9:21 AM Nov 23, 1995


Geneva 22 Nov (Chakravarthi Raghavan) -- The World Trade Agreement, and arrangements as those under NAFTA and the European Union and the European Economic Area (EU/EEA), are likely to have significant impact on national health goals, raise drug prices and strengthen private TNC monopolies says a new report which asks the World Health Organization to sponsor a study on the impact of trading arrangements on health-related goals.

The report, calling for actions by international and multilateral organizations, national governments, health professionals and NGOs, is by the prestigious Dag Hammarskjold Foundation of Uppsala, Sweden, and published in its journal Development Dialogue.

Based on six country stories -- relating to Norway, Sri Lanka, Bangladesh, Australia, India and Mexico -- and their experiences in primary health care and national drug policy, the report presents a Strategy Paper on making National Drug Policies a Development Priority.

One of the important lessons of the six country stories, the Development Dialogue says, pertains to the international setting and policy context in which National Drug Policy is situated and the environment for its sustainability.

Some recent trends and developments -- trends towards globalization and homogenisation of the world market, emergence and strengthening of international actors and the new World Trade Agreement -- have acquired an "extraordinary importance" and not only influence national policy-making in many direct and indirect ways, but "they severely limit the scope of state level action in ways virtually unknown before".

The new GATT/WTO agreement leads to erosion of sovereign decision making power of national governments in respect of intellectual property rights, control over drug prices, tariffs and duties, subsidies for health-care system and scope of public intervention in the pharmaceutical market. Similar will be the likely effect of NAFTA and the new economic ground rules for homogenous policies within the EU while eroding autonomy.

An analysis of the National Drug Policies (NDPs) of the six countries studied show that the greatest threat to their advances through NDPs -- whether in promoting essential drugs or encouraging a strong domestic pharmaceutical industry -- "are represented today by the GATT/WTO, regional trade and economic compacts and the global trend towards harmonisation which can have some positive features in the areas of drug regulation and resource sharing, "but can have extremely deleterious effects on national health programmes, social welfare schemes and NDPs".

"The new global trends may have the effect of removing constraints placed upon pharmaceutical TNCs by countries in respect of their price excesses and unethical practices. There are not guarantees or sanctions in place to prevent a removal of these constraints, especially in many Third World countries."

"This," the DH Foundation report says, "represents a loss of public control over access to drugs, their prices, and marketing practices and, not least, a loss of consumer protection within the relationship between the patient, industry and the medical profession. This is a particularly regressive development -- and a threat to NDPs -- that the international community as well as national governments must do their utmost to counter effectively."

In recommendations addressed to international and multilateral organizations, the report says that although the principal focus of NDPs is national, the importance of international setting, both in terms of overall economic policy environment and structure of the pharmaceutical industry and market, cannot be exaggerated.

"A hostile international environment can nullify the effort to make NDPs work. Conversely, a supportive global environment can contribute greatly to an NDP's success. The crucial role of WHO's Drug Action Programme in developing this support over the last 15 years must be emphasized.

"International and multilateral institutions and bilateral donor agencies bear a special responsibility, particularly in the 1990s, in assisting governments as well as NGOs and consumers, with National Drug Policies. They alone can bring adequate countervailing pressure and restraint to bear upon the global drug industry to contain its hostility towards NDPs in many countries..."

"As shown in India, Mexico and Norway stories, the new arrangements under GATT/WTO, NAFTA and EU/EEA are likely to have significant impact on health goals, raise drug prices and strengthen private TNC monopolies. The combined effect of these moves may be even greater.

"Therefore," says the report, "the WHO should consider sponsoring a study on impact of these arrangements, assessing the options for exceptions and exemptions in the GATT/WTO agreement for key health-related needs, especially for drugs."

In terms of national policies, where domestic pharmaceutical production is considered essential to meet NDP objectives, it should be supported by a strong quality-assurance programme.

"The possibilities of installing an independent system of intellectual property rights and patent laws should be looked into. Such arrangements would encourage innovation and lead to lower prices. In this context, governments should also work for exceptions and exemptions from the GATT/WTO agreement"

While advocating an atmosphere of cooperation (involving governments, health professions, NGOs, consumers and pharmaceutical companies) rather than one of confrontation, the report says that the experience of different countries show that the Drug Action Programme of the WHO plays a crucial role and it is more important than ever that rational use of drugs must be strengthened.

"But the recent changes in global trade policies will make it increasingly difficult to achieve this objective. Ensuring that basic health and essential drug needs are equitably met is more important than market considerations and the global harmonisation of trade. New roles for actors must be defined through an ongoing and intensified dialogue."

The report calls for priority in three areas:

* Analysis of impart of trade and harmonization initiatives of GATT/WTO, NAFTA and EU on trade in pharmaceuticals and on development of NDPs, with a view to preserving and safeguarding the well-functioning NDPs and improving the less well-functioning ones. In the new climate of world trade reforms, there is an urgent need to monitor and control unethical marketing practices, biased education programmes and unfair prices.

* Support of the WHO's Drug Action Programme, the Revised Drug Strategy and its management, with a view to enabling DAP to act as a resource base and as a coordinator of the studies and activities required to counteract the negative effects of the GATT/WTO and other trade agreements.

* An educational campaign aimed at all concerned parties, specially health professionals and consumers, highlighting the new NDP debate and what needs to be done to preserve the gains made in this area and improve on unsatisfactory existing policies.