Drug patents are beside the point

This week Switzerland will become ground zero for the future of health policy in Africa. The World Health Organisation’s (WHO) intergovernmental working group is meeting in Geneva to discuss public health, medical innovation and intellectual property.

Many participants are expected to express their support for efforts to undermine patent protections for drugs.
In doing so, however, these attendees ignore the more fundamental problem facing poor African nations—dilapidated healthcare infrastructure.

The anti-patent crowd believes that patents keep prices high and drugs out of the reach of the poor. It blames pharmaceutical firms for the suffering of the impoverished and calls on developing nations to employ patent-revoking compulsory licences that encourage the production of cheaper generics.

But even if medicine were available for free, as it often is in poor nations, dysfunctional institutions and personnel ensure that the needy can’t access it.

Despite unprecedented quantities of monetary aid to the ministries of health of many African countries, health systems on the continent have languished. Between 1990 and 2005 development assistance for health increased from $2,5-billion to more than $13-billion. Overall about 10% of Africa’s healthcare expenditure is financed by donor aid.

And yet more than 50% of Africans lack access to essential medicines, according to the WHO. Around the world more than 10-million children in developing countries die unnecessarily from diseases that are easily preventable and cheap to treat, such as diarrhoea, measles and malaria. Furthermore, up to 80% of Africans have to pay for treatment from their own pockets. In short, public health systems are failing to deliver.

Why? For starters nearly all ­foreign aid must first pass through health ministries before reaching patients. According to studies undertaken by the WHO and the Centre for Global Development, donor nations rarely know what happens to their money after they hand it over to a recipient government - it is routinely subverted by health officials for private gain.

There is leakage of drugs from the supply chain. Publicly funded drugs can fetch a higher price if resold on the black market. Recent surveys in Nigeria show that 28 public health centres received no drugs from the federal government for two years and a 2001 World Bank study showed that fewer than half of government health facilities in the Nigerian states of Lagos and Kogi received any drugs at all.

Last year Dora Akunyili, the Director General of Nigeria’s National Agency for Food and Drug Administration and Control, disclosed that it was commonplace for donated drugs, such as vitamin A capsules, Mectizan and Coartem tablets and oral rehydration salt, to be pilfered and resold on the open market.

With incidents like these in mind, the Global Fund has considered suspending two grants totalling $80-million to Nigeria. The fund has already terminated grants to Uganda and Chad.

But theft is not the only problem. Countless other forms of corruption plague Nigeria’s health system, including mismanagement of funds at the local level; employee absenteeism; extortion of patients by staff; and the abuse of procurement contracts for hospital supplies.

According to Human Rights Watch, “the government’s failure to tackle local-level corruption violates Nigeria’s obligation to provide basic health and education services to its citizens”.

Compulsory licences will do nothing to solve these critical issues. And they would unleash a host of new problems concerning access and safety.

Last year in Thailand, for example, the government used compulsory licences to grant the state-run Government Pharmaceutical Organisation (GPO) the right to manufacture generic versions of Aids and heart-disease medications. Many activists applauded the move, even as Thai leaders turned down the Global Fund’s offers of free medicine.

Unfortunately, domestic production has proved too expensive and access to needed medicines has decreased substantially for sick Thais.

Further, the GPO has a history of producing shoddy products. Its substandard antiretroviral GPO-Vir actually accelerated resistance of HIV to treatment, consigning scores to early death. Yet Thailand’s patent theft continues. Last month the nation announced that it would rescind the patents on four cancer drugs.

As long as healthcare delivery remains in the hands of dysfunctional governments, the health of the poor in developing nations will not improve. Aid groups and policymakers must instead enlist the help and expertise of the private sector. The advantages of this are two-fold.

First, it would reduce corruption, which certainly exists in the private sector as well, but private enterprises with ethical problems risk exclusion from the next round of programmes and contracts.

Second, competition governs the private sector. Firms that fail or receive low marks from customers or aid organisations will lose out to competitors. Market participants are forced to improve productivity and patient care or face extinction.

In the public sector, by contrast, organisations or governments proved to be inefficient tend to get more money—even as they’ve demonstrated themselves incapable of doing the job.

According to the International Finance Corporation, 60% of the $16,7-billion spent on health in Africa in 2005 was privately financed, with half of it spent in the private sector. It is time to ­harness this vast sum so it can work for patients.

Rather than encourage the wilful destruction of drug patents, conference attendees ought to call for measures that would improve the health of those in poor nations, such as increased investment in infrastructure. To do otherwise would hurt those who most need help.

Thompson Ayodele is the executive director of the Initiative for Public Policy Analysis, a Lagos-based think tank. Visit www.ippanigeria.org

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