The
World Health Organisation has stated that the global pharmaceuticals
market is worth US$300 billion a year, a figure expected to rise to
US$400 billion within three years. The 10 largest drugs companies
control over one-third of this market, several with sales of more than
US$10 billion a year and profit margins of about 30%. Six are based in
the United States and four in Europe. It is predicted that North and
South America, Europe and Japan will continue to account for a full 85%
of the global pharmaceuticals market well into the 21st century.
Companies
currently spend one-third of all sales revenue on marketing their
products – roughly twice what they spend on research and development.
The top 10 companies are a Pfizer, b.GlaxoSmithKline, c Sanofi-Aventis, 4
Novartis,e. AstraZeneca, f. Johnson & Johnson, g.Merck, h. Wyeth,
i.Bristol-Myers Squibb, and j. Eli Lilly. The following table explains
the consumer strength of pharmaceutical by countries:
Looking
at the figures and data, it would not be wrong to say that a drug
explosion is imminent in most of the advanced countries and that it
would also spread far and wide to countries such as Laos and Myanmar.
The consumption of pharmaceuticals in the fast growing economies such as
China and Brazil has surpassed the Western economies by leaps and
bounds and such a trend would not wait to target countries like Malaysia
sooner than later.
The Malaysian scenario
The
Malaysian Organisation of Pharmaceutical Industries (MOPI) says that in
the last decade, the Malaysian pharmaceutical market grew at between 8
to 10% annually. The 2009 market size was estimated to be about RM4.5
billion for prescription and OTC medicines. The market for traditional
medicines together with health and food supplements was estimated to be
about RM3 billion. However the market still relies, to a significant
extent, on imports for innovator products.
Pharmaceutical products manufactured by the Malaysian pharmaceutical industry can be broadly categorised as:
- Health and Food supplements
Prescription
medicines comprise patented and generic drugs, the sale and transaction
of which are confined to doctors and pharmacists. OTC, traditional
medicines and health/food supplements may be sold by non-professional
outlets and sold freely to members of the public, Since 1986 when drug
registration was started, the cumulative total number of applications
received by the Drug Control Authority (DCA) as at the end of 2005 were,
16,554 for poisons (controlled medicines); 12,529 for non poisons;
28,546 for traditional medicines and 87,532 for cosmetics. As at the end
of 2005 the number remaining on the register were 3,711 for
prescription products (controlled medicines); 2,831 for OTC products
(non poisons); 1,112 for traditional medicines and 82,792 for cosmetics.
Every
medicine purchased or prescribed will have three categories to its use.
For example the most prevalently used pain killer and fever medicine is
Paracetamol.
- Generic name – Paracetamol
- Chemical name – Acetaminophen (para-acetyl-amino-phenol)
- Brand Name – Panadol (in Malaysia)
Paracetamol
is also referred in the following brand names: Aceta, Actimin,
Anacin-3, Apacet, Aspirin Free Anacin, Atasol, Banesin, Ben-u-ron,
Biogesic, Crocin, Dafalgan, Dapa, Dolo, Datril, Extra-Strength,
Efferalgan, DayQuil, Depon & Depon Maximum, Feverall, Few Drops,
Fibi, Fibi plus, Genapap, Genebs, Lekadol, LemSip, Liquiprin, Lupocet,
Milidon, Neopap, Ny-Quil, Oraphen-PD, Panado, Panadol, Panadrex,
Panamax, Paracet, Parol, Panodil, Paratabs, Paralen, Phenaphen, Plicet,
PyongSu Cetamol, Redutemp, Snaplets-FR, Suppap, Tachipirina, Tamen,
Tapanol, Tempra, Tipol, Tylenol, Uphamol, Valorin, Xcel.
Pricing
In
Malaysia, the manufacturers, distributors and retailers are allowed to
set their own prices. In India, Essential Drugs should not cost more
than twice the cost of production, and the maximum retail price and
local taxes should be included in its final printed price (Kumar, 2004).
However, in Malaysia currently, there is no control on pharmaceuticals’ prices.
The
alarming increase in drug prices has indicated the need for price
regulation. But the pharmaceutical industry often warns that any such
price control may hamper innovative research in the country. (Zaheer:
2010). However almost all research and innovation of pharmaceuticals
are done in the west. India, China, South Korea and Australia are the
only Asia Pacific countries that have this capabilities though clinical
trials are conducted at University Hospitals, Ministry of Health General
Hospitals and at selected private hospitals and clinics
(Balasubramaniam:1995). The situation has not changed much in the last
fifteen years.
Price
control affects the sale and consumption of a drug, and thus
constitutes the major influence on the expenditures. The pricing
decision is probably the single most important aspect of marketing a
pharmaceutical, yet most countries do not allow companies to set drug
prices independently. In an attempt to reduce expenditures on drugs, the
government regulated drug prices because this is the simplest means of
decreasing overall drug costs.
Grebmer
(1987) has argued pricing regulations can be found in most of the
European and Middle Eastern countries, as well as in Australia and New
Zealand. Large proportions of the Far East also regulate prices of new
products and require approvals for price increases (Wertheimer and
Grumer, 1992).
Thus
we have that many low, middle, and high-income countries control their
prices vigorously; however Malaysia, a middle-income country, does not
do so. The developed countries like US and UK have maintained a
relatively free market because of the economic gains in selling the
drugs to worldwide consumers however the developing countries like
Malaysia have little support for a free market economy because of their
minimal or nonexistent contribution in global research and development.
As such, it is difficult for the developing countries to justify the
free market for pharmaceuticals.
For
example, Paracetamol was was discovered in 1877 and came in to
general use in 1887. What kind of research and innovation can be done on
this OTC (over-the-counter) drug? However global and local firms have
done cosmetic adjustments to this particular drug and are selling in
various different forms for fever and as a pain killer. Chronic use of
this drug is known to have augmented blood cancer.
Essential Drugs
The
Drug Control Authority of Malaysia does not seem to have a level-headed
policy on how this drug can be sold and at the prices pharmacies
themselves determine. There are grave irregularities not only in the
pricing of pharmaceuticals at very exorbitant prices but a rational
National Drugs Policy has never been emanated. The National Medicines
Policy does not concur with the recommendations of the World Health
Organisation on Essential Drugs.
World
Health Organisation (WHO) has defined Essential Drugs as “those drugs
that satisfy the health care needs of the majority of the population;
they should therefore be available at all times in adequate amounts and
in appropriate dosage forms, at a price the community can afford.
The
WHO has published a model list of essential medicines. Each country is
encouraged to prepare their own lists taking into consideration local
priorities. At present over 150 countries have published an official
essential medicines list. The WHO List contains a core list and a
complementary list.
The
core list presents a list of minimum medicine needs for a basic health
care system, listing the most efficacious, safe and cost-effective
medicines for priority conditions. Priority conditions are selected on
the basis of current and estimated future public health relevance, and
potential for safe and cost-effective treatment.
The
complementary list presents essential medicines for priority diseases,
for which specialised diagnostic or monitoring facilities are needed. In
case of doubt medicines may also be listed as complementary on the
basis of consistent higher costs or less attractive cost-effectiveness
in a variety of settings.
The
compilation of an essential medicines list enables health authorities,
especially in developing countries, to optimise pharmaceutical
resources.
The list is important because:
- It forms the basis of a national drugs policy in many countries, both developed and developing (e.g. South Africa, Eritrea).
- Governments refer to WHO recommendations when making decisions on health spending
While
it is imperative that the government declare its equitable medicines
and drugs policy on how the essential drugs are administered for the
poor and needy and as to how the pricings are controlled as argued
vaguely in the National Medicines Policy it is also imperative that the
government declare openly the number of branded vitamins, cosmetics and
traditional medicines sold over-the-counter by untrained sales
personnel and also all the traditional medicines that are sold through
direct selling agencies towards a coordinated National Medicines and
Drugs Policy as recommended by the World Health Organisation.
* *
Published on Free Malaysia Today by Richard Kamalanathan, September 10th, 2012
