A full-blown debt crisis - Essay Example

The type of structural adjustment programs recommended (or imposed) by the World Bank and IMF began around 1980 after a number of countries in Africa, Latin America, and Asia experienced balance-of-payment problems. Governments that had borrowed heavily found themselves short of foreign exchange to buy imported goods for direct consumption and for investment in industry and agriculture. A full-blown debt crisis had arrived. Firms that distribute medicines also frequently deal in veterinary products, fertilizers, pesticides, chemicals, cosmetics, foods, soaps, and other classes of products extending into many aspects of daily life.

When oil prices increased again in 1979 a world recession occurred and world interest rates rose sharply. These companies may also be associated with the production and especially with the marketing of all types of medical supplies and hospital and scientific equipment and apparatus. One serious problem concerning the drug industry in developing countries is the enormous proliferation of products, brands, and trade names. In countries where a few hundred different drugs are really needed, thousands or tens of thousands of different pharmaceutical products are marketed, often with little regulation.

Immediate consequences of mandated reforms were low or negative growth, increased unemployment, and reduced government services. An early target of reduced government expenditure was the social sector, including health and welfare services. Adverse effects of such changes on welfare and health, particularly of the poor, have been profoundly and frequently criticized, often on ideological grounds. In an editorial, the British medical journal Lancet observed that The World Bank is an easy and satisfying target for those concerned with the effects of development aid on poor-to-middle income countries.

The majority of drugs marketed by transnational corporations are those developed for the health problems and marketing patterns of the much larger markets in wealthier countries. While many billions of dollars are spent on pharmaceutical research, the actual medicinal needs of the people in the developing countries (which together account for only 14% of world consumption) may not be properly represented. The United States alone, with 5% of the world's population, is said to consume more than twice the total amount of pharmaceuticals used by 75% of the world's population.

At the same time developing countries often pay a premium for their drugs, and pharmaceutical companies often sponsor meetings and conferences and provide incentives to physicians to use expensive new products. Some countries, such as Pakistan, have attempted to promote the use of cheaper generic products by abolishing trade names, but such regulations are difficult to enforce and may lead to a thriving underground of smuggled branded drugs. The Action Program on Essential Drugs (DAP) was established to support countries in developing national policies for the rational use of drugs.

The DAP seeks to ensure that people are able to obtain the drugs they need at the lowest possible price; that these drugs are safe, effective, and of high quality; and that they are prescribed and used rationally. Many developing countries have adopted model pharmacopoeias in order to save money on imported drugs and eliminate unnecessary and irrational combinations, such as mixtures of antibiotics and vitamins popular in some regions. A large literature has evolved from these experiences, emphasizing the wasteful aspects of inappropriate purchasing, poor management, quality control and security, unnecessary prescriptions, and poor patient compliance.

Counterfeit drugs are also a problem in both developed and developing countries. In one study done by the DAP, 53.4%of samples collected in Myanmar and 26.4% in Vietnam were unregistered and drugs imported through unauthorized channels were found in the markets. Some drugs were similar in color, packaging, and imprints to standard products