Developing a sense of responsibility

The health crisis in the developing world has many complex causes, says a new report by Oxfam, VSO and Save the Children, including poverty, poor nutrition, persistent under-investment in health systems, war and the high price of medicines.

But tackling disease depends on appropriate social and economic policies, which in turn require long-term strategies and solutions.Governments of developing countries need to develop and expand their health systems and ensure that services are accessible to those who most need them. Medicines alone are not enough if those who need them cannot afford them or have no access to them, says the report, 'Beyond Philanthropy: the pharmaceutical industry, corporate social responsibility and the developing world.'

While acknowledging that the pharmaceutical industry is not responsible for building health systems in developing countries, Oxfam, Save the Children and VSO believe it should ensure that its policies and practices support the fight to health in the developing world. Less than 10% of world pharmaceutical sales are to developing countries, (figure 1), and only 10% of global r&d expenditure is directed at diseases that account for 90% of the world's disease burden (figure 2).

According to the report, corporate social responsibility (CSR) policies should govern companies' core business activities in five key areas: pricing; patents; joint public private initiatives (JPPIs); r&d; and the appropriate use of drugs. The report offers benchmarks against these critical policy areas to enable the performance of a pharma company to be assessed.

Pricing is the area where companies can have the greatest impact on the health crisis, says the report. Lower prices could improve the long-term health of people in poor countries without significantly affecting industry profitability, provided that certain safeguards are in place. It advocates a global tiered pricing system that would incorporate 'pro-poor' policies, segregate the world's markets and bring long-term, sustainable and substantially reduced prices to all developing countries. The system should be managed by an international public health body such as the WHO.

The report acknowledges the role of patent protection in enabling drug companies to recoup their r&d costs, but believes that the system that has evolved in industrialised countries is inappropriate in poor countries and poses real threats to public health and industrial development. And although the TRIPS agreement allows countries to bypass patents by compulsory licences if necessary, in reality poorer and smaller countries lack the manufacturing capacity and legal resources to use the safeguards.

Increasingly, the pharmaceutical industry sees JPPIs as the most effective vehicle for fulfilling its responsibility for increasing access to health in developing countries, says the report. However, it suggests that JPPIs alone may not be the most appropriate response. 'We believe that public and private sector players need to take a critical look at the nature of the drugs involved and the long-term support needed before developing new administrative programmes.

'More accountability and transparency are needed so that the impact of JPPIs both on poor people's access to medicines and on broader health systems can be assessed.'

public funding

The report admits that the limits to the return on investment mean that industry alone cannot be expected to finance the funding required to research and develop drugs for diseases that affect solely developing countries - a substantial increase in public funding is also required. But the industry can make a significant contribution with its expertise in research and its ability to bring a drug to market. 'Companies can also contribute to r&d by taking off patent, or donating knowledge on a product which they have no plans to develop but which could be used by another company to develop a drug for an infectious disease,' the report says.

Inappropriate use of medicines is a particular problem in developing countries with weak national laws and regulations concerning the use of drugs. The report urges companies to encourage appropriate use of medicines by following rigorously internationally accepted guidelines, notably those laid down by the WHO.

It recognises that there have been considerable changes in the last year and welcomes the industry's focus on infectious diseases in developing countries. But it urges the adoption of a new definition of CRS that includes policies in the five key areas.

Disability adjusted life years (daly)

Figures for disability adjusted life years (daly) are estimated for 2000. One daly can be thought of as one lost year of "healthy" life and the burden of disease as a measurement of the gap between current health status and an ideal situation where everyone lives into old age free from disease and disability