[Ip-health] PharmaTimes- Thai govt policies are killing local pharma, says industry

[Terri - Louise Beswick]

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Thai govt policies are killing local pharma, says industry
25 February 2010
Drugmakers in Thailand have urged the government to revoke the "special
privileges" granted to the Government Pharmaceutical Organisation (GPO),
claiming that these are unfair and destroying the domestic commercial
industry.

The Thai Pharmaceutical Manufacturers Association (TPMA) has called for
the GPO, a state enterprise under the Ministry of Public Health, to lose
its current monopoly status of medicines supplier to state hospitals.

TPMA chairman president Chernporn Tengamnuay also condemned current
moves by the Organisation to boost its production capacity to enable it
to compete with domestic commercial drugmakers, and said its policy of
importing cheaper generics than those manufactured by the local industry
for use in state hospitals would "greatly affect the ability of local
drug firms to survive."

The GPO should not be attempting to produce generic drugs in competition
with privately-owned local firms, but should instead manufacture
products which local commercial firms do not have the capacity to
produce, such as orphan drugs, he suggested, speaking at an industry
seminar.

"Private drugmakers are now very weak, due to government regulations
favouring state drug manufacturers over free market competition," said
Mr Chernporn.

Also speaking at the meeting was Witit Artavatkun, the GPO's managing
director, who pointed out that the Organisation is a state enterprise
and therefore required by the government to show a profit, and while
this requirement had previously been for 400 million baht a year, the
Finance Ministry has raised it to 600 million baht for this year.

Dr Artavatkun added that the Organisation's profits are used to
manufacture orphan drugs and deal with public health emergencies such as
the influenza pandemic, and he defended the agency's import policy,
claiming that it was aimed at ensuring fair pricing and public access to
quality medicines.

The major obstacle hindering this goal is the lack of a monitoring
mechanism for the drug pricing system, he added, and called for a new
regulatory body to be set up with this responsibility, emphasizing that
it should have particular oversight over imported patented drugs used to
treat life-threatening conditions.

Thailand's pharmaceutical market is estimated to have grown 7.7% in
2009, below the average 12.4% a year increases reported for 2004-8 but
well above the global average for last year, and will grow 5.6% a year
on average to 2019, or 7.8% in US$ terms, Companies and Markets reported
this month.

In 2008, public sector spending on pharmaceuticals reached $1.91
billion, or 54% of the total market, but almost 50% of this total was
spent for the country's five million civil servants. The remainder went
on the "30 baht" scheme introduced by Prime Minister Thaksin Shinawatra
in 2001, under which people could pay a nominal 30 baht to receive
medical treatment.

The scheme survived the country's 2006 military coup and continues to
provide healthcare to many millions of people who would otherwise be
unable to pay, says the report.

By Lynne Taylor



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