Biotechnology And Drugs

The rise of global trade presents new opportunities and pitfallsfor many once-poor nations largely denied economic prosperityin the past. They now compete for overseas markets in industrializedcountries—and consumers in those countries benefit fromlower prices. But globalization typically has a darker sideas well. Both sides of the story are evident in the pharmaceuticalindustries of China and India.

For years these countries have been leaders in the low-costproduction of both active pharmaceutical ingredients and thefillers that go into medicines. In China, there are now morethan 5,000 companies manufacturing low-cost drugs for domesticand international consumption. What’s more, with overseasmarkets booming, nearly half of all drugs consumed worldwidecan trace their origins to components produced in China. Thedrive to maintain these markets can create powerful incentivesto cut costs at the expense of quality. In the wake of widelyreported deaths from tainted Chinese products, such as the recentcase of heparin, foreign purchasers’ trust in the entireindustry has waned.

In India, globalization has brought different temptations. Followingon the heels of that nation’s success with productionof generics, its pharmaceutical producers have now turned toaccelerated development of innovative and patented molecularcompounds and biologics. These lucrative products offer higherreturns and the opportunity to compete head to head with Europeanproducers. Yet there are concerns that Indian manufacturersmay now lack sufficient incentive to produce low-cost genericvarieties of drugs for diseases that disproportionately burdenpoor people, both in India and around the world.

The papers that follow address these dilemmas. Sarah Frew, HannahKettler, and Peter Singer of the University of Toronto and theBill and Melinda Gates Foundation offer a vision of a biotechmarketplace that rewards innovative companies that continueto tackle diseases affecting the poor. But such a marketplace,they write, will require special incentives and "intentionalpolicies" to target investment appropriately. It’s noeasy task to get these incentives right, as Qiang Sun (ShandongUniversity) and colleagues discuss in their study of China’spharmaceutical policies. Government initiatives to reduce domesticdrug spending and increase innovation have sometimes misfired,leading to unexpected market responses felt across the globalvillage.

What's this?

Home

Current Issue

Biotech & Drugs

PROLOGUE

Biotechnology And Drugs