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UNCTAD report says least developed countries in position to improve access to medicines through local production

09 May 2011

Events shaping the global pharmaceutical industry provide an unprecedented opportunity for the least developed countries (LDCs) to attract investment in the pharmaceutical sector, including from other developing countries, a new UNCTAD report contends. With the right set of policies in place, LDCs can use the local production of pharmaceuticals to help ensure greater access to essential medicines, the study says.​

 

The publication, Investment in Pharmaceutical Production in the Least Developed Countries - A Guide for Policymakers and Investment Promotion Agencies, was released today.
 
It finds that large research and development-based pharmaceutical transnational corporations (TNCs) in developed countries are facing the expiration of patents over a series of blockbuster drugs and have a dearth of new medicines in the pipeline to replace these medications. Under pressure to meet shareholder expectations, these TNCs are partnering more and more with profitable generic manufacturers in developing countries as part of a survival strategy.
 
At the same time, developing countries that have been home to large generic pharmaceutical industries that had thrived because of their ability to reverse-engineer complex medicines patented elsewhere must now offer product patent protection to new chemical entities as part of their commitments under the Agreement on Trade-Related Aspects of Intellectual Property (the TRIPS Agreement) of the World Trade Organization. As a result, generic manufacturers in large developing countries are increasingly producing for developed-country markets while entertaining the possibility of manufacturing generic medicines in countries where they can still legally produce a wide range of medicines off-patent.
 
According to the report, LDCs are poised to take advantage of these shifts. UNCTAD recommends that LDCs make efforts to ensure that public-health objectives remain central to initiatives to promote investment in local pharmaceutical production. It also counsels LDCs that benefiting from investment in this important sector depends on strengthening their own productive capacities and on ensuring a well-functioning regulatory framework for drugs - a framework in which policies and laws take on board the flexibilities available under the TRIPS Agreement. As stated in the UNCTAD country case studies, a number of LDCs - Bangladesh, Ethiopia, the United Republic of Tanzania and Uganda - have already made significant gains in the local production of pharmaceuticals. Firms in these countries manufacture a range of products from empty hard-gelatin capsules to antimalarial and antiretroviral drugs for the treatment of HIV and AIDS.
 

 

The report finds that LDCs interested in supporting foreign direct investment in local pharmaceutical production could consider measures such as reviewing procurement practices and regional options to ensure a market for locally made medicines; ensuring that factories have reliable infrastructure, especially clean water and power; investing in the upgrading of quality standards and supporting effective drug regulation; and providing for the duty-free import of active pharmaceutical ingredients.
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Downloads [PDF]: The Report