Same rules apply to the production of drugs as to any other

Two excellent articles on AfricanLiberty.org deal with the problem of drug production, the difficulties countries that need those drugs face and the prevalence of fake drugs in African and some South-East Asian countries. The conclusion is that, pace the activists and transnational regulators, lawyers and politicians, the same rules of economic development apply to the production and distribution of drugs as to any other produce. Sentimental ignorance kills many thousands of people unnecessarily every year.

In "Drug-induced dreams" Franklin Cudjoe, Director of Imani, looks at the insistent demands that African countries should produce drugs locally. He does not think it is the answer or not the whole answer:

Local production of medicines is not a bad thing in itself: there are many excellent African companies producing high quality medicines. The problems start when politicians intervene by pouring public money into new factories and into propping up businesses which would otherwise go bust. Quality is usually the
first victim.

He discusses the various reasons why African countries cannot manufacture all their own medicines at the moment and points out that harmful effect government legislation and high tariffs have had on the industry and on health care in many countries. These are introduced by governments whose members then travel round the world demanding subsidized local drug production.

Subsidised drug production is not only risky but is rarely cheaper than importing. A study by the US National Academies of Science showed that producing antimalarial drugs from start to finish in Nigeria would cost 15% more than simply importing them directly. The German aid agency GTZ says drugs produced locally in Ghana are often more expensive than imports from India,China, or Europe.

Such insights are not surprising: with globalisation demonstrating all the time that the production of certain goods is more suited to certain areas. This is why the Swedish don’t bother to grow grapefruit but do produce cars.

So why does this political support for state-financed local production continue? It is economically illiterate and endangers the health of Africans but it appeals greatly to activists and to vested political and business interests.

Any government that does really care about the health of its people must first drop the tariffs and taxes that hamper local production and that deter imports: unlike some doomed Five-Year Plan, it's an immediate boost to all patients, especially the poor.

And there you have it. An economically illiterate and dangerous policy that, quite literally, kills people is promoted by vested interests. All too often those business interests happen to be government political interests as well.

The other article is about counterfeit drugs, a terrible and dangerous blight in many poor countries, and often the outcome of inappropriate transnational campaigns. There is a link to a new report, produced by the International Policy Network, called "Keeping it Real".

It starts with a horrific statistic: counterfeit drugs kill over 700,000 people every year. Remember those scenes in "The Third Man" when the writer Holly Martin is shown what damage resulted from the counterfeit penicillin that his friend, Harry Lime, helped to distibute? Well, multiply that by many thousands every year.

The most fundamental cause of the spread of fake drugs in less developed countries has been the inability of manufacturers to protect the identity of their products. This is largely down to a lack of functioning rule of law, which makes it very difficult for manufacturers to protect their trademarks and brands – thereby handing a free rein to counterfeiters. In this context, the stiffer criminal penalties called for by WHO and other bodies may actually entrench the corrupt symbiotic relationship between counterfeiters, lawmakers and officials.

The suggestions the paper makes sound good but who exactly is going to put them into effect is unclear:

1. Strengthening local institutions, in particular the rule of law
2. Governments intervening less in the pharmaceutical market
3. Better use of technologies for identity preservation

Substitute almost any word for pharmaceutical and you would solve many of the problems of developing countries. Instead we keep giving aid, that keeps governments who benefit from there not being a rule of law, in power.