental bodies and NGOs, has a role to play in addressing these issues. As such, industry continues to invest enormous amounts of time, money and expertise in building effective partnerships with these organisations.
However, we do have some differences with Oxfam as regard to the way industry can best contribute.
Oxfam calls for greater use of differential pricing. It notes that companies have increased their use of this tool, but complains that it is essentially restricted to "high profile" diseases, notably HIV/Aids and malaria.
This is a fair comment, but only scratches the surface. A number of factors come together to make differential pricing work in these areas. HIV/Aids and malaria have resistance to older treatments, so there is a greater need for relatively expensive new medicines.
These diseases' high profile has led to the establishment of large-scale funding mechanisms, such as the Global Fund to Fight Aids, tuberculosis and malaria and PEPFAR, which are making very significant sums of money available for developing countries to purchase differentially priced medicines for these conditions.
The increase in funding for these specific diseases has not been matched in many other disease areas. Conditions like pneumonia and diarrhoea are also major killers in the developing world, especially among young children.
The medicines needed to combat these are mostly off-patent and should be widely available in generic form. But virtually no money is being put into these disease areas by OECD governments. And without donor funding, even generics are largely unaffordable in developing countries for example, per capita spending on medicines in Kenya, public and private sources combined, amounted to $3.55 in 2002.
Developing countries' tariffs and taxes on essential medicines do not help, as the Oxfam report mentions, but does not quantify. For example, Kenya imposes an average tariff rate of 5.29 per cent on imported finished medicines.
Nor do such policies encourage local generic manufacturing, as imported active pharmaceutical ingredients are also often subject to tariffs - an average of 6.86 per cent in Kenya. And it is not just low income countries that do this: Brazil imposes a tariff of more than 10 per cent on imported medicines, while in Thailand it's more than 18 per cent.
There is a role for wider differential pricing, but it only makes sense if there is broader donor funding, if differential pricing is implemented by generic manufacturers and if developing countries lower tariffs and other barriers to essential medicines.
Ronan Collins, Irish Pharmaceutical Healthcare Association Ltd, Franklin House, 140 Pembroke Road, Dublin 4