An Analysis of the Medical Supply Industries

Abstract

Medical supply industries are dominated by widely diversified multinational companies that produce chemicals, pharmaceuticals, computers, cosmetics, and electronic equipment. Of these products, the most profitable group is prescription drugs. This article contains a description of the general structure of the pharmaceutical industry worldwide and the specific details of drug operations in the United Kingdom. The United Kingdom is of special interest because of its long-standing and partially successful attempt to regulate drug prices. The government's inability to achieve total control is related to the competitive structure of capitalist economy, to the patent system that grants monopoly privileges to drug firms, and to the duplication of research efforts and waste of resources that push up drug costs.

The pharmaceutical industry serves the needs of people poorly in developed countries; its impact on underdeveloped countries is much worse. In the Third World, nascent national companies and small local producers of drugs cannot compete with the huge multinationals; the patent system proves to be an imperfect mechanism for the transfer of medical science and technology; and the high cost of imported drugs determines the amount of health care governments can provide for the population. The multinational corporations are now global enterprises that integrate the production of chemicals for many different uses-drugs for human and animal consumption, fertilizers, pesticides, and food additives. Thus the multinationals affect agricultural production and animal husbandry in underdeveloped countries and thereby nutrition as well as the treatment of disease.