Bitter Pills:Medicines & The Third World Poor | Page 148

The 1979 report on the results of a survey of 14 Third World countries found
that many are still paying very high prices, even though they buy drugs by
competitive tender. The survey revealed that "At present a large part of drug
purchases of developing countries follow relatively primitive tendering procedures,
if at all, with litle available information concerning alternative suppliers, quality
and costs of the product". (43)
A senior scientist working on the WHO Drug Action Programme confirms that,
whereas it appears very logical and straightforward to suggest that poor countries
should buy drugs on international tender, at least for the public sector, it is hard
to "imagine how they can buy through international tender without a proper means
of communication outside their own country". <44) Very few developing countries
share Cuba's advantages in having both sophisticated quality control facilities and
a market intelligence network operating in major drug producing countries. (451
Mozambique's centralised procurement agency, Medimoc, for example, has
worked under the limitation of poor quality control facilities. These are being
improved, but it has also experienced difficulties in keeping up with demand, partly
as a result of transport delays and partly because manufacturers often require
an advance payment in dollars. Tenders are made annually and it can be a year
before the drugs actually arrive. In the meantime international currency
fluctuations can contribute to dramatic price rises which may make it necessary
to reorder.|461 But despite the problems, Medimoc has achieved excellent results.
Prices paid in 1979 were similar to, or up to 20% less than 1975 prices, without
any adjustment for inflation. In some cases prices have dropped substantiality.
For example the 1979 prices for methyldopa, cotrimoxazole and frusemide were
respectively 72%, 44% and 7% of 1975 prices. (47)

LOCAL PRODUCTION
Developing countries at very different stages of industrial development have taken
active steps to reduce their dependence on imported drugs. Their strategies range
from attempts to obtain the drugs they need by influencing what subsidiaries of
foreign companies produce locally, to building up local production under public
ownership.
In India the Hathi Committee advocated in 1975 that foreign subsidiaries should
be stopped from merely carrying out formulation and packing, particularly of
over-the-counter remedies like vitamin tonics and cough mixtures. The Committee
urged that they should be actively encouraged to set up bulk drug production and
bring valuable technology into the country. (48) Since then a succession of carrot
and stick measures have aimed to implement this policy. The 1978/79 New Drugs
Policy stipulates that manufacturers which only produce finished drugs will have
to reduce their foreign ownership, but those prepared to produce bulk drugs can
keep up to 74% foreign equity, depending on how many they produce and the
sophistication of the technology they import. {49)
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