Drug costs in developing countries and policies to reduce them

Abstract

Developed countries spend on a per capita basis about 100 times as much on health and 20 times as much on drugs as developing countries do. However, drugs constitute the ‘cutting edge’ of health service activities in the developing countries. This article analyses the estimated pharmaceutical and overall health expenditures for 1981 and gives a projection of those for the year 2000. Five policy options (1. The rational choice of drugs. 2. A public distribution system. 3. The use of bulk import orders. 4. The use of generic names. 5. The domestic production of drugs) that might reduce the current and projected levels of expenditure on drugs by developing countries, without curtailing other services, are examined. Potential savings both in domestic currency and foreign exchange that could be effected by implementing each of the five policy measures have been computed in order to indicate their critical contribution.