The Multinational Monitor

JULY 15, 1985 - VOLUME 6 - NUMBER 9

T H E   F I G H T   T O   B A N   B O G U S   D R U G S

The Fight to Ban Bogus Drugs

by Kazi Zawad

DACCA, Bangladesh-In 1982 Bangladesh enacted one of the most progressive pharmaceutical policies in the Third World banning hazardous and useless drugs and tonics, encouraging domestic production of low priced essential drugs and regulating both the advertising and the importing of drugs.

Immediately after the Bangladesh National Drug Policy was enacted it came under fire from multinational drug companies and Western governments most notably the United States. It weathered this opposition, but three years after its promulgation the attack on the drug policy continues despite the fact that it has been responsible for significant improvements in the quality of health care in Bangladesh: the price of drugs has plummeted while many dangerous and useless drugs are no longer available.

But banned drugs remain on the market. Squibb of Bangladesh, a U.S. pharmaceutical corporation, currently awaits trial in a Bangladesh drug court for allegedly violating the policy by stocking huge quantities of banned and unnecessary drugs.

Wyeth Laboratories, another U.S. multinational corporation, is seeking approval for its request to produce aluminum hydroxide gel for antacid preparation. Production and marketing of this drug would undermine the National Drug Policy (NDP) which stipulates that antacids and vitamins are the exclusive domain of domestic companies.

Both reports, disclosed by the Bangla newsweekly Bichitra, triggered sharp reactions from consumers, health professionals and many others who fear that through noncompliance and revision the policy will lose its force.

The nation's endeavor to establish a comprehensive drug policy dates back to 1972. Countries overrun with malnutrition, disease and illiteracy often fall prey to pharmaceutical marketeering and are a hotbed for overpriced medicines and useless panaceas. In 1972 a government committee headed by Professor Nural Islam proposed the banning of hazardous and useless drugs. The committee, however, lacked support from key sectors of the government and was dismantled, allowing the production of useless drugs and tonics to continue.

Almost a decade later, amidst the fanfare of the U. N.'s Health for all by the Year 2000 campaign, the Bangladesh government announced the creation of another expert committee to formulate a strict drug policy to improve the population's health.

This time, the committee, again headed by Prof Islam, produced a proposal in record time. Examining the composition of 4,170 brands of medicines, they found that 1,707 were harmful, contained no proven therapeutic value or were prepared in combinations that were unnecessary. The committee divided these drugs into three catagories - Schedule I, Schedule II and Schedule III drugs. Three hundred and five brands of the most harmful drugs were listed under Schedule I. Producers of these drugs were given three months in which to destroy them. The penalties for noncompliance were severe: failure to destroy such drugs was punishable by 10 years hard labor and a U.S. $8,000 fine. The committee placed 134 brands of unnecessary combination drugs in Schedule II and producers of these drugs were given six months in which to sell or reformulate the drugs. Schedule III drugs included 1,268 brands with little or no therapeutic value that were also being produced locally. Producers had nine months to sell their supplies of Schedule III drugs but no new raw materials could be imported to manufacture drugs that fell into this category.

After the NDP was enacted, the pharmaceutical companies quickly activated their association - BASS, Bangladesh Aushadh Shilpa Shamiti - to oppose the policy.

The pharmaceutical organization flooded the country with full page ads in daily newspapers condemning the policy, calling it an international Oxfam conspiracy. They claimed the effects of such legislation would be devastating for all concerned: the pharmaceutical companies would be destroyed and severe drug shortages would follow, while foreign investments would dry up, forcing still more businesses to close their doors.

The World Health Organization, instead of congratulating the Bangladesh government for its role as a pioneer in the development of a rational drug policy for the Third World, was silent. The Director General of the World Health Organization, Dr. Halfdan Mahler, while visiting Bangladesh a few months after the passage of the NDP avoided a single utterance in favor of the policy. "Dr. Mahler privately congratulated me," said Health Minister Huq, "but when I requested him to issue a statement he declined. He said that he could not do so for if might jeopardize the power of the U.N. since multinationals heavily contribute to its normal operation. But we did not lose heart because we knew that we were right."

The following year, after much prompting from regional offices, WHO finally offered the Bangladesh government tangible support for their ground breaking policy. Today, WHO officials consider the Bangladesh policy a model program for Third World countries looking to improve the health of their people.

Soon after the NDP was implemented diplomats from the United States, Great Britain, West Germany and the Netherlands took over where the multinationals had failed in pressuring the government to abandon its new drug policy. "They only conveyed the grievance of some companies and requested a hearing," Huq said.

The American Embassy later sent a four person independent `expert committee' to Bangladesh - the members turned out to be representatives of the Pharmaceutical Manufacturing Association of America including officials from Squibb, Wyeth and SmithKline.

Following this external pressure a government review committee was set up to reexamine specific aspects of the policy. The committee removed the ban on six locally produced drugs that had been included in Schedule I - including a drug for diarrhea and two dental antiseptics containing 5 to 10 percent alcohol. The ban was also dropped on one domestically produced drug and six drugs produced by multinationals from Schedule II. Although one of these drugs was originally put on the Schedule II list in error, the others - including neomycin combined with coricostoroid and Heptuna Plus, a vitamin and iron combination - were put on the list because of they had little therapeutic value and were only taken off after heavy lobbying. And production restrictions on 28 drugs from Schedule III were removed while compliance time for Schedule II and III drugs was extended to one year and 18 months respectively.

Although the NDP has been delayed and is less comprehensive, it has been highly successful in bringing down the price of imported raw materials (see Table 1). The price of raw material in some cases was 1,000 percent higher than prices after the drug policy. Before the NDP was enacted, multinational corporations were making huge profits by forcing their Bangladesh subsidiaries to pay higher prices for raw materials and imported drugs. For example, in 1979 Pfizer Bangladesh imported tetracycline from Pfizer Hong Kong at U.S. $80.36 per kilogram whereas three companies imported the same drug at a much lower price from Pilau of Yugoslavia. After four years, a national company imported tetracycline from West Germany at U.S. $22.5 per kilogram.

The NDP has also brought the retail price of drugs down (see Table 2). The maximum retail price of drugs was in some -cases cut in half after the policy was enacted.

This decrease, however, does not parallel the decrease in cost of raw materials "because the companies claim other expenses remained the same," said Huq.

Despite claims that the "famous" pharmaceuticals would pack up their technology and flee - depriving the Bangladesh people of new life-saving drugs, no pharmaceutical multinationals have left the country and no domestic companies have closed down. Indeed, the volume of business has increased. And multinationals have regained their original percentage share of the essential and nonessential drug markets (see Table 3). Multinationals, however, continue to market more nonessential drugs than the national drug companies.

Production of raw materials in the country also increased under the NDP. In 1982, national companies produced raw materials worth about U.S. $2.5 million and multinationals produced about U.S. $.5 million. In 1984 these figures increased to U.S. $5 million and U.S. $1 million respectively.

Despite such successes, the proposal in the policy to take gradual steps to manufacture, distribute and sell drugs by their generic names appears to have been shelved after lobbying by the pharmaceutical organization BASS.

"There are some problems in implementing this part," said the current director of the drug administration. "If we strictly adhere to it all drugs will have to be marketed at the same price and consumers will not be able to differentiate between good and bad drugs."

This statement ironically echoes the multinational's dubious claim that their drug prices are high because of the better quality.

Another element of the policy that has not been implemented is the curbs on the manufacture, sale and distribution of bogus, adulterated and substandard local medicines. One preparation from the Ayurvedic system, an old Indian approach to holistic health, contains more than 40 percent alcohol and company appointed Kabirajs (Ayurvedic physicians) claim that it is a cure-all. In reality, this item is one of the fastest moving "medicines" available, but it does little more than satisfy a desire for alcoholic beverages.

The government itself also uses drugs which should be banned. Depo-Provera is being pushed in clinics and hospitals throughout Bangladesh as a contraceptive. These clinics are havens for private dealers. DepoProvera's "use cannot be kept under control," said a doctor working in the northern part of the country. "It is available over the counter in rural drug stores. The demand seems to be high - one vial costs about $2 to $2.50. "The Depo-Provera available in Bangladesh, produced by the Upjohn Company, is banned in many countries - including the United States - for use as a contraceptive.

But in Bangladesh, the director of the Drug Administration argues that such bans are only temporary. "One member of the drug control committee has recently visited America," he said. "He has told the committee that a technical committee has passed it and the FDA will lift its ban. Moreover, it is being used in many countries." But in reality the Upjohn Company has not been able to gain contraceptive approval for DepoProvera despite 25 years of lobbying (see FebruaryMarch 1985 issue of the Multinational Monitor, "The Case Against Depo-Provera").

In another example, a Bangladesh doctor reported that Pfizer is now distributing promotional samples of Heptuna Plus though the company has supposedly stopped its production, while injection ampules imported by Ciba-Geigy are enjoying duty-free status and snatching the market from local producers.

The pricing policies of the multinationals have often come under fire from the national companies for their price gouging. "BASS-member companies push their products by giving a 30-40 percent discount to dealers to drive out small national companies from the market," charged the director of one national company.

The multinational pharmaceutical companies' attack on Bangladesh's National Drug Policy to date has had a limited albeit significant effect. Through revisions, delays and noncompliance they have been able to challenge specific measures but much of the policy remains intact.

"Subsequent governments may modify, change, or cancel it," said Prof. Islam, one of the founders of the policy. But, �I would say that any good government should continue to do good to the people," he said. "This government has received appreciation from world experts and many countries have followed the Bangladesh example."

Kazi Zawad is a reporter with the Bangladesh newsweekly Bichitra

Table 1: Prices of Raw Materials Before and After the NDP

Price in U.S. dollars per kilogram

Raw Material Price Before Price After
Glibenclamide 2350 150
Doxycyline 1250 250
Hyoscine-N-Butyl Bromide 1358 830
Tretracycline Hcl 75 28
Oxytetracycline Hcl 80 30
Ampicillin 120 60
Amoxycillin Trihydrate 140 66
Cloxacillin Sodium 115 72
Sulphamethaxazole 90 26
Trimethoprim 150 46

Source: Bangladesh Drug Administration

Table 2: Maximum Retail Price of Some Essential Drugs
Before and After the NDP

Unit price in Taka

Drug Price Before Price After
Ampicillin capsule 2.00 1.50
Tetracycline capsule 1.04 0.70
Co-Trimexazole capsule 2.30 1.15
Amoxicillin capsule 3.50 2.35
Metronidazole tablet 1.42 0.85
Levamisole tablet 1.37 0.85
Anacid tablet 0.45 0.30

Source: Bangladesh Drug Administration

Table 3: Share of Production of 45 Essential Drugs
by MNCs and National Companies

Production in US Dollars

Year Total ($mil) MNCs (%) NCs (%)
1981 21 45 55
1982 30 43 57
1983 46.71 25 75
1984 73.22 43 57

Source: Bangladesh Drug Administration

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