Social Issues / Critique On Aids In Africa
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Autor: anton 26 March 2011
Words: 756 | Pages: 4
There is one method of pricing called non-linear pricing, among many others. In this, the area below the demand curve (Y axis is Price$ and X axis represents Quantity demanded) is the contribution (after subtracting costs or expenses). For a price-demand combination we get a certain contribution, while the area above this rectangle is the â€œpassed up profitâ€ to customers and the area right of it is â€œmoney left on tableâ€. When these areas are big, we call it inefficient market, so to capture it as much as possible, companies do customization of prices i.e. we have different prices to suit all different customers (based on their willingness to pay). This is the theory we all agree with, and practice too (in North America); then why not supply AIDS drugs at a lower price to Africa?
The issue isnâ€™t that simple.
Typically relating our concern to AIDS drugs for Africa, would it benefit those who need it the most? Arbitrage remains a big possibility, not to forget the corruption, poor health care infrastructure, distribution network (lack of it), and theft on top of it to make the issue even more contentious. World Bank study found that, for every $100 that certain African Government spent on drugs, only $12 (1/8th) worth of medicine actually reached the patient.
â€œThe patent system added the fuel of interest to the fire of geniusâ€ none other than US President Abraham Lincoln spoke these words. Patents enjoyed permanent inclusion in the laws of the US. Europe, Japan too protect patents and commensurately we see most of the inventions originating from these places, which in turn has elevated the quality of life all over the world, though others may lag behind these nations by a few or large number of years. Pharmaceutical companies pour billions of dollars (year 2000 estimate is $27B in US alone) into research for new drugs. It takes on an average $1B and 10 years to bring a new drug to market. Not to forget that only one compound succeeds out of 10,000 they begin with. Is there a bigger uncertainty than this in any of the businesses we know? Would any one do this without the incentive of recovering this cost and making some more money to keep going?
We talk about core competency in businesses. One should stick to things which he/she has competitive advantage in doing and leave other things for others to do (who in turn are better at doing that). Thatâ€™s the mantra for survival in todayâ€™s fiercely competitive world. So why donâ€™t we leave the issue of tackling AIDS drugs supply to governments. Let drug companies do the research which they are good at and work for overall betterment of human kind. Itâ€™s any way not the issue of AIDS drugs supplies only but it is the issue of basic education, clean-safe drinking water, reach & right to basic health care, fixing the corrupt system etc, the list is too long. If willing, how a government can successfully treat its AIDS patients is shown by Brazil and Thailand. Can we repeat this in African nations? Generic drugs would cost only 1/8th ~ 1/9th (about 90% lower) of the branded one. Can we reach that $100 to the needy instead of just $12 (8.5 times/ 750% more)?
We also try to put a value on human life based on human capital approach or willingness to pay. In either methodology the value of a rich is more than a poor person. Ethically itâ€™s not at all right, but donâ€™t we also agree that survival of fittest is the law of nature and thatâ€™s how species come to life, survive and few dominate.
We value health care more when we are sick than when we are healthy. We value very dollar much more when we are poor than when we are well off. I am from a developing nation and not a born citizen of Canada. I have seen poor and poverty from a very close distance for many years. I still hold the opinion that this issue is better handled by respective governments and societies than pharmaceutical companies. However, I do think that Western & American governments must ensure that pharmaceutical companies donâ€™t exploit the situation and make obscene money. I have no yardstick to measure what is obscene and what is not, but I am sure developed governments do have resources to come to an amicable solution on this, provided they donâ€™t succumb to the pressures from pharmaceutical companies; which (to me) seems to be the trickier challenge.
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