Why do the governments believe the giant Pharma companies more than their own people?

In a small conference room at Emperors Palace in Gauteng’s East Rand, delegates from all over the world are fervently discussing the prisoner’s dilemma, a thought experiment used to illustrate that even when it’s in their own best interest, people don’t always work together.

The side-event they’re attending was organized by civil society organizations such as the Fix the Patent Laws Campaign ahead of the World Health Organization’s (WHO) second meeting on medicine prices, the Fair Pricing Forum, in April.

Drug companies have also used the cost of researching and developing new medicines to justify their high prices. However, a study published in the Journal of the American Medical Association this year found few links between the two.

The research included 99 cancer drugs approved by the United States medicines regulator, the Food and Drug Administration (FDA), over about 30 years. It revealed that companies coined about R200 for every rand spent on research and development – a ratio the authors say is unfair, even after they considered a reward for innovation.

Besides, companies aren’t always upfront about what costs really go into their products, says James Love, director of the public health law organization Knowledge Ecology International.

And governments are falling for it.

In February, Italy’s health minister,Giulia Grillo, sent the WHO a resolution letter for discussion at the World Health Assembly. The World Health Assembly is an annual event which happens in May — during which all WHO member states gather. In the letter, Grillo proposes that drug prices could be reduced if countries forced pharmaceutical companies to be open about what it really costs to produce medicines. The plan is to give governments a way to enforce changes in the way medicine prices are set.

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