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PHARMACEUTICAL MARKETING CODE WILL BE SUBJECT OF WHO-SPONSORED MEETING IN 1985; WORLD HEALTH ASSEMBLY ACTION VIEWED AS FIRST OFFICIAL MOVE IN CODE DEVELOPMENT

Executive Summary

The World Health Organization (WHO) will sponsor a meeting in 1985 on pharmaceutical marketing practices in Third World countries. On May 17, the closing day of the 37th World Health Assembly in Geneva, Switzerland, the Member States adopted a resolution calling for WHO to "arrange in 1985, a meeting of experts of the concerned parties, including govt., pharmaceutical industry, patients and consumerist organizations to discuss the means and methods to ensure rational use of drugs, in particular through improved knowledge and flow of information and to discuss the role of marketing practices in this respect, especially in developing countries." WHO is required to report on the meeting's results at the 39th World Health Assembly in 1986. Entitled, "Rational Use of Drugs," the resolution was introduced by the delegation from Sweden, with support from the other Scandinavian countries, Denmark and Norway. The resolution was adopted in cmte. by a vote of 100 to 1. The U.S. was alone in opposition. The delegations of Japan and West Germany abstained. The resolution surfaced during discussion of the WHO Action Program on Essential Drugs & Vaccines and was put to a vote after several days of working group negotiations. Both opponents and supporters of the resolution view the meeting as a step toward implementation of an internatl. marketing code for pharmaceuticals. In a release issued the same day, Internatl. Federation of Pharmaceutical Mfrs. Assns. (IFPMA) Exec VP Richard Arnold declared: "The authors of this resolution approved today have made plain their view that the proposed meeting is but the first step towards controls that would further regulate all aspects of the industry's activities, including research. Such a development would do great harm to the very populations the consumerist groups believe they are helping." Health Action Internatl. Used Film And Exhibit To Promote Drug Marketing Code Arnold had earlier addressed the cmte., reaffirming industry's support of the essential drugs program, the WHO certification scheme, and its commitment to continued monitoring of the IFPMA code of pharmaceutical marketing practices. Members of the activist health arm of the Internatl. Organization of Consumers Unions (IOCU), Health Action Internalt. (HAI), lobbied strongly in support of the resolution. In its daily bulletin distributed at the meeting, HAI said the proposed conference would "directly parallel the 1979 WHO-UNICEF meeting on infant and young child feeding which developed the internatl. code on the marketing of fresh milk substitutes adopted by the 34th World Health Assembly in 1981." At the assembly the group actively publicized support for a code. HAI held a reception for delegates to unveil a new IOCU exhibition, "Drugs and the Developing World," to premier an OXFAM film on marketing of medicines in the Third World entitled, "Hard to Swallow." The Netherlands delegation criticized the resolution for not specifically addressing the issue of an internatl. marketing code. It drafted an amendment calling for the placement on a future agenda of the internatl. conference of drug regulatory authorities of a "review of the effectiveness of the IFPMA code for the marketing of pharmaceutical products and of its application in the Member States. . ." The European Economic Community countries and the U.S. had expressed support for the amendment, agreeing with the Netherlands that the additional cost of a separate meeting was unjustifiable and that use of the regulatory officials' forum could possibly help depoliticize the sensitive issues inherent in the discussion of marketing practices. Opposing the Swedish proposal, U.S. delegate Stuart Nightingale, MD, FDA Associate Com. for Health Affairs, said: "We see no need for WHO to expend its useful capital by getting involved in commercial practices which are outside its area of responsibility." He maintained the conference "would be nonproductive and, worse, disruptive" to the essential drugs program at this time. The Netherlands amendment subsequently was withdrawn, following an explanation by a spokesman for the WHO director general on how the meeting would be planned. As the first step, the director general would convene the WHO executive board to work out an agenda with the participants and to develop a cost estimate and method of funding for the meeting, according to the spokesperson. WHO will have to solicit funds to cover the cost of the meeting, the spokesman said, and the approximately $250,000 necessary would not be taken out of the budget for the Action Program. In addition, extra staff would be needed for organizing the meeting, which he estimated would have at least 150 participants. The Swedish delegate has already pledged his country's support. The assembly also adopted the executive board's report on the progress of the essential drugs program with a resolution that WHO continue working with Member States in implementing natl. drug policies. In an update on the Action Program, the project's director Ernst Lauridsen, MD, stated: "Discussions and negotiations with the IFPMA and individual member companies have been stepped up in an improved climate of collaboration. Technical and financial support for the Action Program is increasing, and it is expected that this trend will continue. Both Bangladesh and Haiti are under consideration for support from the IFPMA under its offer of drugs at favorable prices." PMA Funded Study Of Regulatory Controls' Effect On Developing Country Industries: "Proactive" Efforts PMA was represented at the meeting by VP-Communications Frank Fowlkes, VP-Internatl. Jay Kingham, and Asst. VP-Internatl. Paul Belford. The assn., which predicted at a recent press briefing that the marketing code issue would come up at the World Health Assembly, has been trying to convince the U.S. drug industry that it is facing a well-organized and financed challenge to the free-enterprise approach to pharmaceutical marketing. At PMA's annual meeting, President Lewis Engman urged the assn. to take the offensive in the internatl. health policy area. As part of its "pro-active" approach to the pharmaceutical code issue, PMA funded a study of the effect on pharmaceutical supplies and production of regulatory and economic intervention by developing countries. The study looked at India, Brazil, Argentina, Mexico, South Korea, and Pakistan. According to the study "South Korea, by loosening its price control policies and by admitting foreign ownership to its industry, was able to improve supplies, and greatly improve exports in the pharmaceutical sector." Drug "supplies were also greatly improved in Argentina when that govt. relaxed its pricing policies. Equally important, the relaxation of price regulations was followed by substantial increases in capital investments and production capacity." In contrast, the study maintained, "in Brazil, India, Mexico, and Pakistan, price controls, combined with other regulatory constraints and increasing production costs created strong disincentives for production of certain pharmaceutical products. Both internatl. and domestic firms responded by cutting production for product lines for which there was low or negative profit. In each case there were severe and documented shortages."

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