Innovation, trade and access: Three essays on medicines in developing countries
Date of Award
Doctor of Philosophy (PhD)
David C. Popp
Global health, Access to medicine, Pharmaceutical innovation, TRIPS, Trade Related Intellectual Property Rights Agreement
Limited access to medicines in developing countries remains a major challenge to improving the health of the poor. My dissertation focuses on three questions related to this problem. The first essay explores the motivations for multinational pharmaceutical firms' engagement in research and development for neglected tropical diseases. The study examines the case of GlaxoSmithKline, one of the largest pharmaceutical firms, and one of only four firms with a formal tropical disease research program. I find that both altruistic and strategic business considerations acted as motives for involvement. The company launched its research program in reaction to negative publicity emerging from a licensing dispute for antiretroviral medicines in South Africa. The company was also taking a proactive step to protect the patent systems against increasing criticisms over its failure to address the health needs of the global poor. The company's ability to engage in neglected disease research was facilitated by existing capital and the emergence of product development partnerships, which allowed the company to engage with minimal investment. These findings suggest that current incentives created to spur further research on tropical diseases need to expand the traditional view of 'commercial incentives' to account for other strategic business interests that may motivate firms to engage in neglected disease research. These findings also suggest that product development partnerships should be given greater priority in global health policy because they act as a key facilitator for engagement.
The second essay uses pharmaceutical trade data from the UN Statistical Division Commodity Trade database for the period 1996 to 2005 to accomplish two goals: to explore the role of middle-income countries, particularly China and India, as suppliers of medicines to other middle- and low-income countries; and examine the competitive effect of drug imports from these countries on the price of medicines imported from high-income trading partners. This essay represents a first step in evaluating the impact of the Trade Related Intellectual Property Rights Agreement (TRIPS) on the availability of affordable medicines in developing countries. I find that high-income trading partners are the leading source of pharmaceutical imports across all regions, but they only provide 50% of the import volume in Latin America and 43% in Sub-Saharan Africa, where India is the leading supplier of medicines. I also find that imports of antibiotics and unspecified medicaments from India and China significantly depress the average price of these commodities imported from high-income trading partners. These findings suggest that India and China are not only important as sources of inexpensive medicines but they also have an indirect effect by lowering average prices through competition. Further, the enforcement of TRIPS is likely to have differing effects on the availability of affordable medicines across the regions.
In the third essay, I used household survey data from the World Health Survey to examine the determinants of access to medicines at the household level across twelve Sub-Saharan Africa countries. The study provides empirical evidence that the majority of individuals who were prescribed medicines were able to obtain them. This is a surprising finding given the documented low availability and affordability of medicines in developing countries. The findings also show that availability may be a stronger determinant of access than affordability. As such, national policies need to be geared towards improving the procurement and reliable distribution of essential medicines that match the health needs of the population. This is particularly critical for government facilities where prices are typically more affordable but medicines are in short supply.
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Hafner, Tamara G. S., "Innovation, trade and access: Three essays on medicines in developing countries" (2010). Public Administration - Dissertations. Paper 78.