Drugmakers in Thailand have urged the government to revoke the “special privileges” granted to the Government Pharmaceutical Organisation (GPO), claiming that these are unfair and destroying the domestic commercial industry.

The Thai Pharmaceutical Manufacturers Association (TPMA) has called for the GPO, a state enterprise under the Ministry of Public Health, to lose its current monopoly status of medicines supplier to state hospitals.

TPMA chairman president Chernporn Tengamnuay also condemned current moves by the Organisation to boost its production capacity to enable it to compete with domestic commercial drugmakers, and said its policy of importing cheaper generics than those manufactured by the local industry for use in state hospitals would “greatly affect the ability of local drug firms to survive.”

The GPO should not be attempting to produce generic drugs in competition with privately-owned local firms, but should instead manufacture products which local commercial firms do not have the capacity to produce, such as orphan drugs, he suggested, speaking at an industry seminar.

"Private drugmakers are now very weak, due to government regulations favouring state drug manufacturers over free market competition," said Mr Chernporn.

Also speaking at the meeting was Witit Artavatkun, the GPO’s managing director, who pointed out that the Organisation is a state enterprise and therefore required by the government to show a profit, and while this requirement had previously been for 400 million baht a year, the Finance Ministry has raised it to 600 million baht for this year.

Dr Artavatkun added that the Organisation’s profits are used to manufacture orphan drugs and deal with public health emergencies such as the influenza pandemic, and he defended the agency’s import policy, claiming that it was aimed at ensuring fair pricing and public access to quality medicines.

The major obstacle hindering this goal is the lack of a monitoring mechanism for the drug pricing system, he added, and called for a new regulatory body to be set up with this responsibility, emphasizing that it should have particular oversight over imported patented drugs used to treat life-threatening conditions.

Thailand’s pharmaceutical market is estimated to have grown 7.7% in 2009, below the average 12.4% a year increases reported for 2004-8 but well above the global average for last year, and will grow 5.6% a year on average to 2019, or 7.8% in US$ terms, Companies and Markets reported this month.

In 2008, public sector spending on pharmaceuticals reached $1.91 billion, or 54% of the total market, but almost 50% of this total was spent for the country’s five million civil servants. The remainder went on the “30 baht” scheme introduced by Prime Minister Thaksin Shinawatra in 2001, under which people could pay a nominal 30 baht to receive medical treatment.

The scheme survived the country’s 2006 military coup and continues to provide healthcare to many millions of people who would otherwise be unable to pay, says the report.