Venezuela these days resembles a war zone, where although there is no observable conflict in the characteristic sense, there are casualties everywhere. Every day, newborn babies, men and women are succumbing to ailments due to an acute lack of both elementary and indispensable drugs in severely stretched hospitals. In furtherance to the highly irresponsible and unrealistic preparation of the economy by its former President Hugo Chavez, the financial model, having run its muddled course, now under the supervision of President Nicolas Maduro, has degenerated to unbelievable levels. What makes it unbelievable is the established fact that the country has the world's largest oil reserves. If vast sums of money obtained from the $1.7 trillion oil revenue over 17 years were spent on social welfare schemes like free clinics, it is paradoxical that the government now hasn't got the means to even obtain basic medicine. So where does the problem lie?
Venezuela being an oil economy imports almost everything else, including medicines, from the rest of the world. Indian pharmaceutical companies like Dr. Reddy's , Glenmark, and Sun Pharmaceutical are the top exporters to that market, clocking up $300 million last year. But when the price of crude oil starting falling dramatically, with no safety measures to speak of in place and with the absence of a worthy parallel revenue source, combined with years of flagrant mishandling, the economy, finally throwing its hands up in air, is now in a fatal freefall. Medicines and essentials like milk have slowly disappeared from supermarket shelves. As has now become customary, panicking and immediately blaming outside capitalist forces -- including the United States of America and "right wing hoarders" -- the current government introduced a series of hardly thought through measures. These included strict forex regulations that restricted money from leaving the country and the State takeover of certain ostensibly culpable private sector companies, including supermarkets. The next morning, it was the army, men with guns, supervising long queues in supermarkets.
A profitable company like Dr. Reddy's, despite being owed millions still kept supplying drugs. But when debt levels became unsustainable, it was forced to cut back. The unpaid receivables till last year stood at $60 million, and the number has surely considerably risen since then. With only $4 million of that received this January-March quarter, the company, being forced to write off its dues, saw a staggering 86% fall in profits. With Venezuela owing $10 billion in national debts in 2016, and with a near certain default being predicted, the truth is that the country simply has not got the money to pay for the healthcare of its citizens.
Pharmaceutical companies like Dr. Reddy's are now left with a difficult humanitarian and business conundrum. In a statement, Dr Reddy's CEO GV Prasad said:
Despite the assurance of benevolence, the message is clear, and reflected on the streets and hospitals of the country -- we will realize our obligations if you do the same.
The Venezuelan government, of course, has at every level failed to fulfil its obligations and as a result hospitals are packed with people desperate for medicine.
The debatable aspect here is the fundamental ethics and duties of Indian pharmaceutical companies and how far they can be stretched without themselves collapsing. The very nature of the industry, unlike say the weaponry business, is rooted in saving humanity, although one could argue that arms also defend lives. If medicine manufacturers were to undertake their own Hippocratic Oath, would they be duty-bound to put lives before commerce, even in critical monetary circumstances? If it leads to a breakdown of the very company trying to save lives, as we have seen happening to a certain extent with Dr. Reddy's, the answer is in the negative. Acknowledging the fact that the problem has been entirely created by the Venezuelan State, it may be time for the international community, including Indian pharmaceutical companies, to pool their resources together and declare a humanitarian emergency. If the Venezuelan government manages to refrain from interference and useless anti-capitalist propaganda, hundreds of lives could be saved.
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Indian pharmaceutical companies like Dr. Reddy's , Glenmark, and Sun Pharmaceutical are the top exporters [of medicines to Venezuela]...
Venezuela being an oil economy imports almost everything else, including medicines, from the rest of the world. Indian pharmaceutical companies like Dr. Reddy's , Glenmark, and Sun Pharmaceutical are the top exporters to that market, clocking up $300 million last year. But when the price of crude oil starting falling dramatically, with no safety measures to speak of in place and with the absence of a worthy parallel revenue source, combined with years of flagrant mishandling, the economy, finally throwing its hands up in air, is now in a fatal freefall. Medicines and essentials like milk have slowly disappeared from supermarket shelves. As has now become customary, panicking and immediately blaming outside capitalist forces -- including the United States of America and "right wing hoarders" -- the current government introduced a series of hardly thought through measures. These included strict forex regulations that restricted money from leaving the country and the State takeover of certain ostensibly culpable private sector companies, including supermarkets. The next morning, it was the army, men with guns, supervising long queues in supermarkets.
Pharmaceutical companies like Dr. Reddy's are now left with a difficult humanitarian and business conundrum.
A profitable company like Dr. Reddy's, despite being owed millions still kept supplying drugs. But when debt levels became unsustainable, it was forced to cut back. The unpaid receivables till last year stood at $60 million, and the number has surely considerably risen since then. With only $4 million of that received this January-March quarter, the company, being forced to write off its dues, saw a staggering 86% fall in profits. With Venezuela owing $10 billion in national debts in 2016, and with a near certain default being predicted, the truth is that the country simply has not got the money to pay for the healthcare of its citizens.
Pharmaceutical companies like Dr. Reddy's are now left with a difficult humanitarian and business conundrum. In a statement, Dr Reddy's CEO GV Prasad said:
We will continue to actively engage with the Venezuelan government to provide affordable medicine to fulfil the needs of the people of the country, subject to repatriation of funds.
Despite the assurance of benevolence, the message is clear, and reflected on the streets and hospitals of the country -- we will realize our obligations if you do the same.
The Venezuelan government, of course, has at every level failed to fulfil its obligations and as a result hospitals are packed with people desperate for medicine.
If medicine manufacturers were to undertake their own Hippocratic Oath, would they be duty-bound to put lives before commerce, even in critical monetary circumstances?
The debatable aspect here is the fundamental ethics and duties of Indian pharmaceutical companies and how far they can be stretched without themselves collapsing. The very nature of the industry, unlike say the weaponry business, is rooted in saving humanity, although one could argue that arms also defend lives. If medicine manufacturers were to undertake their own Hippocratic Oath, would they be duty-bound to put lives before commerce, even in critical monetary circumstances? If it leads to a breakdown of the very company trying to save lives, as we have seen happening to a certain extent with Dr. Reddy's, the answer is in the negative. Acknowledging the fact that the problem has been entirely created by the Venezuelan State, it may be time for the international community, including Indian pharmaceutical companies, to pool their resources together and declare a humanitarian emergency. If the Venezuelan government manages to refrain from interference and useless anti-capitalist propaganda, hundreds of lives could be saved.
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