Fri, Nov 17, 2006 - Page 9 News List

Drugs price debate needs a dose of reality

With many countries in desperate need of increased access to medicines, the patent fixation is obscuring bigger obstacles

By Philip Stevens

Oxfam claimed this week that the high cost of medicines is caused by tough intellectual property rules and that this is why most people in the poorest countries have no access to drugs. The facts are wrong and divert attention from the bigger truth: In most countries there simply aren't enough nurses, doctors and clinics to administer to the sick.

It is not surprising, however, that the price of medicines should become the focus of debate. After all, who wants to hand over large sums of hard-earned cash to pay for expensive drugs when, in theory, they only cost a few cents to make in a factory? Surely by weakening patents the government would reduce drug prices, thereby increasing access to medicines for all?

Taken at face value, the answer would seem to be yes. But look a little deeper and you will find that intellectual property and the price of medicines is largely irrelevant in the face of the other major factors that affect a nation's health.

Take the example of India. Since 1975, it has weakened intellectual property laws in the belief that it would drive down the price of medicines. It certainly did that for some drugs, but did it make the Indian people any healthier?

The answer is no.

Access to even basic medicines in India remains unacceptably low. Children go without routine vaccinations. Simple off-patent anti-infectives are out of reach of the majority of the rural poor. Despite pumping out cheap generic AIDS drugs for years, a paltry 12,000 of India's 5 million AIDS sufferers were receiving the drugs at the end of last year.

For the Indian poor, the price of drugs is not the issue. The real issue is the state of their healthcare infrastructure.

The government-run system is a shambles, riddled with inefficiency and corruption and beset by a lack of resources. The transport network is so bad that rural people struggle to get to a clinic, even if one exists within 1,500km of their home. Meanwhile, dirty water and cooking fuels exact a terrible toll of disease on the poor.

So, when the Indian government decided last year to strengthen its intellectual property laws in order to accelerate India's economic development, it was able to do so because the people did not see a connection between arcane patent laws and the reality of their lives.

What they want are hospitals, clinics, doctors and nurses. Without these things, you can give drugs away for free and they still won't get to the most needy.

The Indian voters understood this -- and the prices of medicines have not shot up, despite activists' forecasts.

There are similarities with many other countries. In the Philippines, 40 percent of people will never see a doctor in their entire lives. Clinics and hospitals are rare. PhilHealth, the government-run social insurance scheme, provides very basic cover for only around half of the population.

The exodus of healthcare workers to better opportunities overseas has reached such high levels that last year the Filipino Alliance of Healthcare Workers warned that the healthcare system faces "imminent collapse."

This is compounded by counterproductive policies. Last year, the Philippines increased VAT on medicines from 10 to 12 percent and -- incredibly -- made previously exempt things like doctors' fees subject to VAT. This amounts to little more than a tax on the sick and dying.

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