Pharmaceutical Production Policy. (MDS-3: Managing Access to Medicines and Health Technologies, Chapter 7)
(2012; 12 pages)


Policy makers must be concerned about pharmaceutical production for the same reasons that underlie other policy and legal decisions: pharmaceuticals can be dangerous as well as lifesaving. Health professionals and patients have no ready way of making judgments about medicines without public surveillance as a guide. The potential for national or local production of quality-assured, low-cost pharmaceuticals to meet national needs is an issue that has been debated and discussed for several decades. The justifications for local production have included the problems of lack of access, high prices for imported pharmaceuticals, and poor pharmaceutical quality. These challenges prompted public and political interest in considering local production to promote self-sufficiency, achieve independence from international suppliers, develop local industrial capacity, and create jobs. The changing landscape in the global pharmaceutical market, however, has made local production of pharmaceuticals in many countries unlikely as a viable option, except under certain circumstances, such as the existence of a large national market or a need to address specific requirements within a local market. Furthermore, self sufficiency in pharmaceutical supply has proved to be a myth; because most active pharmaceutical ingredients are now sourced globally, even the most developed countries cannot be considered wholly self-sufficient in pharmaceutical production.

The globalization of the pharmaceutical sector and the advent of worldwide public health funding initiatives have led to a more competitive market for generic pharmaceuticals, resulting in significant decreases in the prices of some essential medicines. Domestic production operations have had difficulty achieving the high quality expected in the market at prices that compete with those of large-scale international producers, and many countries have limited capacity to monitor and regulate pharmaceutical production activities. Decisions regarding producing or importing pharmaceuticals are complex and involve health policy, industrial policy, a country’s national development strategy, and related political pressures. Despite the argument that actual production decisions should be left to private-sector and market forces, policy makers must sometimes respond to pressures to become more involved in decisions about pharmaceutical production. The principal policy question now is often not whether to make or buy pharmaceuticals, but rather what pharmaceuticals to buy and where to buy them.

Three important points related to decision making about local pharmaceutical production guide this chapter -

  • Pharmaceuticals are potentially lifesaving and life threatening. Pharmaceutical production requires precise standards, quality control, a highly skilled labor base, capital, national regulatory capacity, and management. Modern pharmaceutical production often uses raw materials that are most economical in the international market, which means that high quality, low-cost medicines are not likely to be produced from the raw materials stage in countries that do not have the required market size and resources in terms of skilled people, technology, and quality control.
  • Section 7.1 describes several types of pharmaceutical manufacturers that operate in low- and middle income countries, ranging from subsidiaries of multinational firms to small, hospital-based operations that repackage medicines into course-of therapy packs. Policy makers must assess the feasibility for the range of production options, from the primary manufacture of raw materials to the packaging of finished products.
  • Because consumers are unable to judge medicine quality on their own, policy makers must be concerned about regulating the production quality of medicines from either international or domestic sources. Regulatory policy should focus on assuring that manufacturers who supply products to the national market follow good manufacturing practices. Whether policy makers take an active or a passive role, they must recognize that the regulations and incentives existing in a country always affect pharmaceutical production. The most constructive stance is to shape policies and regulations that promote the goal of reliable access to effective, safe, and inexpensive medicines rather than to focus on where the production takes place. If preferences are given to locally produced medicines, the sick may pay directly or indirectly for these preferences through higher prices or poorer quality.
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