Drugs

In CH 4 of his book "Making Globalization Work", Stiglitz criticizes the pharmaceutical companies for their profit seeking behavior that results in deaths of people in the developing countries. He sees how these companies try to protect their drugs from generic drugs that can be made and sold so much cheaper in the countries that really need them. He mentions the HIV drugs as an example. HIV is so prevalent in African nations that are poor. Affordable HIV drugs would save millions of African lives yet the pharmaceutical companies are not willing to provide these drugs at discount rate or allow local pharmaceutical companies to produce generic drugs there.

Pharmaceutical companies have little incentive to research for diseases that are not prevalent in the developed countries either because they won't be able to make money. They are profit seeking company after all and they need to produce profit. Drug research and development is not a cheap enterprise. It normally costs pharmaceutical companies a few hundred million dollars and 10 years to produce a drug that is marketable. It also have fairly low success rate as well. However that shouldn't be an excuse for these companies to refuse providing drugs for the poor who can be saved by these drugs.

Research and development for many disease affecting developing countries are neglected. Malaria is an example of disease that have little effects on developed nations. Between 1975 and 1996, out of 1,223 new drugs developed, only 3 were antimalarial drugs. On the contrary about 25 % of them were drugs related to heart conditions and another 25 % of them were drugs related to mental problems. Pharmaceutical companies have no or little incentives to carry out research for these diseases.

Some form of public private partnership is necessary to solve this problem. In a public private partnership, public organizations such as WHO, NIH and also private foundations such as Gates Foundations pay for pharmaceutical companies and universities to conduct research using their facilities and employees. So the incentive is there for pharmaceutical companies to produce medicine for diseases that affects developing countries.

The internatiol market as it is fails to provide medicine for too many people in developing countries.