Will Local Production of Essential Drugs Actually Reduce Access?

The New Ledger ran an editorial today from Roger Bate, a fellow at the American Enterprise Institute, that argues that local production of generic drugs in the developing world will not improve access to essential medicines. In fact, the author states that local production will undermine drug quality and lead to resistance and treatment failure.

Here’s the heart of his argument:

Having a drug industry is often a source of national pride, as well as a political opportunity; as it is assumed that politically-connected companies will win contracts from international donors to supply drugs. But with the exception of countries like India, South Africa and perhaps Nigeria, most developing countries do not have the local conditions necessary to tackle drug production. For example, India has an educated work force, a sizable local market, cheap energy and other raw material inputs, making it a rarity in developing countries.

It’s not a bad point, but I think it’s a straw man. He is essentially arguing that doing local drug production badly will lead to bad results. I’m not sure that’s much of a revelation. It’s all true that drug prices are not the only issue preventing access to medicine, but ignoring them as a fact isn’t the solution either.

Any approach to improving access to essential medicines is going to require both cheaper drugs and a health care system capable of getting those drugs out there. We learned that from generic production of anti-retrovirals (ARVs), which has been a genuine measurable success in improving access to HIV medications. Bate’s argument in the New Ledger is just a retread of the arguments used against generic production of ARVs, an argument that has been disproved in practice.