Pharmaceuticals Reined by Holland, Bangladesh; Unleashed by U.S.

Foreign drug companies operating in Bangladesh are not too happy these days, for on May 31, the government of Bangladesh launched a sweeping new drug policy sharply curbing their activities.

The government announced that 1,742 drugs would have to be withdrawn from the market: 237 of these, the health ministry deemed hazardous, and has banned them immediately; the rest, which the government considers to be of no health value and a drain on consumer's resources, can continue to be sold for only six more months.

The Bangladishi policy is designed not only to help out consumers, but also to aid the local pharmaceutical industry in an effort to achieve self-sufficiency in the production of essential drugs.

Foreign firms will not be allowed to produce the same drugs that local companies are manufacturing, and multinationals that do not manufacture in Bangladesh will no longer be able to sell drug products in the country.

Bangladesh's health minister, major general Shamsul Huq, at a press conference explained that these actions were taken because "the incomplete transfer of technology, restrictive business practices, and purchase of raw materials by the multinational at inflated prices from tied sources" were "detrimental to our national economy."

The local Bangladeshi pharmaceutical association welcomed the policy "wholeheartedly," according to a statement saying that because of "neglect by past governments and conspiracies by the multinational pharmaceutical companies, the national pharmaceutical industry could never develop properly."

Eight foreign drug companies control about 75% of Bangladesh's drug market. The U.S.-based Pfizer Corporation is the largest pharmaceutical company in the country, with 1981 annual sales of $13.2 million. Eighteen Pfizer products are on the list of drugs to be withdrawn. The only other U.S. company in the top eight is Squibb, ranked fifth, with sales of $6.8 million in 1981, according to Consumer Association of Bangladesh. Squibb has eight products to remove from sale.

The new policy "came rather suddenly," says Pfizer's public relations officer, Mike Hodin. "We think it should be reviewed" and says Pfizer is working through the U.S. Pharmaceuticals Manufacturers Association, which "has requested a delay of implementation and a review of the policy."

"I and a number of company officials will be going to Dacca to discuss with the government " the U.S. industry position on the policy, says Richard Holbrook, far eastern regional director for the U.S. Pharmaceutical Manufacturers Association. "We are trying to set up a review committee to examine" the policy.

Squibb too is concerned about the policy, and is discussing the issue "with other companies, the Pharmaceutical Manufacturers Association and the State Department" to see what can be done, says Kenneth Rabin, public affairs director for the company.

"We hope the Bangladesh government will not be swayed by pressure from the U.S. government and multinational drug companies to weaken this important step toward improved health for Bangladesh's population, "says a spokesperson for Health Action International, a network of non-governmental organizations established in 1981 to monitor the pharmaceutical industry and promote rational health programs in the Third World.

Holland moves against "price-fixing"

The government of the Netherlands on June 9 denounced the "price-fixing" policies of multinational drug companies and instituted a price freeze on the products those companies import into the country.

"The import price (of drugs) is not the result of free-market determinations but rather is fixed by the pricing policies of the companies," said a statement signed by Holland's minister of economic affairs and by the minister of health and environmental protection. "For brand name drugs which are imported into the Netherlands," the statement charged, "the prices to consumers are most of the time much higher than the prices in the countries from where they are imported."

The Dutch government considers the pricing of drug imports to be a "serious" matter "because about 80% of the drugs" on the market in that country are imported. "The price level has gotten so high and has such a large impact on the cost of health care that it is of socio-economic importance" to regulate prices. The Dutch government announced that it was freezing the price of drugs at levels existing as of May 16, 1982.

The new Dutch law "creates some very serious difficulties" for U.S. drug companies, says a spokesperson for the U.S. Pharmaceutical Manufacturer's Association. "Some of our companies are going to pay." Abbot Laboratories, Bristol-Myers, Pfizer, Schering-Plough, and Squibb all have operations in Holland.

"Legal action has been taken" to challenge the new law, the spokesperson says, with the Dutch pharmaceutical association - to which the U.S. subsidiaries belong - leading the charge, both in the Dutch courts and before the European Economic Community.

George Bush blesses drug industry; damns regulation

While the governments of Holland and Bangladesh openly criticized multinational drug companies in early June and moved to increase regulations on them, the U.S. government took just the opposite tack.

Officials from drug companies around the world met in Washington on June 7 and 8 to discuss current developments within the industry. The Reagan Administration embraced the visitors, with Vice President George Bush opening the meeting - held at the State Department -- and warning of the evils of government regulation.

"The growth of federal regulation effects this pharmaceutical industry perhaps as much as any other," Bush told the 300 industrialists from over 33 countries who attended the eleventh meeting of the International Federation of Pharmaceutical Manufacturers Association. "The regulatory impulse, the slow slide towards more and more centralization, towards statism," must be stopped, Bush said calling regulation a "bureaucratic despotism" that "has been gradually strangling the kind of enterprise that has sustained our country and our dreams."

Bush was a director of the Eli Lilly company - the seventh largest U.S. drug firm - from 1977 to 1979 and owned $145,000 worth of the company's stock until he took office in January, 1981, when he placed his investments in a blind trust.

"It's wrong to approach every producer, every job creator in this country as though there was something illegal about it," said Bush, "as though they were trying to cut corners in order to up the profits, against the general welfare of the people of the United States.

Reassuring his audience, Bush said that the Reagan Administration was moving to "end this adversary relationship."

Drug companies officials heard only one sour note at the two-day long gathering, when Dr. Halfdan Mahler, director general of the World Health Organization, brought up the topic of drug company practices in the Third World.

"If you are not the devils that some people would describe you as, permit me to say, very quietly, that you are not angels either," Mahler told the company officials. "Some of your promotional practices in the developing countries are perhaps excessive. And some of your double standards of marketing are perhaps dubious."