By Justus Haucap/Dusseldorf
Around the world, health security is increasingly being recognised as the foundation of economic growth. Healthy populations are better able to produce, trade, and innovate, while unhealthy populations strain public budgets and create risks that discourage economic exchange. This logic is written into countless European Union reports, and is even gaining traction in the United States, despite the “America First” approach to international affairs embraced by President Donald Trump’s administration.
Against this backdrop, the World Health Organisation (WHO), under its new Director-General, Tedros Ghebreyesus, has a unique opportunity to pursue urgently needed reforms. The WHO’s response to the 2014-2016 Ebola outbreak in West Africa was roundly judged a failure. And with the emergence of new diseases such as Zika – and the revival of old foes like bubonic plague – there is no question that much of humanity remains at the mercy of biology. Moreover, globalisation has compounded the danger by facilitating the spread of communicable diseases. A flu outbreak like that of 1918-1920, which killed between 50 and 100mn people, would be even more devastating today.
To prevent such catastrophic outcomes, we need a comprehensive approach for strengthening health-care delivery in low- and middle-income countries. In particular, these countries need help improving drug delivery and managing chronic diseases such as cancer and diabetes, which impose an immense burden on their economies.
Unfortunately, the WHO’s leadership, like much of the West, has not pursued this course of action, because it has been distracted by an ideological obsession with drug prices. But drug prices are a vanishingly small part of the problem in countries struggling to build healthy, productive societies. Of all the drugs on the WHO’s “Essential Medicines” list, 95% are already off-patent, meaning that cheaper generic versions are available worldwide.
In cases where drugs aren’t reaching people who need them, the reason is not high prices, but rather dysfunctional health systems. Fortunately, public-health analysts have identified a handful of structural reforms that would largely eliminate existing bottlenecks that are hindering the distribution of essential medicines.
The first trouble spot is infrastructure. More than half of the world’s rural population lacks access to basic health care, compared to about a fifth of the urban population. Inadequate and unreliable transportation networks make accessing health-care services costly and time-consuming, and impede drug deliveries from supply centres. With better roads and more fully developed transportation systems, emerging economies could boost not just health outcomes, but also economic and educational opportunities.
A second problem, even in areas with adequate infrastructure, is the prevalence of bureaucratic and economic barriers that limit access to essential medicines. According to a 2008 study of 36 developing countries, torturous registration and approval processes create frequent shortages of 15 of the most commonly used generic medicines. For example, in South Africa it can take up to five years for new medicines to reach the market, owing to that country’s drug-registration and labelling regulations. By streamlining drug-approval processes, removing tariffs, and simplifying customs procedures, many countries could immediately increase the availability of dozens of essential medicines.
A third problem is that there are too few healthcare workers. In many low- and middle-income countries, patients cannot get the drugs they need simply because there are no doctors or nurses to prescribe them, nor pharmacists to dispense them. According to the WHO, the world suffers from a deficit of some 7mn healthcare professionals; by 2035, that number is expected to reach 13mn. Making matters worse, there is an even greater shortfall of specialists equipped to treat chronic diseases such as diabetes, which is spreading rapidly through the developing world, owing to changing diets and habits.
Flawed – or nonexistent – health-finance schemes are the fourth, and perhaps the largest, barrier to drug delivery in many countries. Even when generic-brand essential medicines are available, they often are unaffordable for low-income patients in countries with scant state subsidies and no risk-pooling insurance mechanisms. By one estimate, almost 90% of people in low- and middle-income countries will face impoverishment if they have to pay out of pocket for a single commonly used generic drug.
Some of the countries that are most eager to strip patent protections are also notorious for skimping on healthcare expenditures. The Indian government, for example, spends just around 1% of GDP on health care, well below the 5% needed to move toward universal health coverage. But expropriating drug makers’ intellectual property will do nothing to improve outcomes where crucial safety nets are missing.
Increasing the availability of essential medicines is imperative for improving healthcare outcomes for hundreds of millions of people around the world.
* Justus Haucap is a professor of economics at Heinrich-Heine University.
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