Transcripts
"AIDS and pharmaceutical firms"
by Thomas Etehel
Nineteen million people have already died from AIDS. More than 35 million people are HIV-positive today. Two out of three of those are African. Africa is the only continent where life expectancy is decreasing, having fallen below 50 years in the 1990s.
Power is now held by only a few companies within the drug production system. Of the 25 best-selling drugs, 20 are American. Prices for these drugs are set in accordance with the American market, where drug prices are generally among the highest in the world. Some people, such as Dr Bernard Pécoul of Doctors Without Borders, believe that a tax should be levied on the profits of pharmaceutical companies, in order to fund research on tropical diseases and to produce drugs for basic medical needs.
To satisfy shareholders, the largest pharmaceutical firms maximise profits through illegal price agreements. Experiments are carried out in hazardous conditions in the Third World and on marginalised populations.
The effects of market deregulation can be seen in Latin America, for example, where US have imposed their prices since 1988. The price of drugs has increased on average by 20%.
In practice, there are two opposing tendencies: on the one hand, deregulation and "fair competition", and on the other hand, the rise of oligopolies and monopolies. In fact, there is no true competition between the big pharmaceutical groups for the sale of AIDS drugs in poor countries. Each time generic drugs are introduced on the market, the big companies lower their prices. The pharmaceutical majors do not hesitate to reduce prices for certain countries, to announced great "annual stock sales" to block the arrival of these generic drugs, which are manufactured illegally, e.g. in Brazil.
Their market is also protected by the patent system. An agreement called TRIPS (Agreement on Trade-Related Aspects of intellectual Property Rights) was signed in 1995 in the context of the World Trade Organization (WTO). TRIPS protects patents filed by laboratories. In addition, laboratories now attempt to obtain exclusive access to the plants necessary to develop certain drugs. Often, these plants can be found only in the poorest countries, but these countries do not benefit from this business; the patent on the plant prevents them from getting access to the drugs.
For centuries, Indians have used saffron powder or paste to heal wounds. On 28 March 1995, the US Patent Office gave exclusive property rights for the the medicinal properties of saffron to researchers from the University of Mississippi (Jackson). The Indian Council for Scientific Research attacked the patent in the American courts, using evidence from Sanskrit texts, and an article published in 1953 attesting the prior art of Indian traditional knowledge. It took two years before the monopoly held by the researchers was cancelled. This is the only such success story.
However, there is a clause in the TRIPS agreements called "compulsory licences", which makes it possible for a country to impose the use of a licence on the owner of a patent, in the case of an epidemic or when prices are excessively high. Some poor countries have already launched their own production of drugs. AZT made in India is five times cheaper than in the United States. Lariam (which is used to treat cholera) costs eight times less. These are not isolated cases. Egypt and Argentina have also pursued a policy of import substitution, creating a local pharmaceutical industry. However, between now and 2005, all these countries will be invited to enact legislation in conformity with the TRIPS agreements.
The pharmaceutical laboratories have criticised compulsory licences, claiming that they would spell the death of research and development. This argument has largely been disproved: a great deal of R&D is financed by public organizations, and the high profit margins which pharmaceutical companies enjoy on Western markets amply cover their costs. According to Harvey Basle, Director of the International Federation of Pharmaceutical Manufacturers Associations (IFPMA), the price of the drugs in poor countries would not be a major obstacle if those countries had more adequate infrastructure in place. He asserts that medical systems in the South are too unreliable and incompetent to take proper responsibility for patients' health. In his view, it is poverty, rather than corporate greed, that constitutes the main impediment to adequate health care and the fight against AIDS.
What about the western countries' governments and the NGOs? A fund has just been created by NATO. Only two governments, the United States and France, promised to finance it, giving about $200 million and $130 million, respectively. Bill Gates, through his foundation, offered $100 million. For the US, $200 million represents 0.1% of their GNP for foreign aid. In addition, the US and Europe are the two regions that issue the largest number of compulsory licences. At the same time, the US, the World Bank, some European countries and the pharmaceutical lobbies put pressure on the countries of the South when they want to use compulsory licences. Only the WTO ended up supporting the poor countries' use of these licences.
But times are changing. With the withdrawal of their lawsuit in South Africa, the pharmaceutical laboratories already had to take global public opinion into consideration. Some people want to institute a medical exception, just as their is cultural exception (which states that art cannot be treated as just another product).
Thomas Etehel.
Bibliography
TRIPS material on the WTO web site.
http://www.wto.org/english/tratop_e/trips_e/trips_e.htm
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