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Thursday, 15 November, 2001, 18:53 GMT
Hollow victory for drugs campaigners?
Various pills
Will the Doha agreement mean cheaper drugs for developing countries?
Developing countries may yet find that the victory on patent rules secured at Doha is a hollow one.

South African pharmaceutical makers argue that allowing countries to waive patent protection in medical crises - as has been agreed at Doha - won't necessarily ensure widespread access to cheaper drugs.

Most generic drug companies only want to target countries where there are patent laws, where the product has been widely marketed and they can piggy back on current demand, argues Mirryena Deep, chief executive of the Pharmaceutical Manufacturers Association of South Africa.

Few generic drug companies target markets without patent rules and it is often these countries that "experience the most abysmal access to quality healthcare and medicine in general," she said.

Media battle

The battle for provision of drugs to combat medical crises has, in parts, descended into a public relations battle between generic producers and drug companies.

If patent rules were the problem, then generic drug makers would try and sell their cheaper copies to countries where they didn't exist, Ms Deep told the BBC's World Business Report.

"The financial returns for generic manufacturers is far higher when they operate in a market where that drug is already established and known to be safe," she added. "They don't move into markets where they would have to invest in distribution and advertising."

In many cases their copies are only 10% to 15% cheaper than the patented version.

Cheap but not cheap enough?

Drugs are in any case generally sold in developing countries at cheaper prices, reflecting ability to pay.

"You see huge price differentials around the world for the same product based on ability to pay," she said.

Given that 70-80% of drug sales are to the South African state, the value of those sales account for only 20-30% of their total annual turnover.

"In practical terms, if we sold a drug to the state for one rand ($1, 70p), we would sell the same drug to the private sector for 10 rand ($10, 7)," she said. Because of mark-ups in the private sector, a customer would pay at least 20 rand ($20, 14) for that product.

Mirryena Deep, South Africa's PMA
"Patent protection usually has no effect on prices in developing world or very little"
See also:

12 Nov 01 | Business
WTO breakthrough on medicines
20 Jun 01 | Business
WTO to tackle high medicine costs
08 Oct 01 | Business
African firm wins Aids drug permit
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