Profit Margins, Death Rates, Drug Patents and HIV/AIDS
By JOANNE MARINER
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Monday, Nov. 24, 2003
Here are some numbers to consider: 14 million, 35.9 billion, and one.
The first figure is an estimate of the number of people who will die
of AIDS and other treatable diseases over the course of the coming
year, most of them in the poor countries of the developing world.
The second figure represents the combined 2002 profits, in dollars, of
the ten biggest pharmaceutical companies, according to Fortune
magazine's annual analysis of America's largest businesses.
The third figure corresponds to the number of countries that, last
Wednesday, November 19, voted against a U.N. resolution on access to
drugs in global epidemics such as HIV/AIDS, tuberculosis and malaria.
The resolution emphasized that the failure to deliver lifesaving drugs
to millions of people who are living with HIV/AIDS constitutes a
global health emergency. 167 countries voted in favor of the
resolution. The single vote against it was cast by the United States.
Sadly, these numbers are closely related. To protect their exorbitant
profits, drug companies are fighting the production and distribution
of cheap generic versions of patented drugs. Unable to afford the
medicines necessary to save their lives, millions of poor people die
of treatable illnesses every year.
And, as the recent U.N. vote exemplifies, the drug companies have a
reliable ally. Not only does the U.S. government use its considerable
economic power to bully developing countries into restricting access
to low-cost generics, it continues to try to change the international
rules that allow such generics to be produced in the first place
Unnecessary Deaths
In their vulnerability to treatable diseases, the rich and the poor
live in different worlds. Every year, millions of people in developing
countries die of illnesses that they would likely have survived had
they lived in Europe or the United States. A key factor in the
enormous global disparities in death rates is poor people's lack of
access to needed drugs.
Consider the case of HIV/AIDS. An estimated 42 million people are
living with HIV/AIDS worldwide, 39 million of them in the developing
world. India alone has at least 4.5 million people who are
HIV-positive, and possibly many more. China, a country that has yet to
act decisively to address the epidemic, has at least another 1.5
million people living with HIV. In sub-Saharan Africa, as is well
known, the rate of HIV infection has reached crisis proportions.
In the United States and other rich countries, since the advent of
effective anti-retroviral drug treatment, AIDS has become a manageable
disease, not a death sentence. But for the millions living with HIV in
the developing world, prospects for effective treatment remain dim.
At present, only a tiny minority of HIV-positive people in poor
countries have access to anti-retroviral drugs. For most people in the
developing world, as well as some marginalized populations in rich
countries, the cost of treatment remains prohibitively high.
Patent Protections and Profits
Nothing in the ingredients of anti-retroviral drug treatment makes it
inherently expensive. Indeed, when a combination of generic drugs is
used, treatment costs are about $600 per patient per year.
But low drug costs do not appeal to those who profit from drug sales.
Unsurprisingly, therefore, the pharmaceutical companies that own the
patents for anti-retroviral drugs bear an enormous share of the
responsibility for keeping them beyond the reach of so many people
with HIV. In the United States, the cost of anti-retroviral drugs is
generally in the range of $10,000 to $15,000 per patient annually, and
people with advanced cases of AIDS may pay far more. Relying on
international patent protections, drug companies have been trying to
maintain drug prices artificially high by restricting the production
and distribution of low-cost generic substitutes.
Global protections on intellectual property are tied to global rules
on trade, specifically, the rules of the World Trade Organization.
Under the WTO's intellectual property rules -- known as the Agreement
on Trade Related Aspects of Intellectual Property, or TRIPS --
countries belonging to the WTO must give pharmaceutical companies
twenty years of protection for drug patents filed after 1995. Although
the rules carve out exceptions for national health emergencies, they
still go a long way toward limiting poor people's access to
life-saving medicines.
And as Oxfam has shown in a paper titled "Patent Injustice," the
problem extends beyond HIV/AIDS. Brand name drugs for a number of
major diseases cost several times more than their generic equivalents.
The increasing drug resistance of endemic diseases such as
tuberculosis and malaria -- and the resulting need for access to new
drugs -- mean that the WTO's monopolistic pricing rules threaten many
millions of the world's poor.
The Brazil Model
Despite the WTO's restrictions, some developing countries have made
important steps in meeting their people's drug treatment needs.
In Brazil, notably, extensive prevention efforts combined with
state-funded anti-retroviral treatment have reduced AIDS-related
deaths by more than half since 1996. The cornerstone of Brazil's
treatment program has been the local production of generic equivalents
of brand name anti-retroviral drugs, which has driven down the cost of
treatment enormously.
But Brazil's successes, and those of countries like it, have been hard
fought. The TRIPS rules have been a battleground on which Brazil and
others have fought a series of high-stakes skirmishes with drug
companies.
Backed by one of the world's richest and most politically influential
industrial lobbies, the drug companies have had a crucial ally in
their campaign against the spread of generics: the U.S government.
Through the office of the U.S. Trade Representative, the United States
has worked hard to advance the interests of the pharmaceutical
industry, pressuring other governments on a bilateral basis and
threatening to seek trade sanctions via the WTO.
Given the U.S. record, the vote last Wednesday in the Third Committee
of the U.N. General Assembly was not too surprising. On a resolution
introduced by Brazil that called for countries to promote the
widespread availability of drugs necessary to combat global epidemics
such as HIV/AIDS, tuberculosis and malaria, the U.S. was the lone
dissenting vote.
Future Trade Agreements
The U.N. vote is a worrisome portent for the future. At present, the
U.S. Trade Representative is negotiating a number of bilateral and
multilateral trade agreements. Given U.S. advocacy on behalf of
pharmaceutical companies' interests, these agreements are likely to go
beyond the WTO's rules in protecting drug patents.
The largest and perhaps most significant of these agreements is the
proposed Free Trade Area of the Americas. In a briefing paper issued
last year, Human Rights Watch explained how the FTAA's draft
provisions would elevate the protection of patents over the health
needs of the public. The overall thrust of the treaty's restrictions
would be to limit possibilities for generic competition with brand
name drugs.
President George Bush, in a number of his most high-profile speeches,
has expressed a rhetorical determination to assist in the fight
against HIV/AIDS. By allowing U.S. officials to lead the world in
protecting the interests of drug companies, he is betraying his public
commitment to this cause.
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