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.
Source: Pharmaceutical Manufacture and Formulation in the
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
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 19th 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.
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)
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
* Denotes % profits of total corporation activities, but pharmaceuticals make up 80% of sales turnover