The Multinational Monitor

July/August 1987 - VOLUME 8 - NUMBERS 7 & 8


A Costly Cure

Diarrhea, considered the leading health problem in many developing countries, kills nearly five million children each year.

In many cases there is a simple solution for acute watery diarrhea: a mixture of sodium bicarbonate, sodium chloride, potassium chloride and glucose, stirred into drinking water. Called oral rehydration therapy (ORT), it can treat 90 to 95 percent of diarrhea cases effectively and cheaply. But since a packet of oral rehydration salts costs only pennies to produce, it has a limited profit margin, while the other leading treatments - antibiotics and other antim icrobial drugs - albeit less effective, are a much more profitable venture. For multinational pharmaceutical companies the decision of which type of treatment to market is easy. For the developing world it is a disaster.

Over half of the antidiarrheal products currently on the market contain antibiotics. Although they bring in millions of dollars to local and multinational drug companies, these drugs have been proven in numerous studies to be virtually ineffective in treating diarrhea. And they often exacerbate the problem, adding more deaths to the already heavy toll diarrhea takes in the developing world.

Antimicrobial drugs, including antibiotics, change the normal bacterial content of the digestive system, which may cause fungal infections and an overgrowth of resistant bacteria. The drugs can also prolong the period during which a victim is contagious, increase the risk of relapse, and make future diagnoses of bacterial diseases more difficult.

"It is outrageous even to consider marketing such drugs for diarrhea in this day and age," says Michael Rawlins, professor of clinical pharmacology at Newcastle University in Great Britain. Health Action International (HAI), an international network of consumer, development action and health groups, agrees and is calling for a ban of over 200 antidiarrheal drugs that contain antibiotics.

"The causative agents of diarrhea are mostly viruses and therefore are not affected by antibiotics," says Ibrahim Elarabi of the World Health Organization (WHO). Even in most cases of bacterial diarrhea antibiotics are useless and often harmful, prolonging the disease and diverting attention from more important health care measures such as providing the sufferer with plenty of fluids. Although some doctors think the prescription of antibiotics should be routine in case the infection turns out to be bacterial, Professor H.P. Lambert of St. George's Hospital in London says, "The widespread use of antimicrobials promotes the selection of antibiotic resistant strains and thus lessens the likelihood that the drugs will later be effective for those few patients who need them."

WHO, an active participant in the campaign against the marketing of these drugs as a treatment for diarrhea, claims that their indiscriminate use "must be discouraged, not only because they are often of no therapeutic value, but they are needlessly expensive and can also be harmful."

More than 160 companies are involved in the trade of obsolete antidiarrheal drugs. Large transnationals such as Bristol-Myers, Dumex, Parke-Davis/WarnerLambert, and Upjohn make millions of dollars selling antimicrobials for diarrhea to people who often cannot realistically afford them. These expensive drugs cut severely into the food and medical budgets of poor people, often with little or no benefit. "It's a disgrace that consumers in developing countries are subjected to this mistreatment," says Catherine Hodgkin, HAI's coordinator.

ORT, considered by some to be one of the most important medical breakthroughs of the century, is now being disseminated in the developing world. WHO hopes that by 1989,35 percent of all childhood diarrhea cases will be receiving adequate ORT. The treatment, both inexpensive and easy to use, could mean a major turnaround in the health of Third World children. Diarrhcal diseases, says Leonardo Maui of WHO, are the "most important single health problem in the developing countries of the world, as well as one of the major contributors to malnutrition, poor health and inadequate performance of children."

Often the disease iyself is not fatal, but its mismanagement is. Many deaths are the result of dehydration: mothers inaccurately believe that liquids are bad for a child with diarrhea. Acute diarrhea as a major health problem is not limited to Third World nations. In Western Europe and North America it results in more nonsurgical pediatric hospitalizations than any cause other than respiratory diseases. ORT can also be used to treat some cases of cholera and Shigella dysentery, two adult diseases that are often treated with antibiotics.

Although WHO is attempting to make the wonders of ORT well-known, it is a slow process. Nearly $150 million a year is spent on antibiotics or other antimicrobial drugs for diarrhea and few expect the pharmaceutical industry to acquiesce to demands for restrictions and bans without a fight.

But notes HAI, "If the pharmaceutical industry is not prepared to withdraw those products voluntarily, then it is up to governments and their regulatory authorities to prohibit their sale."

- Rachel Wolfe

Heinz Oils the Wheels of Free Enterprise in Zambia

LUSAKA, Zambia - In a major restructuring the Zambian government has started selling the firms it nationalized after independence in 1964.

Faced with some S-I billion in foreign debts, the government is auctioning off public sector holdings in an attempt to please foreign creditors and end subsidies to state-owned companies.

To set the ball rolling, the multinational food processing company, H.J. Heinz Company, has taken over the oil refinery firm, Refined Oil Products (ROP). It is the first of many parastatal companies that have been earmarked for takeover by various multinationals, many of which are owed large sums of money by Zambia.

H.J. Heinz, which has already pumped an initial $1.5 million into the deal, will control 49 percent of the company's stock. Under the agreement signed between the holding firm of ROP, Industrial Development Company (Indeco) and H.J. Heinz, the American transnational will fully control the management of the new company, which will be renamed Premium Oils Industries (POI) and Indeco will have a majority of the seats on the board of directors.

Although Indeco Managing Director Mr. Dixie Zulu and H.J. Heinz President Dr. Anthony O'Reilly said they looked forward to a successful venture, they are approaching it with cautious optimism.

Fearing that their minority position on the board of directors would jeopardize the company's independence, the H.J. Heinz chief made it clear that he intended to run the company free of government intervention. "We hope our firm will be allowed to charge our own prices without interference," O'Reilly told Zambian President Kenneth Kaunda.

He quickly reassured the apparently worried president, however, that "the new company will not charge prices that will embarrass the Zambian government."

There are fears that even if the new company charges "economic prices," it will make the lives of most Zambians more unbearable since they cannot afford the prices of most basic items today.

Prices area volatile issue in this formcr British Colony. In December 1996, vviolent food riots erupted when the government doubled the price of the staple maize meal. Indeed the initial nationalization occurred so the state could control prices.

Although the Zambian government has denied it, the transaction with H.J. Heinz is understood to be part of an Intemational Monetary Fund (IMF) and World Bank restructuring program. The country's biweekly National Mirror recently reported that the IMF and the World Bank had told Zambia to "hand over both nationalized companies or face severe hardships."

President Kaunda maintains that he had initiated discussions between the two firms because joint ventures allow ideas to be shared between Zambian managers and foreign investors.

Indeco Managing Director Zulu also denied that the deal was a result of the IMF and World Bank restructuring program. "It was an independent decision aimed at ending shortages of products, poor quality goods and substandard services to the people," he said.

Under the agreement, H.J. Heinz, which was picked from several international firms, is required to increase vegetable oil production as well as improve the quality of various items within a year.

It is rurnored that the next parastatal to be sold is the Zambia Breweries Company. According to official sources, a Dutch brewing company, Heineken Techni scn Beer, will buy the country's brewery for an undisclosed amount.

- Lee Musanda
Third World Network Features

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