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Abstract

Many Africans lack access to essential medicines. There are myriad reasons for this: poverty, lack of awareness about the need for treatment, confusion over which drugs to take, technical and logistical challenges in procurement and distribution combined with a general lack of local healthcare staff and infrastructure, among other cultural and political factors.

One additional problem is the relatively high price of drugs, which the international community has prioritized by encouraging competition from various generic producers often through compulsory licensing. The latest cost-reduction strategy is the push for local drug production. But, as shown by the start-up problems of Quality Chemicals Industries Limited in Uganda, many burdens and barriers to access continue to seriously hinder the success of such enterprises. Indirect government subsidies to exporters selling into African markets, and pressure by donors and lobbyists on innovator producers to offer developing countries subsidized prices, actually undermine the competitiveness and viability of these nascent firms. Furthermore, the focus on drug pricing and local production can actually undermine the overall aim to increase access to medicines.

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Roger Bate is the Legatum Fellow in Global Prosperity at AEI. Emily Putze is a research assistant at AEI. James Taylor is a graduate student at Columbia University (SIPA). Richard Tren works for Africa Fighting Malaria.