Inter Press Service - September 20, 2001
Marwaan Macan-Markar

Learning from India's experience, governments and health experts should encourage local initiatives to shake the monopoly the pharmaceutical giants have on technology, said Dr Dilip Shah, secretary general of the Indian Pharmaceutical Alliance (IPA) that represents the 11 research- based drug producers in India.

The concentration of drug-producing technology in the hands of a few pharmaceutical multinationals harms Asia's poor and sick, Shah said in an interview. "People cannot die for want of medicine. No civil society will accept it."

"Local initiatives, using local technology and talent, is a potent antidote," he emphasised at a seminar in this city north-east of Bangkok, held by South and East Asian activists on ways to challenge multinational companies' hold on technology.

"Health is a right for all, not just for those who can afford to buy brand-name drugs," said Shalmali Guttal, of Focus on the Global South, a Bangkok-based non-government organisation.

"The major pharmaceutical companies enjoy too much power through the controls they have on technology. Asian governments should challenge that, and one way is decentralising technology, encouraging local production of drugs, like in India," she added.

"Developing countries need to have power to define their health policies and health needs. Placing faith in domestic technology will go far in securing such power," Guttal pointed out.

India's achievement over the past 30 years bolsters this argument. Prior to 1970, close to 75 percent of the drugs available in that South Asian nation was produced by the pharmaceutical multinationals, with some of the drugs being "sold at prices higher than in the United States", according to Shah.

But pressure from India's local pharmaceutical industrialists forced the government to challenge that order, beginning with the passage of the 1970 patent act.

That law enabled the local production of generic drugs that use home-grown technology, giving more accessible medication that is the same as branded drugs produced by big drug companies.

By the year 2000, some 70 percent of the drugs available in India were being produced locally, and at prices far lower than what the multinational firms demand for the same drug.

"We offer them at prices far cheaper than what the Western companies do," stressed Shah. He cited as an example anti-AIDS drugs offered early this year by an Indian drugs manufacturer that were priced lower than what the pharmaceutical giants were charging for then same drugs.

In that instance, Cipla, a Bombay-based Indian manufacturer, priced their cocktail of HIV drugs at 350 U.S. dollars for a year. Multinational drug firms offered the same drugs cocktail at 12,000 dollars for a year.

Multinational firms say the cost of drugs includes the cost of research and development into diseases, which has to continue if new medical breakthroughs are to happen. Critics however say that the bulk of costs goes into marketing, which pushes up the price of medicines beyond the reach of ordinary people.

But India's drug manufacturing system faces a threat from world trade rules set to be imposed soon, a threat that critics worry will undercut one of the country's strongest pro-poor policies. Indian drug makers also export cheaper medicines to several developing countries.

But Indian pharmaceuticals are confident of triumphing over multinational competitors even after 2005, when more than 140 countries are required to fall in line with the new global trade rules spelled out by the World Trade Organisation (WTO).

Under the WTO's Trade-related Intellectual Property Rights (TRIPS), all countries are supposed to be TRIPS-compliant by that year. That means governments should have laws respecting the patent rights of goods produced from that year onwards -- and thus no generic drugs can be produced, as India has been doing under the current system. Each patent will be valid for 20 years. Meantime, "Indian companies are strengthening their local technology base for research and development of new drugs," said Shah. "Our cost of research to develop a new drug will be a tenth of what the Western pharmaceuticals estimate.

They say it costs 500 to 700 million dollars to bring a new drug into the market. The same work can be done in India for 10 to 50 million dollars." This track record has impressed the nascent pharmaceutical industry in neighbouring Pakistan. Last month, representatives of Pakistan's Pharmaceutical Manufacturers Association put aside tensions between their country and India to seek help from IPA to strengthen Pakistan's domestic production of drugs.

The plans under discussion to transfer technology from India's pharmaceutical base to Pakistan to bulk-produce generic drugs could lead to a transfer of knowledge, in addition to machinery and plant equipment.

Developing countries should also learn to develop and rely on their own technology because the research and development done by the pharmaceutical giants often puts less emphasis on drugs for diseases that afflict people in the developing world, activists say.

This impacts on quality of life of people and human development because more than half of the world's population live in the developing world. More than three billion people live in Asia.

"The industry's neglect of the ill is well documented. Of the 70 billion dollars expended globally on health research in 1998, barely 100 million dollars was devoted to anti-malaria research," stated a background paper by the Canadian-based Action Group on Erosion, Technology and Concentration (ETC group).

"Of the 1,223 drugs brought to the market between 1975 and 1996, only 13 targeted tropical diseases and just four of these came from the private sector," according to the paper, 'The New Genomics Agenda'.

"We should not accept the current rules of the world trade game, because it benefits corporate culture," said Guttal. "Pharmaceutical companies have used the technology to their advantage, which is often profit-driven."

To counter this, Guttal said: "Local initiatives should be encouraged. The Indian achievement is a good example in the struggle for pro- poor health policies."

Shah also says the new global trade rules to come into effect in 2005 will not permit countries to emulate all of India's achievement -- particularly producing generic drugs that are still under patent. "But they can set up local industry to produce drugs which have no patent, where the date has expired."

A test case of how trade rules can conflict with public health needs was the suit brought by pharmaceutical companies against South African legislation that allows the government to import cheaper anti-AIDS drugs. Amid popular outrage and a backlash, the firm retracted the suit in April, on the day court hearings had been due to start.

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