Oxfam Rips Pharma A New One
6 CommentsBy Ed Silverman // November 28th, 2007 // 7:48 am
Here’s one way to get attention - use the moral high ground to issue a scathing report. And so the relief group accuses pharma of denying meds to millions of poor people and undermining its own future because drugmakers “refuse to change the way they do business in developing country markets.” The Oxfam report looks at the world’s top 12 drugmakers, including their pricing policies, their record in developing meds relevant to poorer countries and their stance on protecting intellectual property rights. (Here it is).
Oxfam charges that pharma is failing to ensure universal access to meds because it refuses to put the issue at the heart of its business model. As a result, the industry is failing to capture the full potential of emerging markets touted as the “new frontier†for its business success. The group also notes that between 1999 and 2004, there were only three new innovative drugs targeted at diseases affecting the developing world out of 163 meds brought to the market.
“The industry is burying its head in the sand. More than 85% of world consumers are underserved or have no access to its medicines. The industry must recognize that charging high prices, quashing generic competition, developing medicines only for those rich enough to pay and fighting for harsher patent laws is an ineffective business strategy for new markets, as much as it is a moral outrage,” Jeremy Hobbs, Oxfam International Executive Director, says in a statement.
Oxfam cites these industry “shortcomings:”
Pharma has failed to implement a systematic and transparent tiered-pricing policy, where prices for all essential meds are set according to people’s ability to pay; Pharma continues largely to neglect R&D into diseases that predominantly affect poor people in developing countries; Pharma continues to be inflexible in protecting intellectual property, including challenging poor countries in court to stop them using legal public health safeguards, and Pharma continues to rely too heavily on donations to get affordable meds to people, even though this is unsustainable and sometimes counter-productive.
In response, the Association of the British Pharmaceutical Industry issuing a statement expressing disappointment that Oxfam “is continuing to frame the issue of access to medicines in terms of ‘the pharmaceutical industry is not doing enough’ – despite evidence of a vast and growing investment by companies in sustainable partnerships and initiatives.â€
The trade group charges Oxfam uses “subjective interpretation of data” and seems “strangely reluctant to acknowledge the scale of the industry’s involvement in developing world issues.†Oxfam, ABPI complains, continues to regard industry’s defense of patents as a cause of the affordability and pricing problem. However, the group argues, “the reality is that poor countries cannot afford any price, however cheap,†noting that India, “with the lowest prices for essential medicines in the world, still cannot provide them to two-thirds of its citizens.â€
Oxfam “should stop looking to criticize an industry that has done more than any other to help alleviate the health problems of the poorest nations on earth and look to work with us on these issues,†Richard Barker, who heads the ABPI, says in the statement, adding that “access to the right treatment is vital for many of the world’s poor, but this should be combined with addressing the causes of poverty.â€
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Cary
Oxfam states: “Pharma has failed to implement a systematic and transparent tiered-pricing policy, where prices for all essential meds are set according to people’s ability to pay; Pharma continues largely to neglect R&D into diseases that predominantly affect poor people in developing countries.â€
This is exactly the problem. How can we expect an industry that is making money hand over fist to police itself, to decide when enough is enough. Greed is human nature, and we should have a government that polices the actions of big pharma, that regulates the amount that big pharma gouges the consumer, that doesn’t allow pharmaceutical companies to manipulate loopholes in the patent system. That essentially, acts with the benefit of the consumer in mind.
In order to have a transparent policy, you can’t be hiding anything.
Brian
Clinical trials cost nearly 1 billion from start to finish. What industry has that kind of up front cost and regulations? How much free data are you entitled to? Who should pay the costs of drug discovery? What concessions would you be willing to make to reduce drug costs? How about more patent life or what kind of tort reform do you think you could concede to achieve your goal of cheap medications or how about protection from generics or a trade policy that requires wealthy nations to pay their fair share of discovery costs.. And please don’t tell me how the N.I.H. discovered all known drugs except one for malaria.
Bob Freeman
The billion dollar cost for developing a drug is a figure conjured by economists and appropriate for consideration in policy development but it vastly inflates the accounting costs of drug development. For Oxfam to have more influence in this debate it should recognize that the following needs to be done in developing countries: 1) fair and transparent regulatory approval processes including equal treatment of foreign and domestic firms; 2) elimination or reduction of tarrifs; 3) secure supply chains and 4) effective anti-corruption policies.
To the issue of incentives the reality is that this is a burden of developed countries to provide through international governmental cooperation. And, although it was summarily dismissed by PharmaLot’s readers, proposals such as Edwards’ (prizes for innovation), government patent buyouts and my own (with Lybecker) involving compensation at social value in exchange for marginal pricing.
I plant to spend more time with the Oxfam report and will comment further at a later point.
harry harrinordiquy
Oxfam is talking about patients as consumers - but realistically the rural poor in the developing world are never going to be purchasors of new patented drugs. The market companies will target are the 50m middle class in india with private insurance etc
That said - seeking to block all compulsory licences on drugs doesnt work as a policy for the industry - it generates terrible PR and experience in Africa since 2000 suggests the industry caves in as a result anyway. if the industry was more open with licences to local generics companies, like GSK with Aspen in RSA for ARVs, then they could show themselves to be part of the solution rather than the problem
Brian
Developed countries don’t currently pay their fair share of discovery costs for their own populations. Don’t expect them to help the third world. They control negotiations with pharmaceutical companies on pricing within their own borders and look the other way when counterfeits enter the system. The key is world wide patent reform and respect for intellectual property..