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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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« Intelligent Chemical Design | Main | The Voice of Experience »

May 24, 2005

You Figure It Out

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Posted by Derek

This is as much an economics post as a pharmaceutical one. I noticed this headline from, from a newspaper in Lusaka, Zambia: "Imported Pharmaceutical Products Hindering Growth." Curious, I read the whole piece, and I have to say that it makes my head hurt. Here, you judge: Says the head of Pharmanova Zambia, one of the country's only pharmceutical manufacturers,

"The government must reduce on imported products such as drugs. For example, if you import drugs from India, you are giving the Indian government access to growth of their economy and that does not benefit the Zambian economy at all," Dharkar said.

"What we want as manufacturers of pharmaceutical products is support from our government. We are capable of producing high quality drugs for the Zambian community."

Now, break that statement down. What Mr. Dharkar wants is "support" from his government - by which I assume he means high tariffs - so he can make all the money from the Zambian pharmaceutical market himself. This, as far as I can see, benefits his customers not one tiny bit, and it only benefits his employees until they need to buy some drugs themselves. And it's supposed to benefit the Zambian economy. . .how, exactly?

Look, this is not an intellectual property issue, and it's not an issue of recouping research costs (as it is in the US market.) We're not going to get our costs back from Zambia, a desperately poor country full of desperately poor people. As far as I can see, protecting this local factory will only cause these people to pay more for their medicines. And Mr. Dharkar agrees, but then he disagrees, right in the same paragraph:

Dharkar said most Zambian communities needed locally produced drugs, which he said would be more affordable than the imported drugs. He said his company was capable of producing antiretroviral drugs, although he observed that the high cost of producing the drugs would hinder their production in Zambia.

Now, if his drugs are more affordable, why isn't he wiping the imported stuff right out of the market by undercutting them? What's stopping him? And as for those antiretrovirals, which Zambia most definitely needs, if the cost of producing them locally is too high, then why not. . .import them from India? Aaargh.

Comments (2) + TrackBacks (0) | Category: Business and Markets


1. jeet on May 25, 2005 12:44 PM writes...

Looks like a pretty straightforward request for import quota to help protect/ expand the pharma industry within the country.

There are a lot of reasons why you wouldn't want to do this with therapeutics, especially for compounds not already made within the country, but this is pretty similar to import tariffs for steel (US), textiles (US), foodstuff (Japan), etc. that are used in most countries. Or, other tactics like export tarrifs (China), byzantine regulations (Japan), subsidies (US), voluntary export restrictions (Japan) can be used for the same net effect, that is giving domestic industry a leg up on the competition.

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2. Derek Lowe on May 25, 2005 1:20 PM writes...

Jeet, you're absolutely right about those comparisons, and I find all of them equally odious. What's done in the US with the likes of sugar, steel, and textiles is outrageous.

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