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Nigeria Pharmaceutical Industry
The
Need For Local Entrepreneurial leadership
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Cletus Olebune
courtesy of nel-mag.org
Historically, the desire to protect colonial interests and needs, such as the health of settlers and soldiers, typically drove medical research of tropical diseases.
Modern science has been able to research and develop cures for most illnesses and diseases, yet, politics and corporate greed affect who can benefit from this, resulting in what a French newspaper article, Le Monde, describes as apartheid of pharmacology.
In addition, the following highlights some additional driving factors: Multinational pharmaceutical companies neglect the diseases of the tropics, not because the science is impossible but because there is, in the cold economics of the drugs companies, no market.
In the West, and the US especially, we see many adverts by large transnational pharmaceutical companies such as GlaxoSmithKline, Bristol-Myers Squibb, Merck, Pfizer and many others. We see a lot of emphasis on health alerts or sections on the news. However, as is becoming increasingly apparent and of concern is how the emphasis on the new drugs and cures being developed fit a class distinction, where the research is on problems that affect the wealthier people and those who can afford the cures.
There is, of course, a market in developing countries in the sense that there is a need: millions of people die from preventable or curable diseases every week. But there is no market in the sense that, unlike Viagra, medicines for leishmaniasis are needed by poor people in poor countries. Pharmaceutical companies judge that they would not get sufficient return on research investment, so why, they ask, should we bother? Their obligation to shareholders, they say, demands that they put the effort into trying to find cures for the diseases of affluence and longevity—heart disease, cancer, Alzheimer’s. Of the thousands of new compounds drug companies have brought to the market in recent years, fewer than 1% are for tropical diseases.
“In the corporate headquarters of major drug companies, the public relations posters display the image they like to present: of caring companies that bring benefit to humanity, relieving the suffering of the sick. What they don’t say, is that, so far, their humanity has not extended beyond the limits of the pockets of the sick.”— Isabel Hilton, A Bitter Pill For The World’s Poor, the Guardian, January 5, 2000
“[M]any people, most of them in tropical countries of the Third World, die of preventable, curable diseases.… Malaria, tuberculosis, acute lower-respiratory infections—in 1998, these claimed 6.1 million lives. People died because the drugs to treat those illnesses are nonexistent or are no longer effective. They died because it doesn’t pay to keep them alive. — Ken Silverstein, Millions for Viagra, Pennies for Diseases of the Poor, The Nation, July 19, 1999
Emphasis is more on profitable research and cures for problems, such as impotence, baldness, aging, while many tropical diseases are given far less attention.
As one example, reported by the U.K’s Guardian newspaper, a pharmaceutical company, Aventis, used to produce the only safe medicine for the late, fatal, stage of sleeping sickness. However, they stopped making it in 1995 because they couldn’t make any profit from it. In 2000, Bristol Myers Squibb, used the drug for profitable purposes in the west—as an ingredient in hair-removing cream, under license from Aventis. Corporate priorities of profits can imply that the most appropriate treatments won’t always apply (especially when they are cheap).
But why should the Western Pharmaceutical Industry care about the problems of Developing Countries?
Some may argue that it should be up to those nations affected by such problems to invest in appropriate research, that the private corporations cannot be expected to solve all of the world’s problems and that it is unfair to point to such companies and criticize them as they would also go broke from such activities. However, the western nations that the corporations are based in have, through colonialism, and post-war global economics, fostered an environment that have led to further poverty and dependency of the poorer nations on the first world countries. Post war policies from the IMF and World Bank have forced most developing countries to cut back on such social expenditure as health and education, in the first place. Most countries are in a downward spiral due to their policies.
Medical and pharmaceutical companies often tout their strengths of having vast capital resources to do research, bringing benefits to humanity the world over. Unfortunately though, the quest for ever more profits are a hindering factor to what they will research. Tropical disease cures are not profitable for them because most people with such diseases are too poor to afford cures. Of course, as well as addressing the excessive quest for profits, poverty should be addressed too. Yet, poverty is also impacted severely when international trade rules and institutions are influenced by power politics as they so often are.
“There was a time not long ago when the corporate giants that PhRMA (Pharmaceutical Research and manufacturers of America) represents were merely the size of nations. Now, after a frenzied two-year period of pharmaceutical mega-mergers, they are behemoths which outweigh entire continents. The combined worth of the world’s top five drug companies is twice the combined GDP of all sub-Saharan Africa and their influence on the rules of world trade is many times stronger because they can bring their wealth to bear directly on the levers of western power.” — Julian Borger, Industry that stalks the US corridors of power, the Guardian, February 13 2001.
Pharmaceutical companies make enormous profits that would probably not affect the ability to do some research and production of other more urgent medical problems.
When nations and companies actually do try to develop cures and possibilities, these same pharmaceutical companies will often complain about unfair trade practices! This can be seen in sharp detail in the AIDS crisis, where such companies lobbied the US government to threaten sanctions on South Africa just for trying to do something that the pharmaceutical companies would not do—help its people.
“Of diseases in the Third World, AIDS is getting the most attention and focus. Not coincidentally, it is also one of the few diseases that remain a threat to First World countries.” — Pharmaceutical companies but profits before needs, Censored 2000, P. 32
The large corporations from developed countries are patenting so many resources from developing countries that it makes it difficult for those nations to be able to produce medicines for themselves. The World Trade Organization’s TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) makes it difficult for other countries to produce medicines if the product is already patented. There are some provisions in the TRIPS agreement, but that is only when there is an emergency and the products are not used for commercial use (and even this clause is under attack from the US and pharmaceutical companies.) The World Trade Organization regime insists instead on product patents, so you can’t figure out a smarter process. Notice that impedes growth, and development and is intended to. It’s intended to cut back innovation, growth, and development and to maintain extremely high profits.
It is also an example of inequality being structured into law. The most glaring conflict between rich and poor over IP comes from the misappropriation of “traditional knowledge” — such as ancient herbal remedies that find their way into high-priced western pharmaceuticals without the consent of, or compensation to, the people who have used them for generations. Often, patent examiners are simply unaware that the plant variety which an enterprising businessperson is trying to patent has been used for centuries by a tribal community half a world away.
It is ironic that the developed countries should argue that new system of IPR protection are needed for traditional knowledge, because its involves communal ownership, uncertain date of creation and unwritten form does not fit the requirements of western system of IPR; but does the western system of IPR fits for the rest of the world. India has taken leadership in creating a database to catalogue such traditional knowledge. Consulting such databases should be made a mandatory part of patent examinations world over. This is what China is doing with the natural product Artemisinin, an herb very effective in the treatment of malaria.
“[I]nternational intellectual property laws, which protect the patents and the bottom lines of pharmaceutical companies … encourage them to continue investing the millions in research required to develop new medicines. Western countries, led by the United States, have fought strenuously on the international front to protect those patents—in effect, placing a greater value on intellectual property, in the name of spurring innovation and saving more lives in the future, than on saving lives currently at risk.” — Daryl Lindsey, The AIDS-drug warrior: Jamie Love, Salon.com magazine, June 1, 2001
“Meanwhile, the death toll mounts. And those who believe in compulsory licensing, or weaker intellectual property laws for drugs in developing countries, like to cite the case of Jonas Salk, the inventor of the polio vaccine. As the ancient scourge of polio was rolled back by his vaccine 50 years ago, Salk was asked why he never took a patent out on the medicine—a patent that would have made him wildly rich. “There is no patent,” he replied. “Could you patent the sun?” — Daryl Lindsey, The AIDS-drug warrior: Jamie Love, Salon.com magazine, June 1, 2001
There is room, thanks to efforts by developing countries and others, in the WTO rules for some ability for governments to incorporate provisions in national patent laws to ensure and increase access to essential drugs, using mechanisms such as compulsory licensing and parallel imports.
Some of the larger developing countries, such as Thailand, India, Brazil, Egypt and some others, have tried to do something about the dual problems of high pricing and corporate/Western pressure:
· Some, like Brazil, have tried to develop cheaper, more generic drugs
· Others, such as South Africa, who may have tried this before, have also tried to purchase cheaper generic drugs or import them from where it is sold the cheapest. This works out well between developing countries.
These attempts are important because they recognize the need to reduce dependency upon large multinational corporations which charge high prices. It also shows a sign that these governments are attempting to meet their obligations to their own people.
In fact, the pharmaceutical corporations and the United States challenged Brazil, South Africa and other’s attempts by claiming that they were breaching the above-mentioned TRIPS. The fear has been that if a few developing countries succeed in this sort of independent path, then other developing countries will follow suit, and this will threaten “their” markets.
India’s successful pharmaceutical industry, built on its patent laws that allow the development of very cheap generic drugs has been under threat from WTO property rights rules on patent protection, and pressure from the large pharmaceutical companies.
The additional fear is also based on how if companies from developing countries are able to make inroads on profits on products that are not actually sold much by the large multinational pharmaceuticals, then for other products that generate more sales and profits, companies from developing countries could pose a real threat to their bottom line. Furthermore, if other companies are able to offer similar drugs for much lower prices, it indicates potentially how much the public of the industrialized world are being over-charged.
In June 2001 the United States dropped its WTO complaint against Brazil for the production of generic AIDS medications. However, it was at a potentially enormous cost to Brazil and other developing countries; While following even some “unfair” rules in the WTO TRIPS agreement, the U.S. agreed to drop its case as long as Brazil tells U.S. State Department 10 days in advance of any generic drugs being developed, allowing the U.S. in effect to monitor Brazil’s public health policies in these areas. Other countries might think twice about doing what Brazil and some others have tried—legally—to do here, as the fear of U.S. pressure might be persuasive enough.
Just a couple of months later, Brazil made a bold, but important move to produce AIDS drugs themselves, but at the same time, breaking the patent rights of Swiss pharmaceutical company, Roche. The Brazilian currency, the real, has become weaker with its devaluation, which therefore makes the costs of imports even more expensive. This is important because it highlights the importance of self-dependency—especially on things like health. If such emergencies are left solely to the whims of the market, then there isn’t a guarantee that all will be done.
The Doha WTO round in November 2001, while controversial in some aspects, included some provisions to make access to affordable medicines easier. However,
· All the other 140 countries of the WTO unsuccessfully opposed United States desire to block access for poor countries.
· Since the Doha Agreement, America’s drug industry has fought tooth and nail to impose the narrowest possible interpretation of the Doha declaration, and wants to restrict the deal to drugs to combat HIV/Aids, malaria, TB and a shortlist of other diseases unique to Africa rather than all developing countries, as originally agreed. (The U.S. was part of that agreement process as well.)
· The repeated concern has been that copy-cat drugs will under price and override patents, and research will dry up.
Why the Nigeria Pharmaceutical Industry should take bold steps in making needed medicines?
The Nigerian Pharmaceutical Industry should take bold steps in making locally those medicines needed by its citizens. Early in 2005 India, a major exporter of pharmaceutical products to Nigeria, passed a patent law protection legislation that will make India fully in compliance. This means that Indian manufacturers that dominate the Nigerian market will this month, January 1, 2006 fully comply with the International Intellectual Property Rights that will prevent them from copying drugs that are not off patent yet. Hence, they will loss the ability to make and distribute patented drugs in Nigeria, and other African countries. While in a short time; this may cause lack of needed low cost generic drugs, it will encourage indigenous drug makers to take bold strategic steps in local drug production and in effect spur the growth of the industry in Nigeria.
It is entirely reasonable for the world’s poorest countries to have argued that they need until 2016, at least, to adopt and enforce patents on pharmaceuticals. This stay of execution should, indeed, be extended to all forms of intellectual property. The 2016 execution date is also very unrealistic; carefully worked-out policies for protecting intellectual property will not solve developing countries’ bigger problems, such as inadequate health care, lousy schools and sheer poverty. But if they are adapted to fit individual countries’ circumstances, they can play a helpful role in nurturing the domestic industries that lasting growth requires. Today, however, developing countries do not have the luxury to take their time over IP. As part of a trade deal, countries joining the World Trade Organization, also must sign up to TRIPS. This is not right for Nigeria and other developing countries. Some developing countries, such as India and China, whose industrial-scale copying of other people’s products, are sufficiently advanced to support the sort of innovation that would benefit from the standard international IP.
For the local Nigeria manufacturers not to be left wanting in the necessary talent and skill sets, the government should invest in basic life science education to support the growth of the drug industry and other manufacturing industries. There is a need to refocus science and technology education for the training of the behind the scene work force in manufacturing economy. The behind the scene work force are the technicians and technologists. This work force is what sustained the economic growth of Japan, China, and India. Since every Nigerian can not possibly acquire professional titles through years in college, the training of the critical work force in manufacturing should be supported through a two year industry focused training education. With India in full compliance this month, the Nigerian market may be left to the Pakistanis, if the local manufacturers do not take leadership in making available needed drugs or are not supported. Not only that, this educational strategy will prepare the country for the 2016 execution date, unless it will join forces with other poor countries to successfully argue for extension or no time frame.
According to Syed M. Aslam, “In 2001-02, the top five destinations of pharma exports were Nigeria, Sri Lanka, Singapore, UK and Dubai. These five countries, part of over 7 dozen others, collectively contributed $ 21.6 million or 53 per cent to the total exports last year. What has made the emergence of Africa region, led by Nigeria, significant is that Pakistani pharmaceutical products have been able to make inroads into the most populated markets in the African continent.
Successful penetration of the Nigerian market is a welcome sign indeed for a number of reasons: It is the most populated country in Africa with a GNP of around $ 38 billion and most important of all, its health care spending is around $ 9 per person. Pharmaceutical manufacturing in Nigeria is limited to few multinational companies and it has to import drugs from other countries to meet the local demand.
Making inroads into Nigeria is also important from another perspectives. According to Mr. Batla, Nigeria offers two distinct benefits. Number one, it is an established trading hub for West Africa, particularly the pharmaceuticals to serve as a distribution point for the region. Number two, it itself is the biggest and the most populated country in Africa as mentioned earlier. The opening up of the Nigerian market, irrespective of the problems as we will highlight later, is a significant development indeed.
"This is because African continent offers an immense potential for pharma exports, particularly pharma manufacturing has still to take roots there and countries in the region are dependent on imports to bridge the ever widening gap between the supply and demand. True, that a beginning has been made but Negerian-led African market offers challenges unique to its own.
"Despite low consciousness about health mainly due to poverty, low local manufacturing, limited buying power and presence of expensive multinationals' products (like Pakistan MNCs are also comparatively expensive elsewhere) consumers of pharmaceuticals in Nigeria and the region are reluctant to comprise on quality. By and large they seem to prefer to compromise on price rather than on quality. That explains why Pakistan has been able to successfully make inroads into Nigeria despite stiff competition from India, which has been there all along, as well as from China, whose pharma products are comparatively cheaper than Pakistani counterparts. Pakistani products have also been able to make inroads in other similar markets."
REGISTRATION
Nigeria, the top market of Pakistan pharma products, serves as an ideal case to highlight the problems with other markets in Africa as well as many other markets in the developing world. According to Mr. Shamsi, Nigeria and for that matter other markets in the Africa region, is highly unregulated. "Around 80 per cent of pharma imports into the country comprise products which are finding their way into the country through illegal or extra-legal means including connivance with the customs authorities. The market is so unregulated that even drugs not registered in the country are easily finding their way into Nigeria. However, the government has announced to regulate the pharma trade much more strictly including registration of drugs by the Nigerian Ministry of Health. The measure aimed at better regulating the pharma trade in Nigeria, however, means a number of challenges for the Pakistani exports.
"The drug registration fee in Nigeria is one of the most expensive in the region to further discourage an already export-shy national-companies'-lead pharma industry of Pakistan by pushing the initial investment costs and already lengthy and exhaustive registration costs in a country not known for good business practices."
NIGERIAN MARKET: A CASE STUDY
Just how discouragingly high the registration fee is in Nigeria? It is $ 2,200 per product for prescribed drugs and $ 10,000 per product for Over-The-Counter (OTC) drugs. "A separately registration is required for each variation of a drug be it a tablet, capsule, syrup and injection as well as all variable dosages of a same tablet be it 50 mg, 100 mg or any other variation thereof."
Despite the immense potential that Nigeria offers to Pakistani pharmaceutical industry as the major distribution point into West Africa, there are many problems that are shying away local traders. The biggest problem is the lack of trust on the part of Pakistani exporters and traders due primarily to the absence of good business practices necessary to conduct mutually beneficial business. "There are cases where Pakistani exporters lost monies when bank drafts turned out be fakes," said Mr. Batla.
Another major problem is that Nigeria still much remains an extremely unregulated market. According to Mr. Shamsi 80 per cent of the Nigerian pharma market is flooded with drugs finding their way into the country illegally. "This includes drugs not registered into the country by the unscrupulous elements having connection in the right circles. The rampant unethical business practices surrounding all areas of pharma market in Nigeria is discouraging many potential exporters to take risks.” — Syed M. Aslam Apr 07 - 13, 2003, Pakistaneconomist
NOTE: NEL acknowledges the work National Agency for Food and Drug Administration and Control (NAFDAC) has been doing.
January 2006, Nel-m.org.
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ABOUT
THE AUTHOR: Cletus E. Olebunne, Is the Executive Director of Nigerian Entrepreneurial Leadership (www.nel-m.org ) An accomplished scientist, and entrepreneur in the global healthcare product distribution. He is the founder of Eastern Pharmaceuticals (www.easternpharmaceuticals.com), a global distributor of healthcare products based in New Jersey. An active member of Regulatory Affairs Professional Society (RAPS), the global pharmaceutical regulatory body, the American Chemical Society, and the American Management Association
(AMA). He focuses on Entrepreneurship – general management and organizational development
The NEL organization seeks to:
1 Support and promote a community of entrepreneurs
2 Promote public understanding of manufacturing entrepreneurship
3 Promote and enhance the role models that reflect the ideals of manufacturing entrepreneurship
4 Be the source for information about best practices in business leadership.
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