Multinational Monitor

JUN 2002
VOL 23 No. 6


An Epidemic of Neglect: Neglected Diseases and the Health Burden in Poor Countries
by Rachel Cohen

Victory and Betrayal: The Third World Takes on Rich Countries in the Struggle for Access to Medicines
by Asia Russell

Commentary: Patents Pools and the AIDS Crisis
by James Love

The Evergreen Patent System: Pharmaceutical Company Tactics to Extend Patent Protection
by Robert Weissman


Essential Drugs and Health for All: Healthy Innovations from Bangladesh
an interview with
Zafrullah Chowdhury



Behind the Lines

Stripping Away Big Pharma’s Fig Leaf

The Front
Haiti’s Not-So-Free Zones

The Lawrence Summers Memorial Award

Names In the News


Essential Drugs and Health for All: Healthy Innovations from Bangladesh

An Interview with Zaffrulah Chowdhury

Dr. Zafrullah Chowdhury is regarded as the father of Bangladesh's National Drug Policy, which pioneered an affordable health strategy based in part on the local manufacture of a relatively small number of essential drugs. He is a founder of Gonoshasthaya Kendra, a Bangladesh people's health center that trains health workers, especially women, to provide care in rural Bangladesh, and also includes a university, a hospital and a generic drug manufacturing factory.

Multinational Monitor: What is Gonoshasthaya Kendra (GK)?

Dr. Zafrullah Chowdhury: Gonoshasthaya Kendra means "people's health center" in Bengali, the language spoken by 280 million people in Bangladesh and parts of India.

GK was started in 1971, soon after the independence of Bangladesh, by a group of people who had fought for the freedom of Bangladesh. It was started with two objectives. First, we realized that the fate of the poor decides the fate of the country. If the poor do better, the country does better; if the poor are going down, then the country goes down.

Second, we felt that the development of the country is linked to women's position in the country. If women are not involved, the country cannot develop quickly. This is even more so in a Muslim country, where the women have to look after the children, the elderly and so on. So their education, their public life activity, their involvement is very important.

Ill health is an important factor that forces the poor to remain poor. If they make a little bit of money, one episode of illness can wipe them out. The poor get the worst of everything. More often they get the wrong prescriptions, the wrong or costly medicine. To get treated, they often have to sell their cows, their chickens or part of their house.

In the rural areas, very little or no health care was available. The medical profession accrued its power from mystification of the profession. They mystified the science. As a result, they also monopolized it.

They would not allow health care to be given by other people. On the one hand, they are not willing to go to the villages, to the rural areas and work for the people. Even if the state is willing to pay them, they are not willing to go, because they can make a better living in the city. On the other hand, they will prevent other people from doing it.

As a result, all over the world, in every Third World country, there are many unqualified health practitioners. The medical profession will call them quacks. But they are performing a public service. They are the people who give some medicine and some care.

What we have tried to do is involve village women -- mostly young women, especially the traditional birth attendants -- in bringing health care to the rural poor. In all of the Third World -- Bangladesh is no exception -- deliveries are done at home. Even now, 90 percent of deliveries are done at home with a traditional birth attendant. So we thought, why not train them all, so they can be useful in cutting down the maternal and infant mortality rates?

Most of the paramedics we trained were women. We realized it was very easy to train women. They are faster learners than men.

We trained the women to do minor surgeries. Abdominal surgeries. Family planning operations. They learned very fast. One time a Johns Hopkins and a Harvard gynecologist went to Bangladesh and saw these women. They said, "They must be doctors, but they look very young to be doctors." I said, "No, your problem is that you have mystified the science. We have demystified the science."

Once we trained the workers, we next found that the medicine was very costly. The medicines needed to treat the diseases of the poor were either not available or too costly. In the 1970s, the knowledge of how to treat diarrhea was available, but the scientists did not want to teach the people how to treat it.

Then there was tuberculosis. In those days, to treat a patient with tuberculosis, one day's treatment would cost at least two days' wages.

Then we discovered the linkage to multinational companies. They are making a little investment and then they say it's a high-tech, high investment -- using big words that would influence medical professionals -- while suppressing information on the actual cost of production and other things. That's what led GK to work for essential drug production. But we never realized the power of the multinationals. We were very innocent.

MM: And then you decided to venture into generic production?

Chowdhury: We thought we had to produce the drugs ourselves to make them cheap and available to the public.

We ran into tremendous problems. We encountered tremendous difficulty getting permission to establish a drug factory. It took five years. We couldn't understand why there were so many delays. Later on, we found out what happened. Multinationals have a faster information service. They always know how you're moving. Anywhere you send an application, they find out and counter your moves.

Once we entered into production, we began to see a new world. Drug prices could be very cheap. Unthinkably cheap. The price of a peanut. In fact, there were many common drugs whose prices were less than the price of a packet of peanuts. But who would believe it? The drug companies have mesmerized the entire medical profession. They have blinded them. They cannot see it. Our struggle to get them to see it continues.

MM: How did the Bangladeshi essential drugs program come about?

Chowdhury: It took almost 10 years starting from the independence of Bangladesh to get to the point where we started producing drugs. By June 1981, GK began production of the first drug. Because many small factories produce drugs, we determined that ours had to be on par with Europe and America. There should be no flaws in the quality at all. Second, since it was very cheap, we committed to sell it cheaply.

This led us to develop a national drug policy. An opportunity came when I was made a member of a national policy expert committee for drug policy.

When I told them how cheap we could produce the drugs, even our expert committee members did not believe me. I had to show them everything. But the problem is that the multinationals paid everybody. Finally, the committee said, "Look, we cannot take responsibility for publishing all of these things. We'll sign it and you type it, and then you bring the copies." This was probably the only policy where the multinationals did not have an advanced copy. That is probably why Bangladesh had a national drug policy. If the multinationals had had the advanced copy, I don't think Bangladesh would have had a national drug policy.

The Bangladesh national drug policy is a very interesting document. It is a very short policy. We are a Third World country. There is no use pretending we are Britain or the United States -- we are not doing the basic research. So what was our criteria for determining drug approval? Two things: what the World Health Organization (WHO) says, and what the currently published British and American university textbooks say. Technically and scientifically, you cannot object to that.

We made a very simple recommendation. If the drugs were bad for the United States, then they were bad for us. We don't need to debate that any further. If they say a drug is good, then we have to see if there is a cheaper alternative or not. If not, then okay.

The essential drugs policy was originally for the whole nation -- rich, middle class and very poor alike. If it is a bad drug for the rich, it is a bad drug for the poor. If a drug is not available for the essential drug list, it is not available otherwise. Under the essential drugs policy, by definition drugs are an essential commodity. If it is not essential, then it should not be on the list. So that is the main difference between Bangladesh's drug policy and other countries' drug policies.

That's why our policy was very successful. We eliminated bad drugs with this very sweeping policy very quickly. In two months time, we eliminated 2,000 drugs. If it's a bad drug, it should be eliminated immediately. You cannot use it otherwise or export it. Many multinationals wanted to re-export the banned drugs. We said no, they had to be destroyed here.

We had tactically designed criteria to control the multinationals.

Under the essential drugs policy, the multinationals can make any of the essential drugs except two kinds -- vitamins and antacids. These were earmarked for the national companies. The multinationals could make vitamin injections, because they require more investment and are more complicated to make. By taking out a chunk of their business, we forced the companies to compete against each other. In those days -- the 1980s -- multinational companies very cleverly designed the way they controlled the market. They operated like a monopoly cartel. One group like Rhone-Poulenc produced gastrointestinal drugs, Pfizer would produce chest infection drugs and Hoechst would produce something else. They would not step on each other's markets and so they could control the price. But now they had to compete.

MM: How did the U.S. government respond?

Chowdhury: The U.S. government tried to stop it. George Bush Sr., who had stocks in the drug companies, was vice president at that time. They called the Bangladesh president. Any Third World president would be delighted to meet the U.S. president or vice president. We briefed him and warned him that he would be pressured. He could not believe that Bangladesh would be pressured for a national policy like this.

The U.S. government pushed our government to accept an evaluation committee from the United States. The president had no choice. He had to agree to that and other things. When the team arrived in Bangladesh, we asked the health minister to provide the c.v. of all the members of the evaluation team. We told him before getting the c.v.'s that if any of them came from a multinational company we were not going to meet with them. We would accept the committee if they came from the FDA or the National Academy of Science or anybody recommended by our allies. But all of them came from the drug companies.

The essential drugs policy cut down on the number of bad drugs, useless drugs and concocted drugs because it became easier for the country to control the quality of the drugs. Of the entire essential drugs list, maybe 3 percent come in combination. That makes testing for quality easier, especially for Third World countries like Bangladesh which have a small budget for authorities who regulate drugs. So the policy improved the quality of the drugs.

Overnight, people also realized that the price of the drugs had fallen by half. That was a shock. Better medicine at half the price.

MM: How did the multinationals respond to the policy?

Chowdhury: The essential drugs policy came into being in 1982. It took the multinationals a year to respond and they took a year to organize. But it was terrible. There were attempts on my life. There were attempts on my daughter's life. Our factory was burned. Newspapers were bribed to conduct character assassinations. The same editorials were published by the right, left and center newspapers. These things went on and on.

The drug companies threatened to leave Bangladesh en masse. In those days, they controlled 84 percent of the market. It was a dangerous situation. Did we want the Indian companies to come and take over?

I worried about that, but I began to realize that they were just trying to twist our arms. I am not an economist, but common sense suggested they would never leave us and lose our market

But the government was also worried. The multinationals had also pushed the American, British, Dutch and German ambassadors together to pressure the Bangladesh government to withdraw the policy.

When the Bangladesh president visited America, we organized some American scientists to see him. He got the impression that the American government might have been pressuring Bangladesh, but that many Americans were with us. That gave him courage. And Bangladesh was behind him.

After a while, national companies realized their own benefit, because they were producing the antacids and vitamins. All of a sudden companies with a market of $100,000 shot up to $1 million. They also realized that the same capsule-making machine could make anything. All sorts of antibiotics and other drugs.

But the country had also instituted a drug pricing committee. We said we want drug companies to make a profit, but profits should not become a sin. As I mentioned, the real purchases are made by doctors, who are not concerned about the price or economics of drug production. That's why we thought government had the responsibility for the pricing of the drugs. In the case of America, big buyers like insurance companies and hospitals have bargaining power and negotiate prices. In Britain, the government is a major buyer. In Europe there is also a pricing policy.

In Third World countries, capitalism is not that developed. A state has a much bigger role to play. If we want to help the poor, even the literate people, the state has a role in price control. We want to give the companies enough incentives to make drugs without exorbitant profits.

We went for a very basic rule. The pricing policy determines the price for the packing and the raw materials plus the markup. As a result, local companies make the same amoxycilin at the same price. If it is the same drug, regardless of who makes it, it should be the same price. It can be less, but not more. As a result, national companies benefited.

Multinationals realized they had to fight back with aggressive marketing and more rational drugs. They began to compete among themselves for off-patent drugs. All of them benefited.

In 1982, our market was just $40 million. Today, it is over $700 million. No other industry experienced such growth. Population-wise, in those days only about 10 percent had access to modern medicine. Today, more than 45 percent of the people have access to modern medicine.

MM: How did medical professionals respond to the essential drug policy?

Chowdhury: The medical associations vehemently opposed it. That is a sad part of the story. They worked hand-in-hand with the multinational pharmaceutical companies. It took them almost 20 years to understand that the policy was a good policy. Now they have begun to support it.

MM: What is the current status of the program?

Chowdhury: The original policy is only 60 percent intact. The major mistake made by the government was to put only some drugs under price control, following the policy in India. Only the most frequently used drugs were put on the essential list. That was a mistake. Every drug is an essential drug. If you are the one AIDS patient, that type of drug is an essential drug. So there cannot be two types of drugs. If some vitamin is really needed for eyesight or something, it is an essential drug. It is not cosmetic.

What is happening is that the most-frequently used drugs are under price controls. Those prices continue to decline. For drugs whose prices are not controlled, the price is decided by the companies. As a result, bigger companies are now moving away from producing the essential drugs, because the profits are less -- only 20-25 percent. But with non-controlled prices, you decide the price and can make a much higher profit.

As a result, what is happening? The pure vitamins are under price control. One out of 500 patients might need a bit of zinc, which will cost you 0.001 cent. But vitamins with zinc -- which are not under price control -- are 50 cents. Pure vitamins are normally two cents. As you have an extra profit of 48 cents, you have 5 cents to bribe the doctors, 5 cents for the newspapers and 5 cents for the politicians. As a result, you are writing the poor a brand they don't need. So that is the danger of diluting the original policy.

MM: What does the GK pharmaceuticals facility do?

Chowdhury: In June 1981, we started producing two drugs -- paracetamol and ampicillin. Today, we produce over 60 essential drugs. We produce every type of drug -- antibiotics, sterile products, IV fluids, tablets, capsules, injectibles. We are the market leader. We produce mostly poor people's drugs. In 1982 to 1986, we had a much greater percentage of the market. Now our percentage has gone down. But at the same time, every drug company has been compelled to cut their price. So we have affected the entire market. They have to explain to the doctors why GK's prices are so low. We can also provide the government with information on international market prices.

Initially, the multinationals said our drugs were poor quality. I provided the proof that our drugs are the exact same quality. In fact, ours are slightly better, so the price should be higher.

From time to time, we have faced tremendous problems. The medical profession boycotted us until 1995. In 1984, our factory was attacked by nearly 200 hooligans. But we are still in the market. We produce drugs, as well as our basic raw materials. Our market share is not that much different. We are still the number one in the country for oral rehydration drugs. We have more than 25 percent of the penicillin market. Over 200 companies share the other 75 percent of the market. But we are nowhere in the vitamin market.

MM: If you could do it, what policies would you put into law or practice to get rid of the obstacles to the distribution of low-cost, quality generics?

Chowdhury: There are two things in the policy which have never been implemented. One is the education of the medical profession. I could never convince the WHO that doctors' education is important. I don't know why. I have never seen a serious attempt by the WHO to train the medical profession to be aware of the economics of drug production, the economics of health care, and rational prescription.

Second, if I am taken into the review committee again, I will push for education of the consumers. In my experience, that works.

Here's an example. Pancreatic enzyme supplements are needed for cystic fibrosis, or for people who have lost their stomach or pancreas. But we noticed a surge in imports. Pancreatic enzyme also acts as a digestive, and the companies promote it for indigestion. This is not the real indication of pancreatic enzyme. But multinational companies create advertisements. "Have you eaten too much? Have a dose of it. It's very good. And it also makes you a bit happier."

We wasted months and months talking with doctors and trying to get them to stop prescribing it improperly.

Then we realized that when you want to fight the giants, behave like a giant. Multinationals put ads on the front page so that it catches everybody's eyes. It's costly, but very effective. So we advertised on the front page of the best-known newspaper in the country. "Has your son or daughter been prescribed with these enzymes? Has he or she lost her pancreas or had their stomach operated on? Or does your daughter have cystic fibrosis? Next time a doctor writes you this prescription, ask him why he's writing this drug."

People began sending us the prescriptions, and ringing up their the doctors, asking, "Why did you write this prescription?" The country's top physicians asked us to stop that advertisement. I said, "Not until you stop the improper prescriptions." The next month, the number of prescriptions went down by half.

That's why I say, "Educate the consumer." Nothing would be more effective. They may be illiterate, but they are intelligent. If you talk in their language, they will understand.

MM: How has the essential drug issue played out internationally?

Chowdhury: Essential drug policies have spread internationally, but I'm not really happy with it, to be honest. It's treated as a second-class medicine. Every country has two lists -- essential drugs and other drugs. It's too bad that, after 25 years, we still don't have an understanding of the definition of essential drugs.

It happened because the multinationals have very cleverly penetrated the WHO, as I mentioned before. The worst has happened with Gro Brundtland. Before she became the director general, in her candidacy speech she said many things I have said. She said "health before profit." Today, she does the opposite. Private-public partnerships occupy most of her time.

I'm not against talking to the pharmaceutical companies, but I don't want them to sit with me when making policies. So long as you involve them in making policy decisions, you cannot make any policy which would benefit the masses.

MM: What is the People's Health Assembly?

Chowdhury: By 1985, it was becoming clear that the WHO was shifting because of the pressure of multinational companies and the U.S., which in those days paid 25 percent of the WHO budget. Of course, they used to get 40 percent out of it in consulting contracts and so on, but they paid 25 percent. Britain, Japan Germany and so on paid another 15 percent, so they had total control.

In 1985, we tried to talk with Halfdan Mahler, who was then the director general of the WHO and was of the people, as witnessed by the Alma Alta Declaration [a 1978 declaration which set a goal of health for all by the year 2000] and other things that happened while he was director general. The Alma Alta Declaration supported horizontal, community-based work. It gives power to the people. I asked Halfdan Mahler to do something about the WHO's shifting perspective away from the principles in the Alma Ata declaration.

But in high offices you are handicapped. He was trying to make us happy, but also tried to create some balance. As a result, he did not achieve things. We realized that we would not achieve healthcare for all by the year 2000.

In the 1980s, we thought we should have a People's Health Assembly.

We finally started in 1997. We decided to hold it in a country where there were positive things going on. In Bangladesh, two positive things were going on: we have a national drug policy, and we have very good community programs. Though we are a Muslim country, we, especially at GK, have promoted women's role.

In 1998, Gro Brundtland said she would come, but unfortunately at the last moment she opted out.

Representatives from 94 countries came [see "People's Health Assembly," Multinational Monitor, January/February 2001]. There were 1,453 people in attendance. It was locally organized. It did not involve management agencies or five-star hotels. Our president and prime minister did not come. But the opposition leader came.

It was a very good meeting. For almost a week, we discussed the problems of healthcare, nationalities, costing, the problems faced by tribals and other indigenous people, various forms of discrimination, family planning, the effects of globalization, domestic violence and the lack of awareness about it in the medical profession, state violence, aging populations.


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