Bitter Pills:Medicines & The Third World Poor | Page 152

New drugs are not the only problem. Most regulatory authorities are confronted
with the existence of a mass of similar and non-essential products that have already
been licensed for sale. In April 1982, the Mexican Government announced new
regulations designed to make it easier to cancel existing licences. Whereas product
registrations used to be valid indefinitely, they will now be subject to review every
three years. If the manufacturer does not apply for a product to be re-registered,
its existing licence will automatically lapse. In future the Mexican regulatory
authorities will also have new criteria on which they may decide to cancel registration.
These include evidence that the manufacturer's original registration documents were
misleading, and any cases where combination products have no clear advantages
over single-ingredient drugs. <661
The major constraint on effective registration systems is often that the regulatory
authorities lack the powers to enforce their decisions. For example, according
to the 1979 Annual Report of the Supreme Board of Drug Control in North Yemen,
on occasions their procedures have been completely by- passed. Manufacturers
have approached other apparently more sympathetic departments to get
permission to market their drugs. (671

IMPORT AND PRICE CONTROLS
A considerable number of Third World governments apply some form of controls
on the prices of finished drugs. Some try to prevent retailers from overcharging
by compelling manufacturers to print the maximum retail prices on the packs.
This measure is enforced in North Yemen and Pakistan. (68) Some governments
have been particularly successful in keeping down prices. Egypt, for example,
applies strict controls to all drug prices. (W>
Over the last ten years successive Indian Governments have introduced a variety
of measures in attempts to peg the prices of finished drugs. With about 15,000
formulations on the market, the Government has been forced to implement
selective controls. One scheme was based on regulating the prices of some of the
market leaders' products. But the drug price index continued to rise. According
to a recent case study by the UNCTC these controls proved ineffective because
they covered only about one-third of the manufacturers' products. "Apparently,
pharmaceutical firms took advantage of the loopholes in the (Drug Price Control)
Order and increased the prices of unregulated drugs to compensate for the controls.
Also, the price of imported raw materials and intermediates remained largely
outside the purview of the new controls." <701
The main difficulty faced by governments attempting to control prices of finished
drugs manufactured locally is that they are seldom in a position to evaluate
manufacturers' figures on their production costs. Drug control agencies
throughout the world have problems in assessing transfer prices for chemical
intermediates and bulk drugs.
Amongst developing countries, the Colombian Government made what the
UNCTC described as "pioneering efforts to monitor transfer pricing and detect
abuses." (7" The process began some years ago when a Colombian economist
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