AIDS and the Drug Companies

Through Medicaid and other programs, most poor people in the United States have access to the new AIDS drug therapies. But in developing countries, their cost—over $10,000 a year—has made their use all but impossible. As a result, the AIDS pandemic has widened its devastating scope in both human and economic terms, especially in sub-Saharan Africa.

Last May the five major international pharmaceutical companies offered to sell the triple-combination therapies to governments in developing nations at reduced prices. Negotiations with individual governments, however, have been slow and the results disappointing. In Senegal, for instance, the yearly per-patient cost for the medications is $1,000, still far too high for most Senegalese.


Now, though, a breakthrough in access to the triple-drug therapies is in sight. Doctors Without Borders, together with other groups like Oxfam and the AIDS Coalition to Unleash Power, have been waging a campaign to press the drug companies to reduce their prices to far lower levels than what they have so far been offering to poor countries. Anti-AIDS activists hope to help enable the latter to import generic versions of the triple therapies without facing retaliatory trade penalties. Some countries, in fact, have already developed the generic drugs and have begun exporting them. Cipla Ltd., an Indian company, announced in February that it would offer its version of the triple-combination therapy to Doctors Without Borders for $350 per patient for a year, a discount of more than 96 percent compared with the U.S. price. Kristina Torgeson, communications director for Doctors Without Borders, told America that the announcement shows it is possible to make the medications available at lower costs.

Under Indian law, local firms can manufacture drugs that are under patent in other parts of the world if they employ processes different from the original patented process. Doctors Without Borders has already been distributing free medications in several of its pilot programs in poor countries, but not nearly on the level needed. Now, with the offer from Cipla Ltd., it will be able to distribute them far more widely. In addition, Doctors Without Borders has asked Cipla to make the generic drugs available to governments and United Nations agencies at the same reduced rate of $350 per patient. Later in February, another Indian drug company, Ranbaxy Laboratories Ltd., made its own announcement that it would soon start manufacturing the generic medications—a move that could lead to competition with Cipla, which might result in still lower prices.

Brazil offers a stunning example of what can be accomplished by free distribution of the drugs to all with AIDS. As early as 1994, the Brazilian government began to urge local pharmaceutical firms to begin making their own versions of the anti-retroviral drugs. Since they became available and were offered free to patients, the results have been impressive. AIDS deaths have dropped by 50 percent. Moreover, because most of those who have been receiving the medications do not need hospitalization, the government has saved millions of dollars in medical costs.

As might be expected, the major pharmaceutical companies are unhappy with what the Brazilian and Indian governments have been doing and resent what they regard as an infringement on their patent rights. They have also argued that their prices for the anti-retrovirals must remain at a certain level for the sake of continuing research and development. But Ms. Torgeson noted that since the large companies do not sell their anti-AIDS medications in most regions of the developing world, but primarily to the wealthy countries, their argument that it is necessary to hold prices to their present high levels is unpersuasive.

One of the big five drug companies, Merck, recently announced a massive slash in the price of its own AIDS medicines that would go to sub-Saharan counties—a move that will probably lead to similar cuts by the other four, especially now that all are under fire by advocates who accuse them of ignoring the plight of the world’s poorest AIDS sufferers. In the United States, some support for the position of humanitarian groups can be found in the announcement made in late February by the Bush administration that it would not try to alter the Clinton administration’s commitment to forbear from seeking sanctions against nations that manufacture or import generic medications.

Political support on a multinational level is needed, however—and so is monetary backing by rich nations, because no matter how low prices go, the drugs’ cost will still keep them out of the reach of most of those in developing nations who need them. With both forms of support (a support that has as much to do with moral considerations as with finances), it may be possible to slow the downward slide that has taken many millions of lives and turned back by decades needed development in the parts of the world most afflicted by AIDS.

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