Underdevelopment of the pharmaceutical industry

Other Names:
Inadequate national production capacity for medicinal drugs

Countries are at different stages in establishing a pharmaceutical industry and the constraints on the growth of the industry are different at each stage. Three principal groups of countries can be identified: (a) developing countries with little or no pharmaceutical manufacturing activity; (b) developing countries with facilities to formulate a range of drugs; and (c) developing countries with facilities to manufacture some of the active ingredients as well as formulate drugs.

At present, the availability of drugs, active ingredients and intermediates for drug manufacture often depends on imports. The growing cost of such imports makes it imperative for most developing countries to consider the local formulation and/or basic manufacture of as wide a range of bulk drugs as possible.

The main constraints on the growth of the pharmaceutical industry in countries are: inadequate technological capability; lack of qualified and trained personnel; high cost and limited availability of imported bulk drugs and intermediates; scarcity of financing available on terms and conditions suitable for the industry; and absence of well-defined national policies to promote the growth of the industry. Furthermore, because of the scarce resources available in most developing countries, the decision to develop a domestic pharmaceutical capability has to compete with other national development projects. Hence it is unrealistic for most developing countries to hope that domestic production will be able to make them self-sufficient in drugs, especially since the drug industry is divided into several quite separate therapeutic markets.


[Developing countries] Developing countries obtain pharmaceutical supplies from two sources: imports from abroad and domestic output. Both these sources are heavily influenced by technological factors, which are responsible for keeping prices of imported pharmaceuticals well above the capacity of most developing countries to obtain in sufficient volume to satisfy their health care needs. Indicators for several countries suggest that in 1980 pharmaceutical expenditures constituted about one sixth of health expenditures in developed countries but from one third to one half of such expenditures in developing countries. It has been the general experience of the last 10 years that expenditures on pharmaceuticals have been rising by some 13-14% annually. Assuming that the past pattern of pharmaceutical expenditures were to prove relevant for the future, it will be seen that total pharmaceutical costs in developing countries would have risen from $15-20 billion in 1980 to $55 billion by 1990 and to the very high amount of some $200 billion by the year 2000.

Related Problems:
Inadequate health services
Related UN Sustainable Development Goals:
GOAL 1: No PovertyGOAL 2: Zero HungerGOAL 3: Good Health and Well-beingGOAL 4: Quality EducationGOAL 5: Gender EqualityGOAL 6: Clean Water and SanitationGOAL 7: Affordable and Clean EnergyGOAL 8: Decent Work and Economic GrowthGOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 13: Climate ActionGOAL 14: Life Below WaterGOAL 15: Life on LandGOAL 16: Peace and Justice Strong InstitutionsGOAL 17: Partnerships to achieve the Goal
Problem Type:
E: Emanations of other problems
Date of last update
04.10.2020 – 22:48 CEST