Role of pharmaceutical companies in developing countries.

| February 14, 2020

Question

The topic is the Role of pharmaceutical companies in developing countries. Literature Survey: (5 pages) 1- The literature should have about 15 references from academic journals 2- Define clearly the domain of the literature review. Don’t claim to be conducting a broad review of a topic when you only are covering a single perspective of that domain. 3- Avoid a study-by-study summary of previous studies. The literature review should be backed up by academic references from previous studies while advancing your own point of view. 4- Organize the literature review around the key issues and clearly state what we know and don’t know. 5- Be certain to include both early work and as the most recent work. 6- Attempt to explain inconsistencies in the literature. This is important. References: Please note that the report must be backed up by references quoted in the text by the last name of authors and years (e.g. John and Peter (2008), …). Further, full/complete reference must be written in the reference section in the following format. The assignment must be supported by the findings from academic journals References from the Internet are not acceptable The report should be about 5 pages long (1.5 space, 12 font size)

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Drugs offer a very good way of dealing with the problem of diseases in developing countries. They are an effective solution to the human suffering caused by diseases only when they are readily available, cost-effective and used properly. Pharmaceutical companies have contributed greatly towards the goal of ensuring penetration of drugs to as many markets in the developing countries as possible. However, as Pécoul notes, these companies continue to face many setbacks caused by the fundamental way in which the pharmaceutical market is being regulated in these countries (365). The market is regulated in such a way that prohibitive costs lead to fluctuating in production.

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The problem of regulation of the pharmaceutical market in developing countries brings about many other problems apart from production fluctuations. According to Pécoul, these include the proliferation of poor quality and counterfeit medicines, poor utilization of available drugs and lack of proper, field-based research of the pharmaceutical industry (369).

Wade believes that some governments in developing countries have failed to accord high-priority status to matters of health care (639). This makes it difficult for the issue of regulating the pharmaceutical industry to be addressed nationally, regionally and internationally. The element of control, note Van der Geest and Whyte, are very central to different aspects of the pharmaceutical industry (6). Without proper control mechanisms, it is difficult for pharmaceutical companies to maintain a stable supply of drugs since they can never be sure whether the demand and prices will keep fluctuating or not.

Van der Geest and Whyte attribute the problem of pharmaceutical pluralism as being caused by a lack of proper policies to regulate the interactions between traditional medicines and modern drugs (7). They further note that lack of proper policies lead to situations where “modern” medicines are distributed and used in a manner that the manufacturer never intended. For this reason, the most viable decision for these companies, it seems, is to withhold the production and distribution of drugs into these markets because of the dangers they pose to public health. However, such a decision is not lead to the realization of long-term solutions. Laing reports that to avoid losing out on infrastructural facilities that have already put in place in these markets, pharmaceutical companies find it prudent to support global and multilateral regulatory solutions (16).

According to the Wall Street Journal, the pharmaceutical industry has made a strategic shift whereby more attention is being concentrated on tapping the developing world markets, specifically Latin America. This, the newspaper writes, is as a result of a renewed sense of attractiveness of these markets. The Wall Street Journal gives several examples such as Pfizer’s expansion into China, Brazil, India, and Turkey as well as Sanofi-Avensis, Novartis and GlaxoSmithKline’s sale expansion drive into several developing countries. The policy and regulatory challenges that follow after such initiatives are rolled out are the ones that hamper these industry players from recording significant success in developing countries.

            Globalization has made it possible for pharmaceuticals to cope better with the challenges of marketing their products in imperfectly unregulated markets of developing countries. However, on the other hand, the international associations of pharmaceutical have always been keen to use all available opportunities in order to minimize risks associated with venturing into new markets. In Turkey, for example, Dilek reports that pressure of global regulations has been high on turkey especially with regard to the pharmaceutical sector (381). The outcome of this pressure has been over-reliance on multinational companies in an effort to strengthen the domestic sector which has been suffering as a result of economic hardships.

            Dilek also notes that efforts to come up with a strong regulatory mechanism have been marred by huge controversies over vested interests and economic protectionism by multinational pharmaceutical companies (384).  He adds that the controversy has been on whether these companies’ priorities should be on playing an economic role or a medical one. Barbier and Aylward insist that in truth,, Bruce there can never be purely medical interests in the heavily commercialized pharmaceutical industry. However, observes (165) if there seems to be an imbalance of priorities whereby shift moves towards economic interests at the expense of medical ones, controversies must emerge.

            Another element of controversy in the role that pharmaceutical companies play in less developed countries arises over the manner in which these drugs are distributed and sold. When no regulations exist, free-market rules have to apply in matters of production, advertisement and sale. In these countries, Dilek says that 30 percent of the entire world’s population has no access to pharmaceuticals and that 70 percent of people in developing countries access drugs through out-of-pocket payments. Rather than pull out of these markets, players in the pharmaceutical industry consider it more prudent to exert influence on the establishment of local regulatory structures, just like it has been happening in Turkey.

            The need for regulations in the pharmaceutical industry in developing countries arises partly due to the sensitive nature of the industry and partly due to the larger aspect of globalization. Different pharmaceutical companies have recently found themselves lock in competition for new markets in an increasingly globalized economy. In these efforts, Van der Geest and Whyte note that these companies are left with no choice but to facilitate the demolition of values and rules that act as obstacles to the globalization movement.

            The issue of pharmaceutical pluralism as described by Van der Geest and Whyte is a manifestation of failed efforts by pharmaceutical companies to do away with traditional medicine practices where herbs, animal and plant extracts are relied on by sections of each country’s population at the expense of “modern” pharmaceutical drugs (10).

On the one hand, these traditional drugs, which are generally considered to be a manifestation of values and rules that are inhibitive to pharmaceutical industry players’ marketing efforts. On the other hand, they are a manifestation of a failed regulatory structure that exposes their users to health risks due to poor packaging and lack of cohesive research approaches. For these reasons, some policymakers in developing tend to appreciate the efforts by pharmaceuticals industry players to introduce new regulations on production, sale and usage of drugs.

The pressure that is mounting on developing countries to introduce and/or enforce patent protection to all pharmaceutical drugs, says Nogues, is part of the regulatory conditions that multinational drug companies deem necessary for meaningful economic and medical engagements to take place for purposes of mutual benefits and sustainability (16). Patent protection, says Chaudhry, is very important to the pharmaceutical industry, where research-intensive investments are always being pursued (230). These patents tend to have both legal and economic implications. Whereas they prevent the proliferation of counterfeit and substandard drugs, they are an effective tool for ensuring that drug prices are always high.

Although the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) binds all countries to grant as well as enforce patents intended for new pharmaceutical products, Ganslandt et al observe that developing countries seem to be lagging behind in the implementation process. Attaran opines that this could be the reason why pharmaceutical companies see no problem in increasing the prices of drugs in these countries, well aware of the patent violations that exist there (156).

The high prices charged by pharmaceutical companies in developing countries cannot be regarded entirely as exploitative, says Nogues, adding that the research and development processes undertaken for purposes of production justify these prices. It is through such researches that new drugs are invented (12). According to Van der Geest, the emphasis by pharmaceutical companies on the need to restore patent protection also seems to be a strategy of regaining markets lost to generic drug companies, which have brought about very stiff competition since they sell quality drugs at more cheaply (160).

            However, the involvement of pharmaceutical industry players has not been based entirely on commercial interests. Brock observes that the industry has contributed greatly to humanitarian efforts (45). A report by Global Partnerships cites many examples of humanitarian efforts, including African Malaria Partnership, an initiative by GlaxoSmithKline where the drug manufacturer announced its commitment to give out $1.5 million in the form of community grants for use in the fight against Malaria. The same report highlights other companies that have made great contributions to medical development in developing countries, including Merck & Co., Inc., whose participation in African Comprehensive HIV/AIDS Partnerships (ACHAP) was very significant since the formation of the initiative since 2000.

            Scherer says that it is through humanitarian health programs that multinational pharmaceutical companies feel the compulsion to contribute towards the process of streamlining the regulatory structures of the pharmaceutical industry in these countries (101). Without these proper mechanisms of producing and distributing drugs, opines Reich, all health interventions of these companies would be a wasted effort (14).

            Reich observes that the role of pharmaceutical companies with regard to ensuring that proper regulatory mechanisms is a classic case of partnerships between the public sector and the public sector in the provision of medical care (15). The quality of these partnerships determines the extent to which both sectors benefit and ultimately, the scale to which the quality of billions of people in developing countries is improved.

Works Cited

Attaran, Amir. “How Do Patents And Economic Policies Affect Access To Essential Medicines In Developing Countries?” Health Affairs, 23.3 (2004): 155-166.

Barbier, Edward, and Aylward, Bruce. “Capturing the Pharmaceutical Value of Biodiversity in a Developing Country”, Economic issues 8.2 (2004) 157-181

Brock, Dan. “Some Questions about the Moral Responsibilities of Drug Companies in Developing Countries” Developing World Bioethics 1.1 (2001) 33-37.

Chaudhry, Sudip (Ed.). “The WTO and India’s Pharmaceutical Industry (Patent protection, TRIPS, and Developing Countries)”, J Pharm Pharmaceut Sci 12.2 (2009) 229 – 238.

Dilek, Semin. “Globalization of the Pharmaceutical Industry and the Growing Dependency of Developing Countries: The Case of Turkey” International Journal of Health Services, 38. 2, (2008) 379-398

Ganslandt, M. et al.  Developing and Distributing Essential Medicines to Poor Countries: The DEFEND Proposal, Oxford: Blackwell Publishers Ltd.

Laing, R. et al. “Ten Recommendations To Improve Use Of Medicines In Developing Countries”,    Oxford Journals: Medicine-Health Policy and Planning, 16.1(2001) 13-20.

Medical news today “Wall Street Journal Examines Pharmaceutical Companies Expansion Into Developing Countries” http://www.medicalnewstoday.com/articles/156748.php

Nogues, Julio. Patents and Pharmaceutical Drugs: Understanding the Pressures on Developing Countries. Washington, DC: The World Bank.

Pécoul, Bernard et al. “Access to Essential Drugs in Poor Countries: A Lost Battle?” Journal of American Medical Association 281.4 (1999) 361-367.

Reich, Michael (Ed) Public-Private Partnerships for Public Health. Cambridge, MA: Harvard University Press

Scherer, Frederic. “Pricing, Profits, and Technological Progress in the Pharmaceutical Industry” The Journal of Economic Perspectives, 7(3) (1993) 97-115

Van der Geest,  Sjaak and Whyte, Susan. (Eds). The Context of Medicines in Developing Countries: Studies in Pharmaceutical Anthropology. Dordrecht: Kluwer Academic Publishers, 1988.

Van der Geest, Sjaak. The Illegal Distribution of Western Medicines in Developing Countries: Pharmacists, Drug Peddlers, Injection Doctors, and Others. A bibliographical Exploration. Oxford: Oxford University Press, 2000.

Wade, Robert. “What Strategies Are Viable for Developing Countries Today? The World Trade Organization and the Shrinking of ‘Development Space” Review of International Political Economy 10.4, (2003) 621-644

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