Bitter Pills:Medicines & The Third World Poor | Page 189

NEW STRATEGIES
Ciba-Geigy certainly adopts a more open style than many manufacturers in
acknowledging the need for a special Third World policy and in making clear what
this is. A recent article in Business International refers to Ciba as "The first known
major drug company to establish a specific corporate policy acknowledging an
ethical responsibility to meet the 'special needs' of developing countries". (l07)
Ciba set up a new subsidiary company, Servipharm Limited, in 1977 - the very
year that the first WHO selection of essential generic drugs was produced.
Servipharm markets a range of its own brands of generic drugs ('branded generics')
- many of them included in the WHO selection.(108)
Ciba-Geigy and other manufacturers that have diversified into producing branded
generics have clearly not been motivated solely by a sense of corporate responsibility
to the world's poor. As the Director of the British Office of Health Economics
explains, "Many western research-based companies have seen the economic logic
of supplying certain basic medicines to the less developed countries at lower prices
than would be economic in relation to the more affluent nations". <109) (our
emphasis)
Moreover, Ciba-Geigy has not been slow to make contingency plans to protect
its profitable research base. Its Third World policy document states: "In cases
where, for reasons of economy, it is impossible to include original Ciba-Geigy
preparations (ie brand-name products) in these national lists, Ciba-Geigy Pharma
will try to secure the necessary financing (eg via the World Bank, developmental
aid organisations, etc) by taking the initiative itself." ( " 0)
The issue of how to respond to the perceived threat to their market power from
large-scale, low-priced generic production concerns all the research-based
technology-intensive manufacturers. A book published in 1982 identifies over
a dozen "defensive", "offensive" and "anticipatory" strategies open to the
market leaders to safeguard their speciality medicines still under patent. (111)
The strength and weakness of the WHO model list of essential drugs - the fact
that it is open to interpretation - makes it possible for the research-based
manufacturers to try to persuade Third World regulatory authorities to include
some of their latest patented products. As many as 63 of the drugs included in
the WHO list are given as "examples of this therapeutic category" and health
authorities are advised to "choose Q t h e ^ cheapest effective drug product
acceptable". (112) This leaves the door wide open for manufacturers of
antibacterials, antidiarrhoeals, psychotherapeutic and other drugs to argue the
special case for purchasing their more expensive but 'better' patented products
which may offer few signifcant advantages over far cheaper, older drugs.
Some commentators see the strategy of diversification into branded generics
pursued by some of the leading manufacturers as a very mixed blessing for the
world's poor. They fear that the biggest companies, with the advantages of large
economies of scale in production and advertising will undercut any smaller
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