The antibiotic road to poverty

Think you pay too much for prescription drugs? An interesting study released today in PLoS Medicine, an online journal, offers a bit of global perspective: For tens of millions of people around the world, buying a basic drug like the antibiotic amoxicillin is a road straight to poverty. 

The authors of the report took the cost of four basic drugs used to treat fairly ordinary conditions — diabetes, high blood pressure, asthma, and bacterial infection. Using pricing information from 16 lower- and middle-income countries, they calculated how poverty rates would rise after patients purchased the drugs. The results, while not terribly surprising, do provide a blockbuster portrayal of what we’ve long known anecdotally. Buying brand name amoxicillin, for example, would push an additional 34 percent of Uganda’s population into poverty levels of less than $1.25 a day. Even middle-income Indonesia would see an additional 39 percent of its population become poor from purchasing the drugs.

What’s to be done? One answer has been the creation of consortiums to donate and subsidize the purchase of drugs, but that system isn’t without drawbacks either. Another forthcoming study, one of whose authors is FP contributor Roger Bate, finds that corruption in the donated drug industry sees a solid percentage (6.5 percent in the study) of the anti-malarials sold off onto the market, rather than going to the government clinics where they were sent. 

Of course in many ways, these studies are two sides of the same coin. Medicines are too expensive for their consumers in many a country — and hence, the profit from selling them is (in relative terms) enough to entice people to put their medicine up on the black market. Want one more externality? Fake drugs. Patients in desperate need of a pill are susceptible to the temptation of a cheaper version — even if it’s not guaranteed to be real.