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International Pharmaceutical Industry and Less-Developed Countries: II: Costs and Alternatives

Sanjaya Lall
Economic and Political Weekly
Vol. 9, No. 48 (Nov. 30, 1974), pp. 1990-1996
Stable URL: http://www.jstor.org/stable/4364206
Page Count: 7
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
International Pharmaceutical Industry and Less-Developed Countries: II: Costs and Alternatives
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Abstract

The pharmaceutical industry is one of the most 'multinational' modern manufacturing industries; the firms which dominate it in the developed countries also operate in almost every less-developed country outside the socialist bloc. The social importance of the pharmaceutical industry is such that in recent years it has been subjected to increasing enquiry and criticism in several countries. It is an indication of the industry's power that few of these criticisms have led to reforms in its basic structure. Part I of this paper, which appeared last week, examined the main characteristics of the international pharmaceutical industry, highlighting the anomalies and distortions that exist because of the peculiar structure of the drugs market and because of the great oligopolistic power exercised by the leading firms. The implications of the structure of the international pharmaceutical industry for the developing countries, to which many of its less desirable features are transferred wholesale, are discussed in Part II of the article published below. The additional social costs imposed on these countries by their playing host to the drug multinationals are described, using the Indian case as an example. The options open to the governments of the developing countries to reduce the cost of obtaining drugs are also considered.

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