Government urged to limit free drugs for seniors

By David South

Today’s Seniors (Canada), May 1993

Another blow may be coming to seniors on top of last August’s cuts to the Ontario Drug Benefit Plan (ODBP). Health minister Ruth Grier has been advised to terminate the policy offering free drugs for Ontario residents over 65. 

Assistant deputy health minister Mary Catherine Lindberg says the 13-page report from the Ontario Drug Reform Secretariat urges the government to replace universal coverage with a system based on income. 

The government argues that fiscal problems, a desire to make wealthy seniors pay, and a need to extend the program to the working poor has driven them to consider the move, while critics argue it will hurt modest-to-lower-income seniors. They say costs could be better contained by keeping universal coverage and attacking the source of escalating costs: pharmaceutical manufacturers and doctors who over-prescribe or misprescribe. 

Concession

If implemented, the cuts will represent a concession by the NDP on the once-sacred principle of universality. Just last year, former health minister Francis Lankin said, “I believe strongly in universality, and we’re not looking at ending it for drug coverage of seniors.”

The proposed plan calls for single people, regardless of age, who earn over $20,000 a year, and families earning over $40,000, to pay a premium of up to $300 for drug coverage. 

Those earning less than that amount will have to pay for their own drugs until they reach a limit tied to their income to become eligible for free drugs. 

The government says this changes qualifying for coverage from age to income-based. 

In a recent interview, health minister Ruth Grier wouldn’t be specific about what plan she would go for. But she agrees with the report’s authors that the drug plan needs reform. 

“While the drug plan makes drugs available in an open-ended way to everybody over 65,” says Grier. “In many cases it doesn’t help the low-income family with parents in minimum wage jobs and has a child needing constant drugs. And when we reform the system we aren’t just looking at how we can contain costs, but also how we can make it fairer. The underlying principle of all that we are doing is equity and fairness.”

The drug benefit plan, which also covers welfare recipients, hit $1.2 billion last year out of an almost $17 billion health budget. That was an increase of 13.8 per cent from 1991, but lower than the 18.1 per cent average for the last 10 years. 

David Kelly at Toronto’s multi-service agency Senior Link suggests the government go after the drug industry for wasting money promoting drugs and duplicating research projects. 

According to the industry advocate Pharmaceutical Manufacturers Association of Canada’s own statistics, drug companies spent $186 million on “marketing” in 1990 while $286 million actually went to research and development. 

The federal government’s own Patent Medicine Prices Review Board, in an internal study leaked to The Globe and Mail, found Canada to have some of the highest drug prices among the seven industrialized nations. 

Anger

Seniors organizations and agencies almost overwhelmingly expressed anger over the report, seeing it as another attack on universality of medicare. They feel the government isn’t being creative enough solving fiscal problems. 

“I strongly disapprove,” says Sara Wayman, chairperson of the Ontario board of Canadian Pensioners Concerned. “The concept of universality when it comes to services is a basic democratic principle we support strongly. People who earn $20,000 a year are still struggling to make ends meet. This would represent a real hardship. 

“We also feel strongly that the high medical costs that everybody is talking about aren’t really due to universality. They are really due to the high cost of drugs, and because there has been a restraint of generic drugs by our legislature.

“They are tip toeing around the medical profession. I hope people will speak out.”

Kelly feels savings could be reaped by taxing back any benefits given to wealthy seniors, while maintaining the universality of programs. 

“The group they are talking about is very tiny,” says Kelly. “And so the cost savings to the government are going to be really minimal. A whole process will have to be set up to decide who gets free drugs, and what you get is another layer of bureaucracy everyone has to go through. Studies have shown this adds to the net costs of government in the long run.”

Afghanistan’s Juicy Solution to Drug Trade

Afghanistan is the world’s largest source of the illegal drugs opium and heroin (International Narcotics Control Board), both of which are derived from the bright-red flower, the poppy (http://en.wikipedia.org/wiki/Poppy).

The country produced 8,200 tons of heroin in 2007, up 34 percent from the previous year.

The negative consequences of the flourishing drug trade are numerous: it is destabilizing Afghanistan’s neighbours and undermining political and legal institutions, addiction rates are soaring, and addicts are spreading HIV/AIDS.

All of this gives Afghanistan’s farmers a bad image. But that could change with the launch of a new brand for Afghanistan: “Anar, Afghan Pomegranate.” It is hoped this sweet fruit will lure farmers away from the illegal trade and boost the country’s image at the same time. The red fruit that contains hundreds of seeds (http://tinyurl.com/dhrzfq), is a local delicacy and has a regional reputation for excellence. It is hoped the pomegranate fruit trees will draw farmers away from the market for the red poppy flower.

By launching the product with its own logo and brand, producers hope the Afghani pomegranate will be able to benefit from a wave of interest in Western markets in the antioxidant qualities of the fruit (http://en.wikipedia.org/wiki/Antioxidant). Boxes of the fruit come clearly stamped with the logo, a sliced fruit with seeds spilling out, and the brand name.

A sophisticated branding and marketing campaign can make all the difference when a Southern country is exporting its products to wealthier nations.

Rather than having the product disappear amongst the plethora of products on a market stall or in the supermarket, clear and sophisticated branding quickly fixes a reputation with customers and significantly increases return purchases.

As consultants KPMG make clear, “For many businesses, the strength of their brands is a key driver of profitability and cash flow.”

Yet many small businesses fail to think about their brand values or how design will improve their product or service.

The Afghani pomegranate had been enjoying export success since 2007, when it became a big a hit with supermarket shoppers in Dubai. The French supermarket chain Carrefour expanded its order to all its Middle Eastern stores. It is hoped the branding will grow and secure these export markets.

There are more than 48 kinds of Afghani pomegranates. The highly prized Kandari pomegranate – named after its home province in the south of the country – is so popular in India, it will be branded “Kandari Pomegranate.”

Afghan Agriculture Minister Mohammad Asif Rahimi told a Kabul launch ceremony last November that Afghan pomegranates are the best in the world. “It’s sweet; it’s juicy,” he said.

The launch was an apt reflection of the risks of doing business in Afghanistan: it had extensive security and bomb-sniffing dogs.

For Afghani farmers, the pomegranate offers the attraction of more profit than growing poppies: farmers can make US$2,000 per acre, compared to US$1,320 for poppies.

While the financial incentive is there, there are many obstacles to making this alternative market a success. The country is a war zone in many places, and exporting through the road network can be perilous, with frequent attacks. Things became so bad last year, a shipment of the pomegranates had to be sent by US military aircraft.

Taking on the lucrative drug trade and its highly sophisticated global networks is not easy. Drug traffickers provide farmers with credit, advance payments, long-term contracts, technical advice and many other benefits farmers do not receive for growing legal crops.

It is hoped the fruit will be more than just a success on its own, and that it will boost the brand of Afghanistan as a nation as well.

“Afghanistan has a mixed-brand heritage,” said Loren Stoddard, USAID’s head of alternative development and agriculture.

Stoddard said the country is hoping to break with its image of war and extremism, and play to its exotic image in the Western mind. The Afghani pomegranate industry is receiving US$12 million from donors to modernize and expand.

Using design to profit from overseas markets has many advantages. But according to Monique Thoonen, managing director of Dutch Design in Development – an NGO experienced in helping Southern entrepreneurs break overseas markets – getting the steps right is critical.

“If you want to focus on a wider market you have to convince buyers that you understand what is wanted in all fields: design, product development, good presentation at a (trade) fair,” she said. “And if you have convinced the buyer, then you must make sure that your organization is organized in such way that you can make promises come true.

“Designing good products is one thing, but during product development also a good and effective production process has to be taken in account. Making the process too complex will result in high price setting, long lead times and maybe even poor quality. Besides, also the transportation of goods must be taken in consideration, bulky goods are very expensive, goods should be easy to pack and not easily break during transport. Goods must be able to resist high humidity and temperatures during transport.”

The Netherlands is well known as a global centre for high-quality product design. Dutch Design in Development works with importers, retailers, NGOs and foundations, matching them with a Dutch designer to develop their product and then provide them with advice on the Dutch and European markets.

By David South, Development Challenges, South-South Solutions

Published: February 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=mLKXBgAAQBAJ&dq=development+challenges+february+2009&source=gbs_navlinks_s

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Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Combating Counterfeit Drugs

Access to good quality drugs is a serious problem across the South. The International Narcotics Control Board estimates that up to 15 per cent of all drugs sold around the world are fake or counterfeit, and in parts of Africa and Asia this figure jumps to 50 per cent. The US Food and Drug Administration estimates counterfeit drugs make up 10 per cent of the global medicine market. The US Centre for Medicines in the Public Interest predicts counterfeit drug sales will reach US $75 billion globally in 2010, an increase of more than 90 per cent from 2005.

Fake drugs are a major cause of unnecessary death and destroy public confidence in medicines and health services. While counterfeit drugs have been on the rise, there is little co-ordinated or effective action to counter this menace afflicted on the sick.

But in Ghana, a solution has emerged that shows a way to guarantee that quality drugs get to the sick who need them. CareShop Ghana uses the franchise model – where licenses are sold to approved vendors who adhere to strict guidelines – to ensure that the quality, accessibility and affordability of essential medicines in and around Accra is guaranteed. CareShop has made deals with close to 300 franchisee pharmacies – often modest operations – who sell over-the-counter drugs.

In Ghana, preventable and curable illnesses like malaria and diarrhoeal diseases are among the leading causes of death. Their treatment pushes many people to financial despair; they can ill afford the extra burden of worrying about counterfeit drugs and the harm they do. Like many countries in the South, Ghana’s public healthcare system is unable to meet these needs and so most people turn to the private sector for help.

An estimated 65 per cent of people turn to licensed pharmacies. But many of these operate haphazard businesses, dispensing expired or counterfeit drugs.

The Ghana Social Marketing Foundation Enterprises Limited (GSMFEL) founded CareShop in 2002, hoping to battle common infectious diseases in poor areas by making sure good drugs get through to the sick.

GSMFEL makes a small profit as the franchisor by selling high-quality drugs to the franchisees. The key to CareShop’s success is imposing standardization on franchisees, so they have to stick to common diagnosis, quality and pricing. They make more money when they adhere to these rules than when they break them. To ensure there is no tampering with the drugs, they are delivered straight to the vendor’s doorsteps, and it is all backed up with health and business training support and branded materials.

The tide can be turned around on fake drugs: in 2002, the WHO reported that 70 per cent of drugs in Nigeria were fake or substandard: by 2004 that figure had fallen to 48 per cent.

Stimulating private sector solutions to African healthcare problems is now receiving an additional boost from a new fund established by the World Bank’s private sector arm, the International Finance Corporation. Launched in 2007, it offers cash and loans totalling US $500 million to commercial healthcare projects in Africa. According to its own statistics, 60 per cent of health expenditure in sub-Saharan Africa is privately funded, and the market, excluding South Africa, is worth US $19 billion.

By David South, Development Challenges, South-South Solutions

Published: May 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=x6mXBgAAQBAJ&dq=development+challenges+may+2008&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challenges-may-2008-issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.