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Selling Afghan Morphine


1. Afghan medicines to be sold under a second-tier system of medicine supply for emerging countries

2. Pilot projects needed to test the use of Afghan-made morphine


Summary

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An analysis of the global un-met need for morphine shows there is a substantial market for Afghan-village made medicines. Research indicates that the current INCB-administered raw poppy materials supply system should be complemented by an additional second-tier system for the supply of finished poppy-based medicines. Leveraging the expertise and resources of farmers in Afghanistan to produce and export Afghan locally-produced morphine, this additional second-tier system, by making available affordable medicines, could help meet the needs of the 80% of the world’s population who currently have little or no access to these essential painkilling medicines.

The need for a second tier of medicines supply to complete current system

As the current system supplies demand levels as reported by the INCB but does not cover the global actual need, there is room for a complementary ‘second tier’ system of supply that would be based on the production of poppy-based medicines offered at affordable prices. This second tier supply system is needed to help meet the developing world’s growing need for inexpensive poppy-based medicines.

While only a limited number of countries are authorised by the INCB to export the raw materials used in the manufacture of poppy-based medicines, any country is allowed to manufacture such medicines, regardless of whether these medicines are for internal use or for export. Thus a second-tier supply system based on the export of finished poppy-based medicines rather than the export of raw poppy materials could easily be established. So as to not disrupt the current global supply system or attempt to replace current suppliers of raw poppy materials, a second-tier system would only supply finished poppy-based medicines to less economically developed countries lacking access to these essential medicines.

Two-tier systems are currently in place around the world for commodities as diverse as generic HIV/AIDS medicines and bananas. Multi-level systems of product supply are used to channel like products to distinct markets. A second tier system of product supply is most useful where a significant sector of consumers are disconnected from the overall market for that product, having been either priced out, or ignored altogether. Two-tier product supply structures are particularly useful for making essential medicines more widely available.

In particular, supplies of HIV/AIDS and malaria medicines are sold through two different systems of supply: brand-name, higher cost drugs are made available to wealthier markets; cheaper, generic medicines are supplied to less well-developed economies. For example, in Sub-Saharan Africa, the bulk of the medicines consumed by HIV/AIDS patients are generic medicines, sold at prices much lower than those charged for branded drugs, which are generally only used if generic ‘first line’ medicines fail.

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Likewise, two-tier supply systems are used to enhance the availability of medicines used in the treatment of those so-called ‘neglected diseases’ most prevalent in emerging or transitional economies, such as malaria. Because the supply of potent malaria-treatment drugs was not reaching many patients who most needed them, a new system of supply was developed to meet these un-met needs.
The implementation of Afghan village-based Poppy for Medicine projects would effectively facilitate the development of a second market for fair trade village-based Poppy for Medicine market supplied by Afghanistan, outside the current INCB administered market. Farmers in the current supply countries who cater to the current market would in no way be affected by the production of village-based Poppy for Medicines. Afghan locally-produced morphine supplies would not compete with existing suppliers, because it would be geared for those countries who do not actually take part in this existing market. Morphine produced under an Afghan village-based Poppy for Medicine project would provide these countries that currently have little or no access to these essential medicines with an affordable, high-quality supply of effective painkillers for their AIDS and cancer patients.

Channelling Afghan-made medicines to the international market through special trade agreements

Under the 1961 Single Convention on Narcotics Drugs, where a country cultivates poppy for its own domestic use in poppy-based medicines, it is not necessary to obtain any formal approval from any United Nations agency or from the International Narcotics Control Board. The only requirement is the establishment of a national agency to oversee the production of the Poppy for Medicine process.91 This holds true even where the morphine that is produced is subsequently exported. There are no legal obstacles stemming from the 1961 Convention, the World Trade Organisation (WTO) or European Union regulations or domestic state laws to the trade of finished poppy-based medicines through special trade agreements. Thus, special trade agreements would enable the sale of Afghan morphine within the frame of current regulatory constraints.

Special trade agreements for Afghan-made medicines

Sales contracts between State Enterprises:
The use of State-owned enterprises to make contracts avoids the issues of immunity and sovereignty associated with direct contracts of sale between States. Although they are controlled by the state, Stateowned enterprises are separate entities which acquire rights and obligations in their own name. Such enterprises are frequently used as a tool for carrying out commercial activities in areas where a State wishes to retain involvement. The 1961 Convention specifically provides for the international trade of narcotic drugs through State enterprises. In order to be compatible with WTO regulations these enterprises must demonstrate that import/export of poppy based medicine follows commercial considerations.

Revenue Sharing Agreement (RSA):
Another option would be to set up a commercial contract between Afghanistan or its State enterprise and a company of a third State, which would provide details on how the revenue generated by the company through the export of Afghan-made medicine would be shared with the Afghan producers. This may be done through a joint venture enterprise, or through an Afghan subsidiary owned entirely by a foreign investor. Because an RSA is a commercial contract, this option does not raise any legal issues pertaining to the regulations or the regulatory bodies discussed above. Furthermore, the flexibility of an RSA would allow contracts to be tailored to economic, social and development needs. It would also provide for the free transfer of technology and expertise for the production and export of Afghan produced poppy based medicine.