AIDS and Profits

AIDS and Profits


This is not about profits and patents; it’s about poverty and a devastating disease.” That statement did not come from AIDS activists struggling to provide sub-Saharan Africa’s 25 million HIV-positive people with access to life-extending medications. It came from the executive vice president of Bristol-Myers Squibb, which recently announced it would slash prices on its two AIDS drugs and forgo patents on one of them. A week earlier, Merck & Co. said it would lower prices on its two AIDS drugs not just in Africa but, pending review, in other heavily affected countries as well.

What’s going on is not a change of heart on the part of “Big Pharma”–which John le Carré describes in this issue as a group of “multibillion-dollar multinational corporations that view the exploitation of the world’s sick and dying as a sacred duty to their shareholders.” Far from being a humanitarian action, the price reductions represent an attempt to preserve patent rights by diffusing international pressure for generic manufacturing. Revealingly, neither BMS nor Merck has withdrawn from a suit against the South African government brought by thirty-nine pharmaceuticals seeking to prohibit importation of generic drugs, which they claim would violate their patents.

The Indian generic manufacturer Cipla announced in February that it would sell the entire AIDS triple-therapy combination at $350 per person, per year, and other generic manufacturers, in Thailand and Brazil, currently offer AIDS drugs at a fraction of multinational prices. By comparison, the Wall Street Journal reported that a combination of AIDS drugs from BMS and Merck would cost between $865 and $965 per person, per year. If those prices were multiplied by the number of AIDS patients in, say, Zimbabwe, a relatively prosperous country by African standards, the total would come to about 20 percent of its GDP. And that sum doesn’t include the investments in healthcare infrastructure needed to distribute and monitor the drugs’ use.

But even if poor African countries could somehow find the money to pay the high patent-protected prices of the drug giants (the $26.6 billion a year it would cost to provide all Africa with AIDS drugs is no more than about a third of what Bush’s tax plan would give to America’s wealthiest 1 percent), that would not be the end of their problems. Rather, such a course would lock them into exclusive trade agreements with multinationals and put them at the continual mercy of Western foreign aid budgets. As new treatments are developed, Africa would have to negotiate new price reductions, country by country, company by company.

If the solutions lie with generic manufacturing (not just for AIDS medications but for a slew of vital drugs for malaria and other ills), then circumventing existing international patent regulations is a necessity. The trial in South Africa over compulsory licensing is one crucial test of the viability of this option. Another potential plan would be for the National Institutes of Health to give patents owned by the US government on publicly funded AIDS drugs to the World Health Organization, thereby licensing it to oversee generic manufacturing. Why not, in fact, let governments underwrite the entire cost of drug research–rather than, as now, underwriting substantial amounts of the research, which drug companies then exploit–and do away with patents altogether?

Whatever the recourse, and despite the well-publicized gestures by multinational pharmaceutical companies, the solutions to Africa’s AIDS epidemic lie in sustainable competitive drug production, not momentary self-interested charity.

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