A Trade Barrier to Defeating AIDS

Via the New York Times, by Tina Rosenberg.

Earlier this month, [the Medicines Patent Pool, a new organization trying to make AIDS drugs better, cheaper and available sooner to people who need them in poor countries] received its first donation of rights from a pharmaceutical manufacturer, Gilead Sciences.   It is an important step  — but the terms Gilead negotiated are also confirmation of a dangerous new trend: middle income countries as a target market for drug makers.  In the past, pharmaceutical companies have lowered prices in these countries to increase sales.  The new strategy is to treat people in Egypt, Paraguay, Turkmenistan or China — middle-income countries, all — as if they or their governments could pay hundreds or even thousands of dollars a year each for AIDS drugs.   This low-volume high-profit strategy might make  business sense.   But in terms of the war against AIDS, it means surrender.

In the world’s most impoverished countries, AIDS drugs are cheap.   It wasn’t always that way.  Until well into the Clinton administration, the United States government pressured even the poorest countries shamelessly if they tried to bring down the prices of medicine.   Even newly democratic, AIDS-ravaged South Africa became the object of an all-out assault by the Clinton administration to get the country to repeal a law allowing it to break medical patents, a step that was perfectly legal under world trade rules.  Washington was not interested in the health consequences.   (A U.S. trade negotiator who worked on South Africa at the time told me that he had been unaware that AIDS was a major problem there.)    Public outrage over South Africa ended Washington’s pressure on poor countries.   In 2000, President Clinton issued an executive order pledging that sub-Saharan African countries would not face trade sanctions for laws promoting access to AIDS medicines.

The order continues to be largely respected, and the group of countries who are generally able to get access to the cheapest drugs has grown to include the poorest countries from around the world — Afghanistan, Tajikistan, Bangladesh, Burma.    Gilead’s agreement with the Medicines Patent Pool covers these countries.

But countries just above this cutoff line are on their own.  “There are countries that are considered to be “middle income” that will never be able to afford the high prices charged by innovative pharma companies,” said reader A. Grant of New York.  These nations are also losing the discounts that major manufacturers of AIDS drugs used to offer them.  According to Médecins Sans Frontières, which tracks drug prices, prominent manufacturers of AIDS drugs have stopped offering discounts to middle-income countries, or now require that countries negotiate those discounts one by one.

Read the rest here.

[Content that is linked from other sources is for informational purposes and should not construe a Mapping Pathways position.]