Bitter Pills:Medicines & The Third World Poor | Page 55

up about £31 of the British family's budget. One hundred aspirins sold under
Fisons' brand name, Genaspirin, have a maximum retail price of 82p in Britain.
In Bangladesh their actual cost is 27p or 2.5% of the poor family's income equivalent to £14.57 for the British family.(7'
A French pharmacist, Dr. Pascale Brudon, has used the United Nations purchasing
power parity system to calculate the true cost of identical products in a number
of different countries. Her analysis reveals that, particularly in the least developed
countries, the real cost of drugs is very much higher than in the major drug
producing nations. For example, Ciba-Geigy's antidiarrhoeal, Mexaform, costs
one-and-a-half times more in Mexico than Switzerland, 6 times more in Indonesia,
13 times more in Niger and 20 times more in Upper Volta. (S|

'WHAT THE MARKET WILL BEAR"
There is every indication that drug prices are determined as much by market factors
as the actual costs of production and supply. (9)Some of the most compelling
evidence is the way that manufacturers have dropped their prices massively in
competing for orders for the public sector, as opposed to acting as monopoly
suppliers to private importers."" 1
The extent to which prices are influenced by competition on the local market is
indicated by the following extract of E. Merck's "Bangladesh Marketing Plan
1980 (-1982)". This refers to the company's product, Neurobion, which accounts
for most of local sales turnover. "The movement of both tablet and ampoules
are very fast and being the leader overshadowed other neurotropic vitamins. The
reasonably good turnover of Neurobion has drawn the attention of our competitors
and some of them are seriously thinking to produce identical product locally.
Although the high price is acceptable by the market, but becoming burden to the
consumers and it's constant complaint from the doctors". (ll) (our emphasis)
Our research supports the conclusion reached by earlier studies that manufacturers
appear to charge what the market "will bear". (12) But external market forces
alone do not account for all the price discrepancies. The stucture within the industry
makes it inevitable that identical drugs are sold at very different prices. There
are exceptions, but as a rule the research-based companies charge one set of prices,
and the non-research-based producers another.

IT'S ALL IN THE NAME ...
Perhaps surpirsingly, the easiest way to focus on the reasons underlying
manufacturers' very different price strategies is by looking at the name under which
a drug is marketed. Initially, the research chemists who develop a new drug will
refer to it by its chemical name, as for example, '7-chloro-I, 3- dihydro-Imethyl-5-phenyl-2H-I, 4 benzodiazepine-2-one'. The active ingredient or drug
is then patented and - fortunately for non-scientists - it is given its generic or nonproprietary name. The generic name, 'diazepam' in this case, means the drug can
be easily recognised internationally. When the drug is ready to be launched on
the market, its manufacturers give it an exclusive proprietary or brand name.
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