Can "Ethical" Pharmaceuticals Slash Prices?

[JohnMack]

Don't expect "ethical" pharmaceuticals to save the world

Philip Stevens
Medical Progress Today
January 25, 2007

This month, scientists at Imperial College, London, unveiled their model for "ethical pharmaceuticals", claiming that they will slash drug prices and save poor countries from disease. But their scheme—little more than suborning patents to speed generic market access—fails to take into account the realities of developing and distributing new medicines, and seems aimed more at salving western consciences than helping the poor.

In reality, the price of new drugs has little to do with the high disease burden in developing nations. Promoting good health in the poorest countries depends on training more local health professionals and building more clinics and diagnostic facilities. Better health care infrastructure—combined with efforts to tackle corruption and reform inept bureaucracies—will in turn improve access to effective treatments, many of which are very cheap already. "Ethical" pharmaceuticals will not solve those problems, and will only reduce companies' incentives to produce new medicines that are desperately needed by rich and poor nations alike.

The premise of "ethical pharmaceuticals" is simple: access to medicines is low in poor countries because of the high prices that arise when pharmaceutical companies patent their drugs, giving them a monopoly on those drugs. Imperial College scientists claim that by slightly altering the molecular structure of an existing drug they can circumvent the patent and market their "new" product at rock bottom prices, thus rescuing the poor from a whole host of diseases.

The Imperial College team is currently working on an amendment to an existing Hepatitis C drug, a disease which affects 170 million people worldwide. The clinical trials and manufacture will be outsourced to an Indian biotech company, and will be financed by the government of India. The team claims that they can reduce the cost of developing the new drug from the usual $800m to just a couple of million dollars.

This looks like a good scheme on paper, and has received a lot of excited coverage in certain sections of the media. But the prosaic truth is that—even if the scheme produces a marketable drug—it is unlikely to make much difference to patients on the ground.

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