Poppy for Medicine / P4M Business Model

Summary

1. The economics of Poppy for Medicine Projects: production and sale of medicines

2. Pilot P4M Projects



3. The economic vehicle of Poppy for Medicine projects: cooperative associations

4. Economic Diversification through Poppy for Medicine projects

1. The economics of Poppy for Medicine Projects: production and sale of medicines

In a country where forty percent of the population is unemployed and Gross Domestic Product stands at just USD 335 per capita, increasing the availability of sustainable, legal incomes remains a key factor in enhancing rural communities’ access to economic opportunities beyond subsistence farming.

Cash benefits accrued through Poppy for Medicine projects competitive with illegal Afghan opium market

By leveraging Afghan farming communities’ existing assets of strong social control and poppy farming expertise to locally produce simple poppy-based medicines such as morphine, Poppy for Medicine projects allow these communities to bring the inherent potential value of poppy back to the village. Benefiting from the economic mark-up between the production costs and retail prices of morphine (more than 4,000%), sales of these medicines to the Afghan government would result in cash benefits that are competitive with those offered under both the current illegal market for opium, and the standard daily labour rates in Afghanistan.

Net incomes of Poppy for Medicine project participants
Afghan-made morphine would be sold internationally at affordable prices

The vast un-met need for painkilling medicines in most countries illustrates that a guaranteed market exists for Afghan-made essential pain medicines.35 The cost of producing morphine in Afghanistan would be low enough that the Afghan government could sell the medicines to individual states at accessible prices, thereby allowing those states to respond to their country’s un-met pain needs

Poppy for Medicine project clusters would sell their locally-produced morphine to the Afghan government for USD 3,100 per kilo. These medicines would then need to be packaged to meet the international regulatory requirements for the export of poppybased medicines. By selling the morphine to other states for USD 4,300 per kilo,37 the Afghan government would not only recover these international compliance costs, it would gain direct financial benefits from Poppy for Medicine projects.

Afghan National Pharma Company: International Morphine Traders

In support of Poppy for Medicine projects the Afghan government could establish a corporate entity to facilitate its international trade in locally-produced medicines. A state-owned pharmaceutical company could be made responsible for the purchase and packaging of locally-produced morphine. After providing for certification and export compliance requirements, this national pharmaceutical company could sell the Afghan locally-produced morphine at profit to other states, thereby ensuring that the Afghan government receives direct financial benefits from Poppy for Medicine projects.