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Showdown: Drug Makers Vs. The Developing World
Citing such studies, AIDS activists say the big drug manufacturers' reluctance to make their products readily available to developing countries has more to do with profit maximization than with concerns over public health. As the number of confirmed HIV cases has skyrocketed, nations such as Brazil, Nigeria, Chile, India and others have found themselves increasingly at odds with multinational drug conglomerates such as Merck, Eli Lilly, Roche and Pfizer.
In countries such as the U.S., a year's dosage of triple therapy drugs costs about $10,000. Pharmaceutical companies can charge such high prices because they hold 20-year patents on the new treatments. During that time, no other company can make and sell that same drug. So when a manufacturer creates a drug for which there is high demand, the sky's the limit on how much it can charge. The drug manufacturers say they need to charge high prices in order to plow profits back into research, which will produce newer, more advanced treatments for HIV and other diseases. This is the basic economic model of the pharmaceutical industry.
Of course, the average per capita income for most citizens in the developing world is below $10,000, so they cannot afford triple therapy at U.S. prices. Nor can most developing nations' governments afford to buy the drugs for their citizens at such prices because they too are poor.
So AIDS activists have demanded that the pharmaceutical firms make their drugs available at cut rates to developing countries. Until recently, few manufacturers had agreed. But led by Brazil, the developing countries have found a way to turn up the heat on the pharmaceutical firms.
Working with drug manufacturers in their own country, the Brazilian government began producing the drugs needed for triple therapy, brazenly violating patents held by European and American drug companies. Then Brazilian officials began distributing the drugs via a beefed-up health care infrastructure that the government helped put in place.
This infuriated the drug companies, who worried that other countries would follow suit and that their patented products would be produced and sold generically all over the world. They pressured the U.S. government and others to take punitive steps against Brazil on their behalf.
But thanks at least in part to the increased attention the African AIDS crisis has received in the media, it was the drug companies that blinked. In December, 10 African nations signed deals with pharmaceutical companies that slashed triple therapy drug prices by 85 percent. In exchange, these developed nations agreed to monitor the drugs carefully to make sure that their citizens don't export the drugs back to the developed world and sell them there for profit.
But not all the African nations got with the program. Nigeria, for example, has said it intends to buy HIV-fighting drugs from an Indian company for a price even lower than the one agreed upon by the 10 other nations. And officials in South Africa have begun importing generically produced drugs from Brazil.
For their part, the drug companies contend that their concerns are not profit-driven. They point out that sales of anti-HIV drugs make up a relatively small portion of their annual revenues. They claim they are more concerned with maintaining the sanctity of intellectual property patents, which they say are the cornerstone of their businesses and are responsible for extraordinary advances in drug technology.
Where The U.S. Stands
U.S. Secretary of State Colin Powell has been outspoken about the fact that he views the dramatic rise in the number of AIDS cases as more than merely a health crisis. "AIDS is a national security problem. It is devastating problem in Sub-Saharan Africa. It is a pandemic. It requires our attention, and Congress has to be generous," he said in February.
U.N. Secretary General Kofi Annan, British Prime Minister Tony Blair, AIDS activists and others have pointed out that a coordinated international effort is needed to stanch the number of AIDS cases. For his part, President Bush pledged $200 million in aid to such a project during a Rose Garden ceremony earlier this year. But AIDS activists argue that $7-10 billion will be needed to seriously address the problem. So far neither the U.S. nor the rest of the world's developed nations have come up with that kind of money.
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Photo: MTV News & Docs
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