By Marcela Valente
BUENOS AIRES, Feb 26 2003 (IPS)

A law on generic medicines that Argentina passed in 2002 has led to a substantial decline in prices, which in the late 1990s were among the highest in Latin America, and in some cases higher than the cost of the same products in rich European Union nations.

The law obligates doctors to prescribe drugs by their generic name, and allows consumers to choose between all products that contain the active ingredient, based on price and quality considerations and advice from pharmacists.

”Without a doubt, the law on generic drugs approved last May significantly changed the market in many aspects, including prices,” Marcelo Pereta, president of the pharmacies division of the Buenos Aires association of pharmacists and biochemists, told IPS.

”Over the past year, the prices of the top 50 brands have dropped, a few small laboratories have gained market share, multinationals have pulled out of the country, and there have also been increases in the prices of new drugs or products that face no competition, which means it is difficult to say how much prices fell on average,” he explained.

Due to the increased competition, the cost of one drug against hypertension, which was sold under two commercial brand names, plunged by 40 percent, and something similar occurred in the case of antibiotics based on amoxicillin.

But the real drop in prices was even greater, since inflation in Argentina, in the grip of its worst economic crisis ever, amounted to 41 percent last year.

The new law smashed a monopolies on certain drugs produced by transnational pharmaceutical companies, which must now compete with cheaper nationally-produced versions.

For example, a vaccine against hepatitis B that was marketed by a drug giant with a 40-peso price tag must now compete with a local brand that sells for just nine pesos.

Since 1991, when price controls on pharmaceuticals were removed in Argentina, the cost of medicines had risen steadily. Doctors prescribed drugs by their brand name, and the prescriptions could only be used to purchase those specific commercial products, even if cheaper versions were available.

That enabled several pharmaceutical giants to gain a corner on the market for certain drugs, and raise their prices, according to a study carried out in the late 1990s by the private foundation Isalud, which offers graduate courses in public health.

From 1991 to 1999, prices rose 106 percent on average, despite the low inflation rate achieved in that period. Since the mid- 1990s, Argentina’s pharmaceutical products were among the most expensive in Latin America, and in some cases even more costly than in rich countries like Spain, France, Britain or Italy.

Ventolin, the British pharmaceutical giant Glaxo’s commercial name for an inhalation aerosol based on salbutamol sulphate, used to treat asthma, cost the equivalent of 14 dollars in 2001 in this Southern Cone nation, while the same Glaxo product sold for the equivalent of just two dollars in Spain.

In 1999, the Secretariat of Industry and Commerce compared the prices of medicines in Argentina with those of the same products in Brazil, Paraguay and Uruguay – this country’s partners in the Southern Common Market (Mercosur) trade bloc – and Chile – an associate member – and found that the drugs cost 270 percent more on average in Argentina.

A currency board held the Argentine peso at par with the dollar for a decade, until it was scrapped in January 2002, after which the local currency crashed. The peso currently stands at 3.2 against the dollar.

The collapse of the local currency and the law on generic medicines prompted several multinational drug companies to decide to leave Argentina in the past year, said Pereta.

Dr. Ginés González García, who lobbied hard for passage of a law on generic medicines as president of Isalud, was named health minister in January 2002. A few months later, parliament approved the bill.

”What we are trying to do is improve access to medication through this policy of prescription by generic name, even though we know that this will let all hell loose in the market and in terms of competition,” the health minister said at a seminar held to evaluate the new policy.

”Pharmacists cannot accept a prescription that names a commercial brand. They can only fill prescriptions that are written out for the active ingredient, while advising patients which brand to buy,” said Pereta, the coordinator of a network of more than 1,700 Buenos Aires pharmacies.

The new rules have led to a shift in the relationship between customers and pharmacies. In the past, pharmacists were simply merchants, but now they must be behind the counter to provide advice on the characteristics of each product, including aspects like possible secondary effects, he said.

The law on generics was ”an extremely important step” in a country that for years saw consumers’ access to pharmaceutical products shrink, economist Carlos Vasallo, president of the Association of Economy of Health, commented to IPS.

”People ceased to be captives of a laboratory, and can now seek out cheaper alternatives, which means the number of people with access to medicines has increased,” said Vasallo, who is also director of the Observatory of Health, Medicines and Society Research Centre.

But there is still a long way to go, especially in terms of quality controls, he stressed.

”At an international seminar I recently attended, someone from the United States told me that in his country, he felt fully confident in buying a generic medicine, but that when he’s abroad he chooses well-known brands, even if he has to pay more, because he doesn’t know how good the quality controls are,” said Vasallo.

Public universities and hospitals in Argentina have asked the state for support that would allow them to produce generic drugs only identified by their active ingredient, at lower prices than their brand-name equivalents, and to improve quality controls, in order to offer high-quality products at low prices, or even free of charge.

A hospital in the district of Hurlingham, on the outskirts of Buenos Aires, opened a laboratory this month capable of producing 70 pharmaceutical products at a cost 20 times lower than that of commercial versions available on the market. The initial investment in the new laboratory totalled less than 100,000 dollars.

The medicines will be provided free of charge to patients admitted to the hospital.

”A medication that costs 40 pesos in the pharmacy will cost us two pesos to produce here,” said the mayor of Hurlingham, Luis Acuña.

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