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(2005; 54 pages)
Local production of pharmaceuticals in developing countries may be seen as helping to stimulate industrial policy and/or as stimulating pharmaceutical “access” to needed medicines. However, if a developing country with manufacturing facilities is able to finish off bulk active ingredients sourced from developed or other countries at high costs, such manufacture may have no impact whatever on patient access to needed medicines. There has been some critical thinking in the past regarding whether or not small developing countries should make their own pharmaceuticals, but no recent comprehensive summary of the issues and policy options. This paper summarizes the issues surrounding “local production” from a policy and public health viewpoint. It provides four brief country-level case studies, and reviews the evidence supporting the industrial policy assumptions underlying the goal of local production. In brief, in many parts of the world, producing medicines domestically makes little economic sense. If many countries begin local production, the result may be less access to medicines, since economies of scale may be lost if there are production facilities in many countries. The document concludes by providing a research agenda specifically designed to test assumptions about local production of pharmaceuticals.