FacebookTwitterGoogle+RedditEmail

Drug Companies’ Expansion Into Emerging Markets

by DR. CESAR CHELALA

Faced with declining prescription drug sales in the U.S., and having lost patent protection for many profitable drugs, the drug industry is relying increasingly in new markets such as China and other fast developing countries, such as those in Africa. That expansion, however, is oftentimes tainted by unsavory commercial practices.

The Economist Intelligence Unit estimates in $166 billion drug sales by 2017 in China, making of this country a natural market for companies looking for further growth. In Africa, although the size of the market is still small, the rapid growth of many big cities offers interesting opportunities for development. Pharmaceutical spending in Africa may reach $30 billion by 2016, from approximately $18 billion now. According to the World Health Organization (WHO,) Africa has 11 percent of the world’s population, yet it accounts for 24 percent of the global disease burden.

The rebound of the economies in several Latin American countries has made of the region an attractive market for drug companies. The Latin American market is estimated at $70 bn in sales. Brazil, which is the largest market in the region, grew by 10 percent in 2010, and is now worth $26 bn, according to IMS Health, a company that provides information services and technology to the drug industry.

In China, relationships between doctors and patients are under stress. One of the reasons is the unethical relations between many doctors and several drug companies. Although the practice of bribing doctors is not new in China, new allegations have surfaced recently against some well known drug companies that demand new and more effective measures against this practice. According to some estimates, up to 30 percent of the cost of drugs is kicked back to doctors to increase sales.

There are several ways in which doctors are bribed by drug companies: they go from making cash payments and all-expenses-paid trips, to presents for their families and even “sexual favors.” Drug companies also bribe hospitals to stock their drugs so that doctors can prescribe them.

Among the latest allegations is against GlaxoSmithKline (GSK), accused that its staff had improperly used cash and other incentives to boost the prescription of Botox in China, which the British group sells under agreement with the patent-holder Allergan.
Although China now accounts for only a portion of the company’s total earnings (about $1.2 billion in 2012 compared to $40 billion in worldwide sales) the country is one of the company’s fastest growing markets.

Allegations against GSK are not limited to China. Last summer, the company agreed to pay a $3 billion fine to settle criminal and civil charges with US federal and state governments resulting from illegal activities carried for over 10 years. The British pharmaceutical group was accused of selling antidepressant medications in the US for unapproved uses on children, concealing critical evidence from the US Food and Drug Administration.

In addition to GSK, several other companies have been accused of rampant bribery, among them Eli Lilly, Pfizer, AstraZeneca, Sanofi, Novartis, Novo Nordisk and UCB. A former employee of Eli Lilly has accused the company of spending more than $490,000 to bribe doctors in China. Over the last year, both Eli Lilly and Pfizer have been accused of making illegal payments in China. The Swiss drug maker Novartis was also accused of bribing doctors to prescribe its anticancer drug Sandostatin LAR.

In Africa, drug companies have been accused of testing dangerous drugs in children or conducting drug tests without obtaining informed consent. In Nigeria, a panel of medical experts accused Pfizer Inc. of having violated international law during a 1996 meningitis epidemic by testing an unapproved drug for use in children. According to Nigerian officials, Pfizer’s illegal actions killed 11 children and left dozens of children disabled.

Pfizer never obtained authorization from the Nigerian government to give the untested drug to nearly 100 children and infants. Nigerian medical experts stated that an oral form of Trovan, the drug used in the test, had apparently never been given to children with meningitis.

Thirty Nigerian families whose children participated in the Trovan trial filed suit against Pfizer in 2001 under the Alien Tort Claims Act, to have the case heard in the US instead of in Nigeria. On July 30, 2010, Pfizer agreed to pay $75 million in a settlement to have the charges dropped. According to Wiki leaks, however, Pfizer allegedly conspired to have Nigeria’s attorney general drop the charges instead of having to pay up.

According to a report by the Public Citizen’s Health Research Group in Washington, D.C., four companies (GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough) accounted for more than half of all financial penalties imposed over drug companies in the last two decades.

In Latin America, drug companies have pursued an aggressive policy to the market. Such policy has been harshly criticized because it translates into increasing prescription drug prices for the consumers. Those that oppose these policies are bound to pay a high political price for it.

Argentina is a paradigmatic case in that regard. Dr. Arturo Umberto Illía, who was elected President of Argentina in 1963, was overthrown in 1966 among other reasons because of the limits he tried to put to the drug companies in Argentina. In 1964 the “Medicine Law” was passed, tightening regulations to the pharmaceutical industry. That law also granted the Ministry of Health the authority to control prices of basic medicines.

This law also forced pharmaceutical companies to present to a judge an analysis of the costs of their drugs and to formalize all existing contracts. Impartial observers and people along the political spectrum believe that these restrictions alienated business interests and were decisive in Dr. Illía’s overthrow by a military coup.

Emerging markets offer exceptional opportunities for prescription drug companies’ development. That development, however, should be done according to international norms and practices and not only with the companies’ profit in mind.

Dr. Cesar Chelala is an international public health consultant and a co-winner of an Overseas Press Club of America award.

Dr. Cesar Chelala is a co-winner of the 1979 Overseas Press Club of America award for the article “Missing or Disappeared in Argentina: The Desperate Search for Thousands of Abducted Victims.”

More articles by:
May 31, 2016
Miguel A. Cruz-Díaz
Imperial Blues: On Whitewashing Dictatorship in the 21st Century
Vijay Prashad
Stoking the Fires: Trump and His Legions
Patrick Howlett-Martin
Libya: How to Bring Down a Nation
Uri Avnery
What Happened to Netanyahu?
Corey Payne
Reentry Through Resistance: Détente with Cuba was Accomplished Through Resistance and Solidarity, Not Imperial Benevolence
Bill Quigley
From Tehran to Atlanta: Social Justice Lawyer Azadeh Shahshahani’s Fight for Human Rights
Manuel E. Yepe
Trump, Sanders and the Exhaustion of a Political Model
Bruce Lerro
“Network” 40 Years Later: Capitalism in Retrospect and Prospect and Elite Politics Today
Robert Hunziker
Chile’s Robocops
Aidan O'Brien
What’ll It be Folks: Xenophobia or Genocide?
Binoy Kampmark
Emailgate: the Clinton Spin Doctors In Action
Colin Todhunter
The Unique Risks of GM Crops: Science Trumps PR, Fraud and Smear Campaigns
Dave Welsh
Jessica Williams, 29: Another Black Woman Gunned Down By Police
Gary Leupp
Rules for TV News Anchors, on Memorial Day and Every Day
May 30, 2016
Ron Jacobs
The State of the Left: Many Movements, Too Many Goals?
James Abourezk
The Intricacies of Language
Porfirio Quintano
Hillary, Honduras, and the Murder of My Friend Berta
Patrick Cockburn
Airstrikes on ISIS are Reducing Their Cities to Ruins
Uri Avnery
The Center Doesn’t Hold
Raouf Halaby
The Sailors of the USS Liberty: They, Too, Deserve to Be Honored
Rodrigue Tremblay
Barack Obama’s Legacy: What Happened?
Matt Peppe
Just the Facts: The Speech Obama Should Have Given at Hiroshima
Deborah James
Trade Pacts and Deregulation: Latest Leaks Reveal Core Problem with TISA
Michael Donnelly
Still Wavy After All These Years: Flower Geezer Turns 80
Ralph Nader
The Funny Business of Farm Credit
Paul Craig Roberts
Memorial Day and the Glorification of Past Wars
Colin Todhunter
From Albrecht to Monsanto: A System Not Run for the Public Good Can Never Serve the Public Good
Rivera Sun
White Rose Begins Leaflet Campaigns June 1942
Tom H. Hastings
Field Report from the Dick Cheney Hunting Instruction Manual
Weekend Edition
May 27, 2016
Friday - Sunday
John Pilger
Silencing America as It Prepares for War
Rob Urie
By the Numbers: Hillary Clinton and Donald Trump are Fringe Candidates
Paul Street
Feel the Hate
Daniel Raventós - Julie Wark
Basic Income Gathers Steam Across Europe
Andrew Levine
Hillary’s Gun Gambit
Jeffrey St. Clair
Hand Jobs: Heidegger, Hitler and Trump
S. Brian Willson
Remembering All the Deaths From All of Our Wars
Dave Lindorff
With Clinton’s Nixonian Email Scandal Deepening, Sanders Must Demand Answers
Pete Dolack
Millions for the Boss, Cuts for You!
Peter Lee
To Hell and Back: Hiroshima and Nagasaki
Gunnar Westberg
Close Calls: We Were Much Closer to Nuclear Annihilation Than We Ever Knew
Karl Grossman
Long Island as a Nuclear Park
Binoy Kampmark
Sweden’s Assange Problem: The District Court Ruling
Robert Fisk
Why the US Dropped Its Demand That Assad Must Go
Martha Rosenberg – Ronnie Cummins
Bayer and Monsanto: a Marriage Made in Hell
Brian Cloughley
Pivoting to War
FacebookTwitterGoogle+RedditEmail