US-banned drugs fetch huge profits in Latin America
American pharmaceutical multinationals are promoting drugs in Latin America that have potentially dangerous side effects, or are often useless. They market drugs that have been banned in the United States by the Food and Drug Administration and that were never licensed. Some of the multinationals market the drugs without proper warnings and at price hikes sometimes as high as 6,000 percent.
Developing countries spend 50 to 60 percent of their health budgets on drugs (compared to 15 to 20 percent in the industrialized nations).
Pharmaceutical corporations do $1.5 billion in sales per year in Latin America, with the volume doubling every five years, according to a United Nations report on the international pharmaceutical industry. Profit margins average between 30 and 50 percent.
"This type of exploitation is devastating to the people here, most of whom are poor and have no disposable income," said one Guatemalan priest, who, like all the others I interviewed in Guatemala, asked to remain unidentified.
Guatemala, like most other Central American countries, does not monitor drugs. There is no effective medical malpractice or product liability law. Companies, doctors, and pharmacists are free from accountability.
As a result, most of the poor are forced to rely on pharmacists for both diagnoses and prescriptions. Many pharmacists are not licensed, and those who are often have little medical knowledge. In each of the pharmacies lies a well-thumbed Diccionario de Especialidades Farmaceuticas,m containing descriptions of drugs sold in Central America. The descriptions are provided by the drug companies and often vary significantly from descriptions of the same drug in the US.
"What happens," said an executive from a Swiss pharmaceutical firm in Guatemala, "is that a lot of doctors own their own pharmacies, or at least get a share of the profits, and a lot of the drug companies give bonuses if you buy certain drugs from them." The result is that the best-selling drugs are not always the safest or least expensive.
There are more than 100 drugs available in Central America that have been banned or severely restricted in the US. Chloramphenicol, an antibiotic reported by medical researchers for more than 20 years to cause fatal blood disease, is marketed by McKesson Company and Parke-Davis. Parke-Davis has paid over $1 million in damages in the US for failing to warn users of side effects.
According to a UN study, "The company [Parke-Davis] could hardly claim to be unaware of the possible adverse reactions, yet it took advantage of the developing countries' lack of controls to sell its product (for which no prescription is required in many countries) as if it were wholly safe."
"Our brand of Chloramphenicol, which is only 10 percent of the international market, is marketed by Parke-Davis," said Thorn Kuhl, the manager of corporate information at Warner-Lambert. "It carries our monogram in Spanish. The description of the drug is in the Central American Pharmaceutical Directory. I understand that a great many drugs can be bought over the counter, but the reason for this is that physicians are not always accessible. The health authorities in those countries are better able to judge how to monitor these drugs than we are."
Dipyrone, a pain killer that medical researchers say can also cause fatal blood disseases, is not on the market in the US. The American Medical Association's "Drug Evaluations" states that Dipyrone's "only justified use is as a last resort to reduce fever when safer measures have failed."
One missionary nurse commented, "The drugs salesmen push that stuff like aspirin."
"We feel that we market our products safely and provide adequate warnings," Terry Kelly, director of communications at Sterling Drug Company, said. Sterling's subsidiary, winthrop, sells dipyrone. "We comply with the regulations of the particular country we are marketing in. It is our policy to remain consistent and to provide physicians and customers with detailed information regarding use and effects of our products."
Aside from drugs that are dangerous, many companies provide drugs that are worthless. "The populace has been tricked into believing that injections are almost magical," a missionary nurse said. "There is a doctor in our town who charged one campesino (peasant) $80 for injections of vitamins for a pain in his back."
"These companies cater to the avariciousness of the local doctor or pharmacist," said Dr. Joe Ray, director of the Office of International Health of the Harvard School of Public Health. "If someone is malnourished, they don't need injections of vitamins; they need a proper diet."
"There are medications being sold without proper indications or contraindications in the third world that are dangerous," said Dr. Dieter Koch-Weser, associate dean for international programs at Harvard Medical School. "These companies sell these drugs, as well as worthless drugs, for the sake of profit."
Drug sales in Central America bring a high return for these companies. A United Nations study of the Mexican drug industry revealed markups of 200 to 1, 300 percent above the going world prices, inflating costs by approximately $41 million a year.
Alonso Lucio, a lawyer in the Customs Bureau in Colombia, launched an investigation of the price hikes in 1969. He collected drug import licenses issued to 16 foreign companies and recorded the import prices declared when the licenses were issued. Some of the excesses he uncovered included: Merck, Sharp & Dohme of the US had been selling Dexamethasone to its Colombian subsidiary for markets.
Roche, a Swiss pharmaceutical company and one of the biggest drug marketers in Central America, was paying $2,500 per kilogram for Diazepam to its European subsidiary, when eight European laboratories quoted a price of only $45 per kilogram.
This overpayment returns currency to the home office in excess of profit repatriation ceilings set by the host country. It conceals the real profits these companies make in the third world. In the Peten region of Guatemala a vial of Ampicillin was being sold for $4.50, while production costs per vial are below 70 cents.
The governments in Latin America have neither interest nor the resources to monitor the pharmaceutical industry. The size and power of the multinationals mean that Latin America depends on them as employers and as sources of revenue. These companies control most of the patents and dominate the pharmaceutical field.
The United Nations Development Program (UNDP) suggests that each country make a list of its own drugs from the basic generic medicines (estimated at 150 to 200), instead of the hundreds of brand names for each drug on the market. Attempts were made in a few countries, such as in Brazil in the early '60s, to institute generic drug programs but each program collapsed.
In order for governments to qualify for loans from the International Monetary Fund and foreign-owned banks, public service expenditures must be curtailed and restrictions on foreign-owned industry must be removed. This will make control of multinational pharmaceutical practices in Central America more difficult. Efforts to institute generic drug programs and controls on the pharmaceutical industry have not met with suc cess so far.