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Africa could learn from India’s burgeoning pharma sector

BMJ 2013; 347 doi: https://doi.org/10.1136/bmj.f4235 (Published 02 August 2013) Cite this as: BMJ 2013;347:f4235
  1. Sakthivel Selvaraj, senior health economist, Public Health Foundation of India, New Delhi, India
  1. shakti{at}phfi.org

Prohibitive drug costs are leading some African countries to try to enter the generic market. They would do well to look at India’s model, says Sakthivel Selvaraj

India is the global pharmacy, producing and supplying essential drugs to more than 200 countries. Its drug market is valued at $15.64bn (Rs930bn; £10bn; €12bn), of which more than 40% comes from exports.1 2 India has more than 10 000 producers and more than 262 factories approved by the US Food and Drug Administration.3

As African countries grapple with the HIV/AIDS pandemic, coupled with malaria and tuberculosis, they increasingly buy cheap generic drugs from India. In 2012 Africa accounted for almost a quarter of India’s drug exports. In the late 1990s a campaign to improve access to antiretroviral drugs in Africa started a process that has brought the price of these drugs down from more than $10 000 a patient a year—using drugs sold by multinational drug companies—to less than $150—using drugs sold by Indian generic manufacturers.4 But African countries could obtain the drugs more cheaply if they produced them themselves.

African countries struggle to set up their own drug industries. In South Africa, a stringent system of patenting has prevented production of antiretroviral drugs by generic manufacturers. Currently, its patent laws allow international manufacturers to undertake “evergreening” and patent “me too” drugs.

India has been able to develop its generic drug sector and put life saving drugs within the reach of its citizens through its progressive patent laws. It has a mechanism to stop “me too” drugs from gaining patent protection (section 3 (d) of the amended Indian Patent Act 2005). Indeed, the apex court recently upheld this provision against Novartis by rejecting its patent application for the β polymorphic form of imatinib mesylate, called Glivec.5

Another problem for African countries is the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement. Although TRIPS contains some safeguards to enable generic production, such as parallel imports and compulsory licensing, it is stringent and acts as an impediment to access to medicines. Less developed countries in Africa should delay signing up to it until 2025 and those that have already signed should make sure they make use of its flexibilities. India signed the agreement in 2005.

African countries have complained that Indian generic drugs are too expensive. Wholesale prices of Indian generic drugs may be reasonable, but once procurement agencies based outside the country and working for foreign governments have taken their commission, prices seem less attractive. African countries should remove these intermediaries and strengthen procurement agencies within their own country or, if the countries are small, organise regional agencies so that they can buy drugs directly from Indian generic manufacturers at lower prices.6

A recent African delegation to India heard about the pooled procurement model adopted by the Tamil Nadu Medical Services Corporation. This model relies on an efficient, effective, and accountable system of centralised procurement and decentralised distribution of drugs. Several Indian states are replicating this successful model.

Several African countries—for example, South Africa, Morocco, and Tanzania—want to expand their domestic drug industry, but have few manufacturing plants and because they are small they are not as competitive as Indian drug manufacturers.

Some argue that small countries cannot compete with large countries in producing their own drugs.7 Building more factories, training engineers, and encouraging technical collaboration should be a priority for some of the larger African countries. Partnership with India and other countries that produce generic drugs is critical for the long term sustainability of a country’s drug industry in general and access to drugs in particular.

Big pharma, procurement agencies, and prescribers have expressed doubts about the quality of drugs produced and exported by India. Some European countries have seized Indian generic drugs being exported to Africa on the pretext of their being counterfeit. However, a study conducted by the Indian government, with sampling designed by the Indian Statistical Institute, reported that just 0.05% of all drugs produced in India are of “spurious” nature and not the 25% quoted by the World Health Organization.8 African countries need to challenge the European authorities over the seizing of Indian generic drugs.

Moreover, transnational drug companies are targeting Indian generic companies inappropriately by trying to link the intellectual property regime to counterfeits, with enforcement by regulatory agencies, such as customs officials in the European Union, on this pretext.9 This has grave implications for Indian generic companies as well as access to essential medicines in Africa and other developing countries. The solution is to get rid of the link between intellectual property protection and counterfeit legislation in the European Union and in some African countries.

For the generic drug industry in both Africa and India to flourish change is needed, but Africa can learn much from India’s model.

Notes

Cite this as: BMJ 2013;347:f4235

Footnotes

  • Competing interests: I have read and understood the BMJ Group policy on declaration of interests and have no relevant interests to declare.

  • Provenance and peer review: Not commissioned; not externally peer reviewed.

References

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