Bitter Pill: Big Pharma and the BRICS Countries

Posted in: Access to Health, BRICS

Blog post by  Oleg Kucheryavenko | Coordinator for Health Policy and Advocacy, Oxfam GB / Global Call to Action against Poverty.

This article was originally posted at

Recently, there have been shortages of some medicines in the BRICS countries. HIV patients can’t get the drugs they desperately need. Why not? The reason this occurs is that pharmaceutical regulatory bodies have been co-opted by the drug industry.This has been dubbed “regulatory capture”.

High degree of regulation is a risk in the pharmaceutical market. Studies on other government sectors indicate that the prevalence of corruption increases when there is a big role for the government. Possible grey areas emerge when pharmaceutical companies aim to influence procurement processes, positive listing, government policies and actual medicine prescription through lobbying and marketing. In 2012 Glaxo to resolve allegations of marketing widely used prescription drugs for unapproved treatments and using kickbacks to promote sales.

A general unwillingness to license third parties to manufacture generics, as the companies seek to recoup their development costs, creates monopoly pricing. The demand for regulation that benefits the industry is clear. Regulatory capturehas become apparent in recent years in negotiations concerning intellectual property regulation in TRIPS and free trade agreements.

Domestic process in the BRICS has allowed patent owners to exert undue influence on the regulation of pharmaceutical patents, creating a problem of regulatory capture at the national level. It is well-established that when faced with the HIV epidemic and the needs arising from the combat against this deadly infection, TRIPS has in many ways been used by the multinationalsto erect an array of barriers undermining attempts by state actors to develop policies and campaigns based on generic antiretroviral treatment. What would be the real price for a generic drug if it were available? Production costs on generics allow for significantly lower treatment prices, plunging from $10,000 to $350 in recent years, which is almost a dollar a day.

In industrialized countries, multinationals are already the gatekeepers for life-saving medicines. The civil society organizations and public health advocates from the Global South are leading an immensely unequal fight against “big pharma” seeking to envelop nascent health care markets. I say ‘unequal’ because the power of the wealthy elite has a significant impact on aspects such as decision-making of policymakers, the capture of research, communication and the media, and even curtailing professional autonomy of health care providers.

The effect of the capture, that we already have a chance to face, is devastating—stripping the governments and people without health insurance coverage and taking full control over the pricing policy. The mechanisms by which multinational corporations pursue the power are surely off the public radar and yet to be discovered, though it is understandable that the prevailing mechanism of capture is through setting up a monopoly or oligopoly and lobbying governments. Roll Call reported a million-dollar boost in spending on lobbying federal government by top 5 pharmaceuticals.

The key issuethat is missing from the equation in the current debates is who is going to pay for the best available medicines. The health crisis of the 2000s is a financial crisis, in which countries face soaring healthcare costs, and to keep costs low, a variety of payment and reimbursement methods have been created in addition to pharmaceutical price controls. Still, efforts to curb the costs and reduce inequality remain inadequate, forcing countries and people to spend more.

BRICS have adopted different paths to universal health coverage and they began travelling along those paths at different points in time. Government spending on health as a proportion of gross domestic product is relatively low across all countries of the BRICS bloc with out-of-pocket payments accounting for a very large share of total health spending.While public services provide everyone with ‘virtual income’ and fight inequality by putting more in the pockets of the poorest, user fees and private services have the opposite effect. That is why healthcare should be financed by the state, and spending on health has to be increased so that countries are able to subsidize healthcare for the poor sufficiently.

My hope is that a truly global health system would invert that profit structure and move a health sector back into the control of the public trust. One day there will be the tipping point. “United we stand,” civil society representatives from the BRICS are gaining power to finally stand up and speak out in the global fora, like Civil 20 and the BRICS Summit. Despite efforts to improve drug regulation at national and international levels, drug regulation remains weak or non-existent in developing countries. The idea of medicine as a public good is eclipsed by the commodification of health itself. Under the regulatory capture of the health sector, the low-income patients in the Global South—those who pay their life savings to combat HIV or cancer—are priced out of a market that glories in shameless capitalism.

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