Effects of drug donations in kind debated

The effects of branded drug donations by manufacturers have been debated with claims that these "harm" the development of sustainable low-cost  drug manufacturers in poorer countries, while others note the benefit  of high-quality products targeting what are sometimes neglected  diseases. Writing in The Lancet, Brook Baker, a professor at the US  Northeastern University's School of Law, and Eva Ombaka, of the  Kenya-based Ecumenical Pharmaceutical Network, argued the case for "the  danger of in-kind drug donations to the Global Fund to fight AIDS,  tuberculosis and malaria."

The authors noted that "the issue of in-kind donations has been  discussed within [the Global Fund] since 2002, mainly at the insistence  of the private sector and certain donors." Activist groups, such as the  Health Global Access Program, of which Prof Baker is the co-chairman,  have campaigned against such donations by branded manufacturers on  the grounds of "distortion of market incentives and their adverse  effects on therapeutic options."

Specifically, The Lancet article notes that "generic companies assess  market prospects, uncertainty and risk on the basis of anticipated  costs, expected returns and a prediction about how many competitors will  enter or remain in the market." The consequence of free drug donations  is therefore potentially destructive of the development of a market in  unbranded agents, Prof Baker argued. "If donations split the market or  target specific sectors, generic entrants would be left with a small  and difficult market niche and a disadvantageous cost-benefit ratio,"  he added.