CUT THE COST

B a r b a r a K l a s s / Pa n o s P i c t u r e s

Make vital medicines

available for poor people

Bangladesh
 Bangladesh
The already failing health care system in Bangladesh is
set to take a pounding from which it may never recover
Recent reports on the state
of Bangladesh's hospitals are
just the tip of the iceberg
Bangladeshi journalists seized on a scoop
recently that seemed to sum up the
countrys health care system that has been
in a mess, said one, for longer than anyone
can remember. The Sir Salimullah Medical
College and Mitford Hospital, which has a
potential catchment of millions of people
in the old part of Dhaka city, had been
A nurse at Dhaka Shishu
Hospital prepares a operating without 200 essential medicines
prescription for a cheap for eight weeks. It had run out of money.
locally-made medicine The media spotlight shone on the
Matthew Grainger
degenerative state of Bangladeshs health
care. A dentist had performed an appendec-
tomy. Doctors at the Dhaka Medical College
were performing 15 caesarian sections a
day with one set of instruments. Another
hospitals 36-bed post-operative ward was a
veranda where used needles and bandages
clogged blood-filled drains. Clinics were
turning away dying people because they
had no money. Inefficiencies; shortages of
specialists; scarcity of money, drugs, and
equipment the stories went on.
Oxfam interviewed patients, government
officials, doctors and nurses, hospital chiefs,
and NGOs in Bangladesh and many of them
said that, by and large, the health care
system is in a bad way. Some statistics show
marked improvement, but many doctors see
these as signs of isolated rather than overall
progress. Money is going into reforming the
health system. The most ambitious project
is a four-year health programme, led by the
World Bank, to which the UKs Department
of International Development is
contributing 55m. One of the main aims
of the programme is to improve peoples
access to medicines.
However, more and more people are
worried that any attempt to improve the
countrys health system will be undermined.
The problem, they say, is that in a few years
Bangladesh will be tied to a new global trade
rule that gives monopoly control of all new
medicines to foreign cartels, at prices that
local people wont be able to afford.
Bangladesh is particularly vulnerable.
The Northern pharmaceutical lobby is now
testing whether their competitors patent
laws comply with the WTO rule (called
TRIPs, or trade related intellectual property
rights). The testing is being followed with
threats of legal action and trade sanctions.
Bangladesh which is dependant on cheap
 Bangladesh

medicines imported from India, a country

that has the industrial power to compete

Matthew Grainger
with the big drug firms may soon find
that this cheap supply of new drugs will
eventually dry up.
Bangladesh is caught between the
imperatives of world trade on the one hand
and the health of its people on the other.
To prove it, local experts point to the way
that the countrys drug policy has gradually
moved in recent years, from one that had
been heavily-regulated by the government
to that of an unfettered free market.
Existing drugs are already a struggle for
millions of people to buy, they say, and now
Bangladeshis are dying from new strains of
disease that these drugs cant cure.
For six-year-old Asif Begum, it is literally
a matter of life and death.

Six-year-old Asif Begum needs

life-saving drugs that his family
will never be able to afford

Asif was born stunted and underweight

as are 65% of Bangladeshi babies and with
chronic kidney problems. His legs would
inflate and his eyes grow yellow, says his
grandmother, Hamina. Asifs father, now
unemployed, and his mother, who also
doesnt earn, couldnt afford to keep buying
the antibiotics Asif needed. They have two
other children to feed.
At the beginning of December, Asifs
kidneys failed again and his body began
poisoning itself. Hamina sold her one
possession worth more than a few hundred
taka ($5-6) a television set and brought
Asif by donkey, rickshaw, and on foot to the
Dhaka Shishu (Childrens) Hospital. We
have been able to save this boy for now but I injections, cries Hamina. However, even if Asif's grandmother
dont know how long we can continue, says she had money, Hamina couldnt buy Asif sold her one possession
Paediatric Chief, Professor Naila Zaman the help he needs because the germs in his to get her dying
grandson to hospital.
Khan. The now bright-eyed, impish boy is body are now immune to all the medicines
But the life-saving drugs
still in an extremely dangerous state. the hospital has to offer. His kidneys will
he needs are expensive
We have sold all our assets and we can inflame, fluid will build up, his blood and in short supply
just no longer afford the 220 taka ($4) for his pressure will rise and he will eventually

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Bangladesh
have renal failure. Im just not sure about
what to give him anymore. He has had all
the drugs available here, Dr Zaman Khan
says. He needs new drugs. Cases like Asifs
are becoming increasingly common.
We are finding more and more
resistance to existing drugs, says Dr Samir
Saha, Professor of Shishus Microbiology
Department, whose work on drug-resistance
has been published in international medical
journals. Meningitis? According to our
research, resistance is going up. Tuber-
culosis? Up! Pneumonia? Up! These are some
of the biggest child killers in Bangladesh.
Dr Zaman Khan agrees: We have recently
lost four patients to multi-drug resistance
disease. Eventually there will be new drugs
but they will be even more expensive than
the antibiotics we use now, Cefrazidine from
Glaxo, for instance, at 450 taka ($8) a dose or
Ceftriazone from Roche, at 500 taka ($9).
Very few people can even afford the
drugs we have got, continues Dr Zaman.
We ask patients about their economic
history and then we decide who can and
cant afford drugs. But I would say 70% of
the people we see cannot afford to buy
medicines. Even the cheaper versions are
often beyond them.
Dr Khurshid Talukder of the Institute of
Child and Mother Health says, We just
want the best possible answers to treat all
diseases. Simply, we must have the drugs
here when they are available in developed
countries. And they have to be affordable
for poorer people to buy.
People are often too poor to buy the
correct drugs needed to cure an illness or
cannot complete the full course of
medicines, which in turn leads to more
resistance. Is this the correct environment
for Bangladesh to sign up to a global
agreement that gives monopoly control of
new drugs to a handful of foreign
companies? asks Dr Chowdhury. I think
the people of Bangladesh could be very
seriously affected. It is an alarming and
dismal picture.
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In five year's time, Bangladesh will
be manacled to an agreement
which will cost thousands of lives
Mohammed Shah Alam produces a folder
from his desk entitled TRIPS in blue felt
pen. Shah Alam heads the WTO Cell within
the Ministry of Commerce, in charge of
administering Bangladeshs entry into the
new global order of common trade rules.
Was this agreement done for the benefit
of multinational corporations? he asks.
Of course it was. If you ever read the
negotiating history it is very clear. There is
no secret here, no hide-and-seek. No one
will deny it. This agreement is to protect the
interests of the multinational corporations.
And a big chunk of these are of US origin.
Bangladesh signed up to TRIPs in 1995
and was given 11 years to change its patent
and copyright laws to make them standard
with all other members of the World Trade
Organisation. The agreement will bind
countries into granting commercial firms
20-year monopolies on their inventions
the most controversial being inventions of
new medicines. The Geneva-based World
Intellectual Property Office (WIPO) is
currently assisting Bangladesh draft its
new patent law, but Im not aware of any
pressure being exerted on us, Shah Alam
says. We are just doing it under our
contractual obligation.
Unlike countries such as India and
Dominican Republic, Bangladesh is not
being pressured for various reasons. Firstly,
it has five more years to comply with the
TRIPs agreement and secondly, foreign
firms especially US firms do not see
Bangladesh as a competitive threat. Despite
having 125 million people, the average wage,
life expectancy and literacy rates are among
the lowest in the world; Bangladesh is not a
country that promises vast profits. Nor is its
pharmaceutical industry able to make the
raw material for new drugs, much less
discover them. Bangladesh relies on being
able to buy cheaply from India and India
has been told to rein in its drug industry.
The Indian Government is fully aware of
its obligations under the WTO TRIPs
agreement, but is unprepared to meet its
current obligations, says the lobby group
Pharmaceutical Research and Manufacturers
of America. Accordingly, PhRMA urges the
US Trade Representative to initiate a dispute
settlement action in the WTO against the
Government of India.
However, the US is keeping its options
open in Bangladesh. Intellectual property
infringement is common, but is currently of
relatively limited significance for US firms,
the US Embassy said in 1997, with the
possible exception of computer software,
pharmaceutical products and video
production. This attitude may change soon,
as it has in other poor countries like Ghana
and Uganda, where multinational
companies have already acted to stop them
importing cheaper generic drugs, which
compete with the more expensive patented

brands of medicine.
There is some appreciation here that
drug prices will go up, Shah Alam says,
but I cant say theres a big debate going
on. If drug prices rise, people will probably
start paying attention and say: Ah, why
didnt the government keep us informed?
But for now people are more focused on
[what WTO agreements will mean for]
ready-made garments and textiles.
He says that the Bangladeshi textile
industry the countrys biggest export
earner will face trade sanctions if the
country fails to protect foreign-owned drug
patents in the future. Before the TRIPs
agreement there were multilateral trade
agreements, but no single global standard.
These agreements lacked teeth and didnt
provide punishment therefore the US
brought it all under the WTO. Now they can
influence and sanction other areas of trade.
If Bangladesh does something wrong, they
will take action against our textile industry.
Its perfectly legal under the WTO. Its called
cross-retaliation.
Matthew Grainger
Dr Khalilur Rahman, Counsellor at the The lucky few can afford
Bangladesh Permanent Mission in Geneva, care in well-tended
has said publicly that drug prices are hospitals, but even this
fragile state of affairs is
expected to rise in 2005, the deadline for
now under threat
Bangladesh to comply with the TRIPs
agreement. He adds: Pharmaceutical
companies might misuse this occasion.
Under WTO rules, affordable
new medicines will become a
thing of the past
The irony is that for 12 years up to 1994,
Bangladesh had a national policy to get
affordable, life-saving drugs to the people
who needed them. The 1982 policy woke
people up to the rational use of medicines,
says Dr Chowdhury. It set a limit on the

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Bangladesh
number and type of the most essential
drugs, on the companies that would make
them, and on their price.
Drug prices were dependent on the cost
of the raw material and production. The
government did not consider advertising
and marketing costs, nor did it allow
materials to be imported at inflated prices,
he says. We got rid of everything but the
most essential drugs and were able to focus
on medical problems such as health
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education and on wiser use of prescriptions.
Instead of opening the door to 40 or 50
brands of antibiotics, the government
licensed only 10 drugs, so it could analyse
what went into them and control the cost,
he says.
It was the World Health Organisations
1975 essential drug policy put into practice
in a developing country and it worked.
People found they could get the drugs they
needed,says Dr Chowdhury. Oxfam
interviewed a foreign health expert who
advised on the Bangladeshi policy: It was
pro-people and anti-poverty, an attempt to
give people access to essential drugs. The
policy had flaws but it was strong and it was
enforced and mobilised throughout the
country. The government took on the big
drug companies and won.
Prices were forced down and the local
pharmaceutical industry thrived but under
new WTO rules on investment and intellec-
tual property, every clause in our policy
would now be illegal, said Farhad Mazhar,
head of Policy Research for Development
Alternative. Our drug policy was not valid
and it has been allowed to erode with the
advent of market liberalisation. We had a
good working policy but its clear we cant
come up with it again. We wont be able to
dictate our own standards, for our own
people, because that will be seen as a barrier
to trade, says Mazhar. Industry never
concedes defeat for ever, Dr Rahman said.
They started adopting some treacherous
paths subtly and in private Those who
knew the 1982 Drug Ordinance may now
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find great difficulty in recognising its
original form, text, and tenor. Many
deformities and changes have taken place
over the years to benefit the industry.
Academics and health workers told
Oxfam that now is a bad time for
Bangladesh to submit to an agreement such
as TRIPs, especially when the development,
distribution, and availability of existing
drugs is in disarray. Medicines are one
commodity you cant leave to market forces.
The market is simply not competent, Dr
Chowdhury says. It makes for monopolies
and cartels, not competition. And every drug
is, by definition, essential. If you have a mal-
functioning liver and only one drug can save
your life, that to you is the most essential
drug in the world. Allowing the global drug
market to be controlled by foreign firms
(with lengthy periods of patent control) is
not going to help us, he says.
Local drug firms have no innovative
technology, therefore when Bangladesh is
bound to honour foreign patents on new
drugs that could be our collapse, Dr
Chowdhury says. The impact on Bangladesh
will be huge because most of our raw
materials [for new and existing drugs] come
from India, Mazhar says. Our companies
are only pharmacies, really.
After the TRIPs agreement, Indian
companies too will no longer be able to
make and export cheap, new drugs or their
ingredients if they are under foreign
patents. However, that country believes that
the agreement will be so harmful that its
Parliament has blocked the passage of new
patent laws. India has 250 large pharmaceu-
tical firms and around 16,000 registered and
non-registered small-scale outfits. Via India,
for example, Bangladesh can buy the
materials to make the three biggest selling
and important on-patent medicines
Famotidne, Ciprofloxacin, and Norfloxacin
which sell for, respectively, 27, ten, and six
times less than in the UK. Many experts
consider this is a necessary trade for
Bangladesh, given that its annual health
expenditure per person, is just $70,
compared to $1,193 in the UK, $2,365 in
Germany, and $3,724 in the US.

Bangladeshi drug companies

know that the days of copying
new drugs and selling them
cheaply will soon be over

Dr Jiben Roy, the general manager of Square,

Bangladeshs biggest drug company, respects
the need for drug companies to profit from
the investment they have made to invent,
research, and market a new drug. However,
sometimes [these] drug companies make so
much money and charge exorbitant prices
They should compromise and fix prices so
[their] drugs are not unreasonably priced
and out of touch for people, especially in
developing countries.
Dr Roy says that Bangladeshi drug
companies like his own cant make new
molecules, but instead look for raw
materials and at the moment were not

bound by TRIPs. Square can therefore copy
any drug provided it can get the raw
materials, typically from India and
rebrand it for sale on the local market
within months. He says that Square has
been able to manufacture its own brand of
the antibiotic ceftriaxone for just 380 taka
($7) per injection, while the original brand
first marketed by the Swiss multinational
Roche cost 1,000 taka ($18).
Bangladeshi drug companies occupy an
important niche in the countrys health
system precisely because they can produce
cheap and essential medicines for supply to
local hospitals. No multinational drug
company has, for instance, ever bid at tender
to supply drugs to Bangladeshs biggest
hospital, the $14m Institute of Child &
Mother Health, because their prices are
too high, said the hospital procurement
manager. Their medicines are quality, but
their prices are 30 -40% higher than local
companies, he says. They are not interested
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in tendering to local [health] institutions Multinational drug
because we have no choice but to accept the companies are raking
lowest price. in the profits, while
people in developing
However, Square and other Bangladeshi
countries struggle to
drug companies know that the days of
buy essential medicines
copying new drugs and selling them cheaply
enough for local consumption are
numbered. Right now we are stocking up
on new material, as much as we can get.
Every company in Bangladesh is doing this
because after 2006 we will not be able to
make any new product. No one not India,
not Spain or Italy will be able to make new
materials [without paying royalties] to sell
to us.
In anticipation of this change, Dr Roy
says Square is, instead, looking for licensing

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and marketing agreements with foreign
multinational drug companies. They will
have the royalties and will get the profit,
but hopefully we will be able to market
and manufacture their product here. We
already have a licensing agreement with
Bayer to make and market two products in
their name, and we have a marketing
agreement with a discovery company,
Eisai, from Japan.
Sitting over there, they will make
their profit and we can make some money
Drugs companies
but its very obvious that when TRIPs is
in Bangladesh are implemented it will be a big setback,
stocking up on especially for developing countries such
medicines before 2006 as Bangladesh, because after that the new
For more information, visit: www.oxfam.org.uk/cutthecost
Front cover photograph: Child suffering from diarrhoea
being admitted to a hospital in Dhaka, Bangladesh
Oxfam GB is a member of Oxfam International, registered charity no. 202918
cures wont reach the poor people. They
wont be able to afford them.
It will be a real tragedy if it comes about
that way. The multinational drug companies
are making huge money. Even without the
India and Bangladesh markets it wouldnt
really matter to them. They can keep getting
their huge profits from developed countries
whose people can afford their medicines,
but for developing countries there should be
a different strategy, he says. New diseases
will come and new developments will come
too [but] poor countries wont have access [to
them]. That is for sure. We will be revisiting
Bangladeshs past, when we did not have
access to new medicines.
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