The Right Pharmaceuticals at the Right Prices Some Consumer Perspectives

Presented by Anwar Fazal International Organization of Consumers Unions (IOCU) at UNCTAD, Geneva Switzerland, 7 September 1982.

There was a time when the consumer viewpoint was of little interest or influence – the consumer was passive and often captive. The position has rapidly changed. The consumer movement is now asserting itself vigourously as a countervailing power to ensure justice in marketplace.

This short paper will outline the nature of this new power and some of its current concerns in the area of pharmaceuticals.

The Consumer Movement

There are several thousand consumer groups throughout the world and they are directly or indirectly associated with the International Organization of Consumers Unions (IOCU) based in Hague, the Netherlands. IOCU was founded in 1960 by six consumer organisations and now represents some 120 organisations (many of them federations of consumer groups with membership in the millions) in over 50 countries.

Health and money issues have been paramount in the work of consumer groups. Early classics in consumerist literature – Upton Sinclair’s, The Jungle (1906), Chase and Schlinks, Your Money’s Worth (1927), Kallet and Schlinks, 100,000 Guinea Pigs (1930).

Yet, it was only 10 years ago, at the 6th IOCU Congress, Baden, Austria, in June 1970, when IOCU seriously discussed the inability of our economic and political system to protect the consumer from abuses of market power, frequently practiced both by international trusts and cartels and by transnational companies. The following month, IOCU’s representative to the 49th Session of the United Nations Economic and Social Council (ECOSOC) proposed that “the ECOSOC or some other United Nations body should develop appropriate international rules and machinery aimed at protecting consumers and indeed the whole economy from abuses in this expanded field of activity”.

In August 1972, at the 7th IOCU Congress in Stockholm, IOCU called for the application of consumer protection laws “not only to the home market but also to exports and the activities of multinational companies”.

The Chloramphenicol Case

As the first response to this call IOCU member organisations co-operated in a case study covering 21 countries. It was probably the first international consumer survey of its kind. The study illustrated in detail how a transnational company can and does market a drug abroad without such warnings of its dangerous and even fatal side effects as are mandatory in the home country. The drug was chloramphenicol, and the company primarily involved was Parke Davis.

The results were shocking. You could buy chloramphenicol over the counter in many countries. Of the 55 brand packs we examined from 21 countries, not one warned against all the conditions in which its use was contraindicated. Many failed to warn against serious and possibly fatal side effects. Most extraordinary of all, there were wide variations in the warning given with the same brand produced by the same companies in different countries.

The Consumer Viewpoint

IOUC interests and positions in the subject of transnationals were first fully articulated in November 1973, when Peter Goldman, then president of IOCU, made a statement before a United Nations appointed “Group of Eminent Persons”. His statement analysed some inherent contradictions between the global interests of transnationals and those of consumers, and I quote

“From the consumer viewpoint, marked concentrations of economic power and severe imperfections of competition are always danger signals. Multinational companies in consumer goods industries have readily distinguishable features. These include high profits, and strong emphasis on marketing techniques and product differentiation as alternative forms of competition.

“… Substantial disparities exist in national rules concerning company taxation, and are sometimes deliberately and competitively created by governments anxious to attract foreign direct investment. By virtue of their structure and geographic spread, multinational companies are able to settle internal transactions at prices so fixed as to produce the largest taxable profits in countries with the lowest rates of taxation. Whatever the scale of this loss of tax revenue, a consequential loss is sustained by consumers whose national governments require to impose taxes on domestic goods, services and incomes heavier than would otherwise be necessary.

“Manipulation of transfer prices may be put to other uses besides maximum tax avoidance. When a multinational’s subsidiary has a very large or dominant position in a domestic market, payments to other subsidiaries or to the parent organisation for raw materials or semi-furnished products can be artificially high, so inflating the final price to the consumer.

“Of more intimate concern to IOCU is the worldwide influence that may be exerted by multinational companies in shaping or distorting consumption patterns. They are normally held to offer advantages to consumers through increased choice and availability of products. Sometimes these goods have been developed less because the consumer needs them than because he can be induced through excessive and wasteful advertising outlays, to buy them. In the most industrially advanced countries this is not desirable. In the less developed countries, the positive disutilities, economic and social, can be grievous.”

“Particularly in less developed countries, and in respect of many manufacturing industries, consumers could gain if production and marketing were taken over by domestic enterprises supplying items and using technologies that reflected more appropriately their distinctive needs.”

Since the Chloramphenicol case study and since the 1973 statement by the then President of IOCU, IOCU has continued its research and action on the marketing and promotional activities of transnational companies.


Clioquinol is banned in Japan and the USA, but still millions of these tablets are sold every year throughout the world, marketed by many drug companies under many brand names. This alarming situation made IOCU organise a worldwide survey on the availability and instructions for use of drugs containing clioquinol. Besides a survey on the availability in the form of a questionnaire, 107 different samples from 39 countries with 32 different brand names were obtained between August 1974 and January 1975, to compare the instructions for use.

The results were scandalous.

Clioquinol was available in at least 51 countries and in 39 of them without prescription. Fifteen samples came without instruction leaflets, carrying no or only the barest information on the packets. Recommended maximum dosages varied from 400 to 1500 mg daily, and the length of treatment, from three to 28 days. Contra-indications and warnings varied tremendously. Many brands in many countries listed not a single one! None of them had them all! Some brands had widely differing, in some cases even conflicting, instructions in packets sold (and not necessarily manufactured!) in different countries. And again, it was in many Third World countries that the most inadequate instructions were obtained. One over-the-counter clioquinol drug sold in Malaysia, for instance, stated: “Even on prolonged intermittent administration, it is well tolerated by children and elderly people”. No warnings were listed, and the maximum daily intake exceeded international recommendations twice fold. One should keep in mind that all these drugs were freely available and rarely taken under a doctor’s supervision and control.

The report* was launched by IOCU in 1975 with a press conference in Geneva. IOCU’s member organisations – consumer organisations all over the world – helped to publicise the problem in their countries and to draw the attention of government authorities to these facts.

The Cost of Pharmaceuticals

The Bureau Europeen des Unions des Consommateurs (BEUC), one of IOCU’s major affiliates, has undertaken a major study entitled Consumers and the Cost of Pharmaceuticals.  This useful study showed how consumers were getting a raw deal. It was becoming abundantly clear that action by consumer groups will not lead to significant changes unless new alliances and new organisation strategies are undertaken.

It was this realisation that led representatives of non-governmental organisations from 27 different countries to hold a three-day conference in Geneva on 29-31 May 1981, and to form an international coalition, Health Action International, “to resist the ill-treatment of consumers by multinational drug companies”.

The Coalition which was described by one speaker as “an international antibody”, comprised a broadly-based network of consumers, professionals, developmental action and other groups. “Action” was the spirit and all groups expected one and the same thing - remedies, and remedies that work.

The Geneva conference was sponsored by IOCU and BUKO, a West German coalition of development action groups. Explaining the significance of the meeting in Geneva, a spokesman for BUKO, Roland Fett, stated

“Multinationals have developed skill and experience in influencing the UN system in their favour. In particular, in recent years, the pharmaceutical industry has blocked the WHO essential drugs programme and other initiatives meant to control  international trade in hazardous and useless drugs. We intend to resist such obstruction by drug multinationals through community action at the grass roots level”.

There was “extensive accord” on priorities identified by participants and those mentioned by representatives of the UN system.

In a joint statement, the conference organisers emphasised their specific concern about the activities of drug multinationals in developing countries and the commitment of Health Action international to “a sustained, vigourous and multifaceted international campaign”.

The stranglehold of the international pharmaceutical industry on the provision of healthcare was one of the main issues. The group will seek full working cooperation with all those who wished to bring about long-overdue changes in the way drugs are produced and marketed – and also withheld. Access to medicines is vital to the health of the world. If the drug industry can give such access then well and good. If not –   if the industry is to continue in its customary ways – the group’s prescription for it will inevitably cause it irritation and pain.

The conference discussed issues which ranged from the provision of traditional and alternative medicines to the risks associated with long-term, injectable contraceptives. But most criticism was about

·         Costly, high-pressure marketing and promotional methods by drug multinational companies.

·         The provision of irrelevant and inappropriate drugs, especially in developing countries.

·         The sale of vast numbers of useless or positively dangerous products.

·         Excessive profit-taking, monopoly practice and other market abuse. 

·         The provision of inadequate, often misleading information to doctors about the products they were encouraged to prescribe.

Members groups of Health Action International have addressed such issues as

·         “An end to the commercial anarchy of prescription drug competition” (for instance in India, there are some 15,000 branded drugs on sale – compared with just 225 “essential drugs” identified by the WHO).

·         An end to patent protection for essential drugs. The “essential drugs” identified by WHO “are too important to be left in a monopoly domain”.

·         The progressive replacement of proprietary brands with generic drugs – which usually cost many times less.

·         The “de-commercialisation of essential drugs” – assuring that people who need drugs get them.

·         Regional or national production and bulk-buying arrangements to reduce to an absolute minimum the cost of essential drugs.

Immediate action for the new coalition, Health Action International, have included

·         Setting up an international clearing house for information on commerciogenic disease; pharmaceutical industry structure, ownership and marketing practices; and for the coordination of consumer action campaigns;

·         The launching of an international hazardous product warning network – the “Consumer Interpol”. The aim is to encourage local groups to pressure government and industry to effect simultaneous restrictions – and to avoid the commonly-found double standards between developed and developing countries.

·         Direct actions will be aimed at the worst offenders in the drug industry which includes, publication of counter information, such as the leaflet on Lomotil released at the IOCU-BUKO conference by the British research-action group, Social Audit, confrontation at companies’ annual general meetings, and the possibility of international consumer boycotts and legal actions against “the truly intransigent”.

Health Action International  has prepared booklets on a variety of issues, including:

i.                     An International Code of Pharmaceutical Marketing Practice.

ii.                   The WHO (World Health Organization) and the Pharmaceutical Industry.

iii.                  The Rational and Economic Use of Drugs in the Third World.

The third booklet, produced in June/July 1982, takes up the most important struggle in the pharmaceutical scene today – the defence action by the Bangladesh Government to prohibit the future sale of over 1,700 drugs deemed unnecessary, useless and at times harmful.

Efforts are being made to undermine this new progressive policy of the Government of Bangladesh. The actions of the Government to remove the anarchy and dishonesty in sections of the “Pharmaceutical-Health Complex”, to eliminate “cash register” ethics, must be supported by all those who wish to support rational and equitable health and social policies in developing countries.

Consumer vigilance, an alert press, a brave and responsible medical profession, a new morality in the corporate world, affirmative action by governments and an expanded role by the World Health Organization – all Health Action International will be necessary if we are to achieve really useful things for real people in the health field.

The Bangladesh effort and its success or failure will tell us how much we really have achieved.


* “Clioquinol: Availability and Instructions for Use”, an international survey carried out for IOCU by the Research Institute for Consumer Affairs, London. Published by IOCU, The Hague, July 1975.

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