Thursday, June 17, 2010

Fake Aid to be Cut: Recipients May Benefit

It isn't often that government departments admit that they got something wrong but it's no less welcome when they do. The two Kenyan departments responsible for health (two because of the power sharing government) agree that they were wrong to pass the anti-counterfeiting bill in a form that failed to distinguish between counterfeit and fake. They accept that this could lead to people being unable to purchase affordable versions of vital drugs, including HIV drugs. India was particularly worried as they supply most of the generic drugs that Kenya and other African countries purchase.

The Kenyan health departments claim that the law in question was pushed by the Ministry for Industry, who didn't realise the implications of the wording of the law. Both these claims sound suspect and the whole issue of a bill which was so stacked in favour of the pharmaceutical industry and against the generic drug industry smelled of industry lobbying and arm twisting. And in practice, even without this law, enormous amounts of money are spent on non-generic, branded products, despite the availability of generics that cost a fraction of the brand price.

Most money spent on health in Sub-Saharan African countries comes from donors. This is one of the reasons that unnecessary amounts of money are spent on overpriced branded drugs. African countries certainly couldn't have afforded them. Some even suspect that a lot of foreign donor money is specifically made available for branded drugs in order to destroy the generic market. After all, branding, intellectual property, is a particularly egregious form of market protection. And there are few who like to protect their markets more than the pharmaceutical industry, regardless of how many people suffer or die from treatable and preventable illnesses as a result.

But this is not the end of the matter. The European Union, that bastion of free market talk and protectionist action, wants India to sign up to a 'Free Trade' Agreement which will effectively restrict the country's ability to produce generics and sell them to poor countries. Médecins Sans Frontières (MSF) is campaigning against this appalling threat to the health and lives of so many people, but most international health institutions are remaining silent.

Many other African countries followed Kenya's unwise decision to pass intellectual property law that only benefited pharmaceutical multinationals, so maybe some of them will reconsider this now. Perhaps they will also get behind MSF and any other organisations involved in campaigning for fair economic conditions for developing countries. Tanzania and others are wondering how they will fare now that so much donor funding has been cut, with the global economic crisis being used as an excuse. They will do a lot better when they exercise their right to purchase generic drugs, rather than wasting the ample HIV funding on extortionately priced brands.

Multinationals and other pushers are constantly bleating about how people in developing are suffering and all rich country governments need to do is pay for their products for things to be ok. But there just isn't enough money to buy branded products, nor is there any necessity to do so. Much of the current HIV transmission in developing countries is preventable, especially transmission from mother to child. But despite the relevant drugs being available for many years, an estimated 43,000 babies were infected by their mothers in Tanzania in 2008 alone. Of the 217,704 new infections, many more would have been the result of lack of proper equipment for ensuring proper levels of medical safety. Tanzania need to find affordable drugs and medical equipment so that they can get by with less money.

The issue of intellectual property protectionism goes far beyond essential drugs and medications. Most household product markets in Kenya and other African countries are dominated by one single brand or a handful of brands, for example, soap, sanitary pads, diapers, cleaning materials, etc. These brands are unnecessarily expensive but one disinfectant soap manufacturer even claims that using their soap makes you and your children 100% healthier. Such claims, leading people to believe that they are harming their families if they don't use these products, are widely advertised. That is where much of the money made by multinationals is spent; it's spent on marketing and advertising, not on research, as they would like us to believe.

Let multinationals do their own dirty work, they should not be entitled to donor money that is supposed to be spent on needy people. If these organisations are bothered by competition from generics, let them put their prices down and learn how to compete, for a change. They love talking about competition but they usually operate in completely protected environments. And if they think those producing fakes are worth fighting, they could just lower their prices enough so that it is no longer worth while producing fakes. Fakes are only economic when the cost of making the goods is low but the price charged is high. Multinationals should start abiding by some of the principles they seem to think are so important. They have priced themselves out of the market that they have worked so hard to rig in their favour.

Countries like Kenya and Tanzania are right to be worried about reduced funding but there are two things that may work in their favour. Firstly, if they are less dependent on donor funding, they may be better able to shop around for affordable drugs and other vital goods. At present, donors usually decide which drugs and goods to purchase and they favour their own markets. That's what being a donor is all about, isn't it! Secondly, they may find ways of achieving even more with less money once they are freed of all the restrictions that foreign loans and donations often carry. This is not an argument for reducing funding, which I think should be increased. But it is an argument for funding to become more transparent, more democratic, more like genuine funding than merely a tool for benefiting the donor far more than the recipient, as it appears now.


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