- Tests show that legal but substandard drugs made in Africa and China have a noticeably higher failure rate
- While most drugs produced in emerging markets are of good quality, Indian and European generic drugs tend to be superior
- Companies in emerging markets that target their own population tend to be substandard
Download PDF Demand for pharmaceuticals in emerging economies is increasing and pharmaceutical companies are supplying medications to new consumers. Many developing nations, including Kenya, Uganda and Nigeria have recently developed their own pharmaceutical production capabilities and the number of licensed producers in India and China has increased significantly.
In principle, expanded drug production is good for consumers since increased competition will cause prices to fall, thereby increasing drug access and patients' welfare. However, if the cheaper drugs are not bioequivalent (act in the same way in the body) to the approved innovator products which they are copying, this trend could cause significant harm to patients.
Most research on poor quality drugs has focused on counterfeit products or failed to draw a distinction between counterfeit products and legal substandard products (Bate et al., 2010b). It concludes that the burden of poor quality drugs is acute in African nations, but also extends in smaller quantities to most emerging markets. However, few studies have addressed the quality of the legitimate drugs sold in these markets. By removing counterfeit drugs, as far as is knowable, from the study sample and subjecting remaining samples to basic quality control tests, this study tentatively evaluates whether legally produced but substandard products are a threat to public health in emerging markets.
Roger Bate is the Legatum Fellow in Global Prosperity at AEI. Julissa Milligan is a research assistant at AEI.