MNCs allergic to Third World ills

THIS UNIDO study is an useful data source on the world's pharmaceutical industry and has been used in the World Development Report, 1993. The UNIDO data files on this often secretive industry are indispensable and form the basis of much of the analysis in this book.

The authors note that world drug production (measured in 1980 dollars) "has increased more than twofold since 1975 and stood at $150 billion in 1990". The per capita consumption of pharmaceuticals rose from $17 in 1975 to $29 in 1990. But, say the authors, these figures are misleading as they do not reveal that "the bulk of the world's pharmaceuticals are manufactured in very few industrialised countries. About 50 multinationals account for two-thirds of the world's production and exports each year". The largest drug MNC, Merck, had revenues of $7.7 billion in 1990, an amount greater than the total pharmaceutical production in Latin America that year.

These large integrated corporations, which are engaged in all three stages of drug production -- research, manufacture and distribution -- dominate the industry. And, the 10 countries identified as having a sophisticated pharmaceutical industry and a significant research base -- Belgium, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, UK, and USA -- are all in the North.

These MNCs spend remarkable amounts to promote their products. In the UK, for example, the drug industry spent 80 times more than the country's national health service in 1988 to inform doctors about the drugs they offer. Thus, smaller private sector companies or the public sector, are unable to counter the colossal market power and overall influence of the drug MNCs.

On the other hand, citing UNDP estimates, the authors acknowledge that between 1.5 and 2.5 billion people are currently estimated to have little or no regular access to essential drugs, and that number will rise rapidly in the 1990s. Moreover, the development of drugs to treat diseases more prevalent in the developing countries has "lagged behind the industry's successes in other fields".

As the study concludes, the drug companies have not dealt with these ethical and political issues "in an effective manner in the past. This task will only become more difficult if, in the future, the industry is seen to neglect the growing needs of the developing countries as well".

Kamal Mitra Chinoy is a professor of political science at the Jawaharlal Nehru University in New Delhi.