The Facts -- New Internationalist

new internationalist
issue 165 - November 1986

For richer, for poorer, for better, for worse - health and medicine
are caught in a tight web of commercialism. Here we give some of the
facts and figures which measure the extent of the predicament.

MONEY FOR MEDICINE

Spending on health, consumption of drugs and pharmaceutical production in selected Commonwealth countries, 1984/5

What the columns mean

In the less developed countries of the Commonwealth pharmacists and pharmacies are in short supply, meaning many drugs are sold in general stores by unskilled assistants.

The difference between public spending on drugs and the total expenditure involves the difference between state supplied drugs that are subsidized or free from the clinic and those bought over the counter in the private sector. Some pharmaceutical industry spokespeople are prepared to concede a smaller variety of drugs, and a concentration on cheaper, generic versions in the public sector believing that the biggest growth in future pharmaceutical sales will be in the private sector. It is imperative for the essential drugs policy of a country to include all pharmaceutical sales.

In the Third World Commonwealth nations an average of $2.66 a person per year was spent on medication. Yet this is a significantly higher proportion of their gross national product than the industrialized Commonwealth nations (apart from Aotearoa/NZ which averaged $96.78 a person per year.)

Substantial foreign-exchange savings could be made by the less developed countries if they manufactured their own pharmaceutical supplies. Only India and Bangladesh are near to self-sufficiency. For smaller nations, regional arrangements for manufacture and supply could prove to be the answer.

					Drug consumption
Countries	GNP ($)	Budget ($ mill)	Pharm-acists	Pharm-acies	Total ($ mill)	Public ($ mill)	Per cap $	% met by local prod'n
Low Income
Bangladesh	140	98.4	197	N/A	102.50	N/A	1.10	90.0
Malawi	210	13.1	26	26	6.00	4.00	0.92	18.0
Uganda	230	11.6	28	28	2.16	2.16	0.16	-
India	20	536.0	180,000	182,000	1,874.00	400.00	2.61	91.5
Tanzania	280	36.8	200	170	40.00	32.00	2.02	10.0
Sri Lanka	320	53.1	460	5,800	20.00	6.00	1.35	10.0
Vanuatu	350	3.9	6	11	0.48	0.48	3.75	-
Ghana	360	117.0	579	N/A	36.00	36.00	3.00	N/A
Gambia	360	5.4	3	72	1.11	0.37	1.58	-
Kenya	390	114.3	403	213	27.00	7.00	1.50	20.0
Sierra Leone	390	11.6	16	88	13.00	1.30	4.06	15.0
Lower Middle Income
Zambia	640	105.0	135	100	19.00	14.00	3.20	25.0
Solomon Islands	660	2.1	4	9	0.60	0.60	3.00	4.0
Guyana	670	10.7	32	29	6.00	4.00	7.50	40.0
Dominica	710	7.5	29	14	0.62	0.30	6.20	-
Papua New Guinea	820	75.5	33	17	3.50	3.00	1.06	10.0
Zimbabwe	850	118.2	265	96	26.00	N/A	3.50	40.0
Nigeria	860	136.0	2,780	N/A	324.00	N/A	3.56	30.0
Botswana	900	16.6	10	N/A	N/A	N/A	-	-
Belize	953	4.7	3	31	1.70	0.34	10.50	10.0
Upper Middle Income
Jamaica	1,330	108.5	151	N/A	18.10	7.00	8.22	21.0
Malaysia	1,860	466.4	809	200	103.50	19.00	7.14	20.0
Fiji	1,9500	30.3	3	48	5.16	1.72	7.37	-
Malta	3,800	48.0	307	158	9.80	2.50	24.50	5.0
Bahamas	3,830	57.0	46	21	N/A	N/A	N/A	N/A
Cyprus	3,296	39.0	359	251	16.80	5.60	25.85	5.6
Singapore	5,910	181.1	409	133	30.00	6.50	12.00	80.0
Trinidad and Tobago	6,840	235.6	415	411	34.80	34.80	31.63	9.0
Brunei	N/A	35.0	6	4	3.40	3.00	15.80	5.0
Industrialised
Aotearoa (NZ)	6,764	726.3	3,200	1,230	316.00	171.00	96.78	50.0
UK	9,660	27,140	31,955	11,597	3,128.00	2,507.00	55.36	75.0
Australia	11,140	4,184	10,000	5,600	1,052.00	675.00	69.24	70.0
Canada	12,983	4,596	18,356	6,120	1,400.00	700.00	57.00	70.0

Source: Pharmaceutical Manufacture and Formulation in the
Commonwealth 1986, Commonwealth Secretariat Publication.

BIGGER ALL THE TIME

Projected regional expansion of the pharmaceutical market to the year 2000.

In 1980 the developing world, where 63 per cent of the world population lives, consumed only 13.8 per cent of world drug production. Projections of consumption patterns. indicate that they are likely to account for 22 to 27 per cent of the world consumption by the year 2000.

But the UN also refers to other recent reports which estimate the Third World market could be 34 per cent of world consumption by the year 2000.

Source: Transnational Corporations in the Pharmaceutical Industry of Developing Countries, 1984 UNCTC

CASH COUNTS

The connection between health and wealth

The one element most likely to make a difference to a family's health is a family's wealth. In rural Bangladesh the infant mortality rate is twice as high among the families of those who own no land. In 19^th century Europe, the infant mortality rate in the tenements were around 200 deaths per 1,000 babies. That is almost as low as the most medically advanced country today with the most sophisticated of drugs available. Yet it was before any significant pharmaceutical breakthrough had occurred.

NEEDLESS GRIEF

Comparative rates of death of children under five years of age (1963).

The greatest burden of ill-health and death falls on the babies and small children of Third World parents. Insufficient nutrition meant that infectious diseases are often fatal, due to lack of resistance. This bar chart demonstrated that of every 1,000 babies born in Sierra Leone, 310 will die in the subsequent five years. For the same number of Canadian babies, only 9 will perish. In all, about 15 million babies and small children die each year in the world - most from needless poverty. That is one of the grim statistics behind the need for better health.

Baby and small child mortality rates (per 1000 births)
[image, unknown]

PECKING ORDER

Top pharmaceutical companies in the world 1983

What the columns mean

The top 20 pharmaceutical companies accounted for over 50% of total world sales, indicating a high degree of monopoly concentration of industry

Most giant corporations have a widespread of interests, pharmaceuticals is only one branch of their businesses. This is pharmaceutical sales expressed as a % of total corporation sales.

Pharmaceuticals are traditionally a high profit yield, yielding between 15-30% p.a. of total sales turnover. Many companies, particularly those of Europe and Japan are coy about exactly how much their pharma division makes, and bury the figures in overall profits of the corporation. Nevertheless it appears that in 1982/3 US firms were the most profitable, West German and French companies the least.

This denotes r & d investment as a % of sales. It is a particularly sensitive area as the giant brand name companies often justify the high prices of their drugs, significant transfer pricing and handsome profits by the need to generate more income for research into future lifesaving drugs. But their published figures often merge pharmaceutical research with research of all the corporations' products. In the case of Hoechst this covers everything from pesticides and seeds to industrial chemicals

Source: Scrip's pharmaceutical Company League Tables 1982/3

	Company	*Pharma Sales ($ mill)**	% of total Sales	Country of origin	Profitability (%)	Research & Dev. (%)
1	Hoechst	2,628	17.8	W Germany	N/a	10
2	Bayer	2,452	16.7	W Germany	N/a	N/a
3	Merck & Co	2,217	72.4	US	22	10
4	American Home Products	2,144	46.8	US	30	N/a
5	Ciba-Geigy	2,053	29.6	Switzerland	N/a	N/a
6	Pfizer	1,694	49.1	US	28	N/a
7	Eli Lilly	1,535	51.8	US	28	N/a
8	Hoffman La Roche	1,511	42.3	Switzerland	N/a	N/a
9	Sandoz	1,419	46.6	Switzerland	N/a	12
10	Bristol-Myers	1,360	37.8	US	21	N/a
11	Smith Kline	1,339	45.1	US	33	9
12	Abbott	1,299	49.9	US	24	5
13	Takeda	1,291	59.3	Japan	N/a	N/a
14	Warner-Lambert	1,286	39.6	US	22	9
15	B. Ingelheim	1,213	81.7	W Germany	2	15
16	Upjohn	1,213	66.3	US	16	N/a
17	Johnson & Johnson	1,118	19.4	US	28	14
18	Glaxo	989	83	UK	15	N/a
19	E R Squibb	978	58.9	US	12	N/a
20	Rhone-Poulene	895	16.1	France	8	14
21	Am Cyanamid	883	25.6	US	11	N/a
22	Schering-Plough	882	48.5	US	18	N/a
23	ICI	839	7	UK	26	11
24	Wellcome	836	80	UK	9	11
25	Beecham	781	31.3	UK	23	N/a