Module 1:

Effective Management of Medicines

and Medical Supplies: Background,
Concepts and Situation
 Module 1 Unit 1:

Global & Local Medicine

Situation
 Objectives
By the end of this unit participants should be
able to:
• Define key terms
• Describe the current situation and global
trends for production, trade, availability and
use of medicines
• Describe the local situation and trends for
production, Access, availability quality and
use of medicines
Key terms: Brain storming (5min)
What is a medicine?
 Definition of a Medicine
• Any remedy for use in treating,
preventing, diagnosing or alleviating the
symptoms of disease.
 Key Terms (1)
• Originator/ Innovator brands: Medicines with
patent protection (original brands) and are
protected from competition in the jurisdiction of
the patent for the life of the patent e.g. Panadol
• Generic/multisource pharmaceuticals:
Products usually intended to be interchangeable
with the originator product, marketed after the
expiry of patent or other exclusivity rights and
usually manufactured without a license from the
innovator company e.g. Paracetamol
 Key Terms (2)
• Counterfeit pharmaceuticals: Medicines
which are deliberately and fraudulently
mislabeled with respect to identity and/or
source.
Components of the medicines
market
 Key Issues- Production (1)
• Medicine production highly concentrated in the
industrialized nations
o 5 countries- USA, Japan, Germany, France & UK
account for two- thirds of the value of all medicines
produced
• Small number of transnational companies dominate the
global production, trade and sale of medicines
o 10 of these companies account for almost half of all
sales
o 10 best selling drugs account for 12% of the value
of all medicine production
 Key Issues- Production (2)
Share of low, middle and high income countries in world
pharmaceutical production

Source: WHO estimates based on data reported by UNIDO, OECD

 1999 Pharmaceutical Company Reports
COMPANY TOTAL Cost of Market and R&D PROFITS
REVENUE Goods Admin
(in millions) (% revenue) (% revenue) (% revenue) (% revenue)

Merck $32,714 53.6% 15.9% 6.3% 18.0%

Novartis $32,465 20.0% 35.0% 13.1%
BMS $20,222 27.4% 22.6% 9.1% 21.0%
Pfizer $14,133 17.9% 44.9% 19.6% 20.0%
Glaxo $13,754 20.0% 35.2% 14.9%
Wellcome
AHP $13,550 27.3% 37.2% 12.8% -9.0%
Abbot $13,178 45.4% 21.7% 9.1% 19.0%
Warner- $12,929 23.5% 46.1% 9.7% 13.0%
Lambert
SmithKline $12,622 38.4% 13.1%
Eli Lilly $10,003 21.0% 27.6% 17.8% 27.0%
Schering- $9,176 19.6% 37.4% 13.0% 23.0%
Plough
Pharmacia $7,253 26.1% 38.6% 19.8% 11.0%
AMGEN $3,043 13.2% 21.5% 27.0% 33.0%
Genentech $1,039 27.4% 45.0% 35.0%
Biogen $621 17.9% 23.5% 35.6%
Data from SEC 10K filings and 1999 Company Annual reports
 Key issues- International Trade
in Pharmaceuticals
• The World Trade Organization (WTO) is the
international organization dealing with rules of trade
between nations.
• The WTO is charged with setting the legal ground rules
for international trade. Its objectives are to promote:
– non-discrimination
– progressive liberalization of barriers to trade
– predictable policies and transparency
– competition and special provisions for developing
countries.
 WTO Agreements and Health

• In joining the WTO, Members adhere to 18

specific agreements annexed to the Agreement
establishing the WTO.
• Members -144 Members (2002) cannot choose
to be party to some agreements but not others
• Of greatest relevance to the pharmaceutical
sector is the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS);
 Key issues- International Trade
in Pharmaceuticals (2)
• International trade in
pharmaceuticals represent about
1.8% of global exports
• Global exports and imports were
worth approximately US $ 104
billion in 1999
Source: WHO estimates based on data from Commodity Trade Statistics Section,
ITSB, United Nations Statistics Division, New York
 Key issues- International Trade
in Pharmaceuticals (3)
• International trade in pharmaceuticals
dominated by the high-income
industrialized countries
oIn 1999 they accounted for 93% of
global exports and 80% of global
imports by value
Source: WHO estimates based on data from Commodity Trade Statistics Section,
ITSB, United Nations Statistics Division, New York
 Key Issues- International Trade
in Pharmaceuticals (4)
• Foreign investment declining and being
shifted to middle level countries
• TRIPS reduces opportunities for imitation
and may increase prices which could
reduce markets
• Generic market has developed and
become very competitive and is a difficult
market to enter
 Key issues- International Trade
in Pharmaceuticals (5)
Share of low, middle and high income countries in world
pharmaceutical exports

Source: WHO estimates based on data from Commodity Trade Statistics Section, ITSB, United Nations
Statistics Division, New York
 Key issues- International Trade
in Pharmaceuticals (6)
Share of low, middle and high income countries in world pharmaceutical exports-
1980-1999

Source: WHO estimates based on data from Commodity Trade Statistics Section, ITSB, United
Nations Statistics Division, New York
Key Issues- Access to Essential
Medicines
What does access to essential medicine
mean?
• Availability of essential medicines
• Geographic accessibility
• Affordability
• Acceptability
Dimensions of Access to
Medicines
GEOGRAPHIC
ACCESSIBILITY

SAFE
EFFICACIOUS
ACCEPTABILITY AVAILABILITY
QUALITY
COST-EFFECTIVE

AFFORDABILITY
Key Issues- Access to Essential
Medicines
• Inequities in access to essential medicines
exist and is a major challenge
• % of population estimated to lack
adequate access to essential medicines is
less than 1% in high income, 39% in low
income & 24% in middle income countries
• % of world population without access to
essential medicines estimated at around
30% (1.3-2.1 billion people) in 1999
 WHO Perspectives on Access
to Medicines
• Access to essential medicines
is part of the fundamental
right to health.
• Essential medicines are not
simply another commodity.
 WHO Perspectives on Access
to Medicines (2)
• Patent protection has been an effective
incentive for research and development for
new drugs,
BUT
• Patents should be managed in an impartial
way, protecting the interests of the patent-
holder, as well as safeguarding public
health principles.
 Key issues- Research and
Development
• Investment in health R&D is concentrated
in the industrialized economies
• Pattern of new medicines R&D reflect
market opportunities rather than global
public health
o Only 10% of R&D spending is directed to the health
problems that account for 90% of the global disease
burden
o Redeployment of a small portion of current & public
R&D funds could make a major contribution to the
development of new medicines for neglected diseases
 Key Issues- Appropriate Use (1)
• World wide, estimated that ½ of all
medicines are inappropriately prescribed,
dispensed or sold
• Half of the patients fail to take their
medicines properly
• An estimated 2/3 of global antibiotics sales
occur without any prescriptions
Source: Hogerzeil H.V. Promoting Rational Prescribing: An International
Perspective. British Journal of Clinical Pharmacy, 1995; 39: 1-6
The Rational Use of Drugs. Report of the Conference of Experts. Geneva.
World Health Organization, 1985.
 Key Issues: Appropriate Use
(2)
Consequences
• Inappropriate use of medicines is costly &
harmful to the individual & population as a whole
o ADRs rank among the top 10 causes of death in the
USA and are estimated to cost the country between
US $ 30- US $ 130 billion each year1
• Growing resistance to antimicrobial medicines
o Resistance to primary multidrug therapy for TB from
28 countries range from a low of 2% to a high of 40%
of all cases2
1White TJ, Araekelian A, Rho JP. Counting the Costs of Drug-Related Adverse Events.
Pharmacoeconomics, 1999; 15 (5): 445-458
2Espinal MA. Epidemiology of Multi-drug Resistant Tuberculosis in Low and Middle Income

Countries. In Bastian I, Portaels F, (eds), Multi-drug Resistant Tuberculosis. Dordrecht, the

Netherlands, Kluwer Academic Publishers, 2000.
 Group Discussion (15min)
Key issues- Counterfeits
• Participants to define what counterfeits are
and discuss why it is difficult to quantify
the extent of the problem
• What can be done to address the problem
by
Health care providers?
 Key issues- Counterfeit
Medicines
• Both branded and generic products are subject to
counterfeiting
• include products with correct ingredients or
wrong ingredients, without active
ingredients, with insufficient or too much
active ingredient, or with fake packaging
• All kinds of medicines have been counterfeited
including
• Medicine for the treatment of life-threatening
conditions, expensive lifestyle medicines
and inexpensive generic versions of simple
painkillers and antihistamines
 Key issues- Counterfeit
Medicines (2)
• Extent of the problem is difficult to quantify
accurately
• Public confidence in health-delivery
systems may be eroded following use
and/or detection of counterfeit medicines
• Use of counterfeit medicines can result in
treatment failure or even death
 Key issues- Counterfeits (3)
Recent examples of counterfeit
Medicines

Antidiabetic traditional medicine: Contained 6 times normal dose of

China, 2009 glibenclamide (2 people died, 9 people
hospitalized
Metakelfin (Antimalarial): Discovered in 40 Pharmacies
Tanzania, 2009
Viagra & Cialis (for erectile Smuggled into Thailand from an
dysfunction): Thailand, 2008 unknown source in an unknown country
Xenical (Antiobesity): USA, 2007 Contained no active ingredient and sold
via internet sites operated outside the
USA
Lipitor (for lowering cholesterol); Detected in the legal supply chain
Zyprexa (for treating bipolar
disorders and schizophrenia):
United Kingdom, 20007
 Key issues- Counterfeit
medicines (4)
Factors that make counterfeiting possible
• Lucrative- manufacturing costs are very low if no
quality and safety standards are respected
• Inadequate legislation, regulations and
enforcement
• In effective cooperation among stakeholders:
Health authorities, customs, police, industry and
trade
• Lack of awareness
• Cost of medicinal products- costs of legitimate
medicines may be too high for patients, causing them
to seek high-risk ‘bargains’ in unregulated markets
(e.g. street markets or the internet)
 Key issues- Counterfeit
Medicines (5)
• Lack of political will- In some countries,
authorities not prepared to recognize the
existence or the problem or pursue counterfeiters
• Transactions involving many intermediaries-
Increase the opportunity of counterfeiters to
infiltrate the regulated distribution system
• Expansion and deregulation of trade- offer
greater opportunities e.g. through ‘free trade
zones’ to introduce fake products into official
channels
 Pharmaceutical Sub-sector in
Kenya (1)
• Estimated total market value of USD 228 million
in 2008
– Significant contributor to the economy and
key component of health care delivery
 Pharmaceutical Sub-sector in
Kenya (2)
• Important components of the sector include:
– Pharmaceutical manufacturing for local
consumption and export
– Local trade (wholesale & retail) and
international trade (import and export)
– Pharmaceutical services e.g. prescribing,
dispensing
– Pharmaceutical research and development
Local Pharmaceutical Production
(1)
• Enormous capacity for the manufacture of
pharmaceuticals for the local and regional
markets
• Local production primarily generic
medicines based
• High production costs undermine their
competitiveness thereby hampering
growth.
Local Pharmaceutical Production
(2)
• Other challenges include:
• Limited technology transfer for manufacture of
generics
• Weak regulatory environment for GMP
compliance thereby limiting access to wider
markets
• Limited pool of specialized personnel to meet
the needs of industry
• Need for provision of incentives to promote
local manufacture of essential medicines for
self sufficiency and for export
 Access- Availability and
Affordability (1)
• Significant progress made
towards ensuring access to
essential medicines
– Gains attributable to increased
government budget for medicines
and donor funding (programmatic
medicines)
 Access- Availability and
Affordability (2)
• Affordability still a challenge especially in
the private sector:
– Range of options explored to reduce prices
including promoting use of generics and
utilization of TRIPS flexibilities (parallel
importation)
– Transparency in pricing,
– Waiver of taxes and tariffs on
pharmaceutical products and raw materials
 Quality & Safety
• Sub-standard and counterfeit medicines a
challenge in the country
– Need to implement stringent regulatory measures
• National medicines regulatory and quality
assurance systems being strengthened
• Pharmacy and Poisons Board (regulatory
body) working to establish a robust QA
system
• Rigorous Post Marketing Surveillance system
• Pharmacovigilance systems to monitor safety and
quality of medicines in the market
 Appropriate Use
• Inappropriate use of medicines is a widespread
problem at all levels of healthcare in Kenya
• Systems for supporting and promoting appropriate
medicine use in the country are weak
• Prescribing surveys in the country have
highlighted a number of problems including
overuse of antibiotics; poly-pharmacy; brand-
name prescribing; and generally non-adherence to
clinical guidelines
• Strategies & initiatives to improve use in all
sectors being implemented based on the national
AMU framework
 Summary
• The global medicine situation has evolved
over time with emphasis on access of
essential medicine and promoting
appropriate use
• Key issues pertaining medicines include
production, international trade agreements,
access to essential medicines, counterfeits
• The local medicine situation has been
boosted by local production which has
improved accessibility and availability of
medicines
Thank you