A Debate on the Role of Pharmaceutical Companies and Access to HIV Treatment in the Developing World

June 01, 2006

We look at the issue of H.I.V and AIDS by examining the role of pharmaceutical companies and access to treatment. Last week, the World Health Assembly adopted a resolution that would increase pressure on companies, governments and the WHO to reform the system for producing and distributing drugs in developing nations. [includes rush transcript]

We look at the issue of H.I.V and AIDS by examining the role of pharmaceutical companies and access to treatment. Last week, the World Health Assembly which is the decision making body of the World Health Organization, met in Geneva and adopted a resolution which would increase pressure on companies, governments and the WHO to reform the system for producing and distributing drugs in developing nations.

Health ministers at the meeting were responding to criticisms from NGOs and developing countries that transnational pharmaceutical companies focus on research and development on diseases prevalent in affluent countries to the neglect of poor nations.

A report by the Commission on Intellectual Property Rights, Innovation and Public Health released in advance of the Geneva meeting, stated that the existing system of research and development "has not yet produced the results hoped for, or even expected for the people of developing countries." The report goes on to say that drugs are priced too high and that there is no incentive to research treatments for the developing world where the need is great but profits are low."

We host a debate on the issue.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We go now to a debate on this issue, joined in our D.C. studio by Jamie Love, director of the Consumer Project on Technology, and on the phone from Washington, D.C., by Mark Grayson, deputy vice-president of the Pharmaceutical Research and Manufacturers of America, known as PhRMA. We welcome you both to Democracy Now! Jamie Love, what are your major concerns?

JAMIE LOVE: Well, I think the action by the WHO last week was really a very positive thing. It was — for a lot of people, it was a big moment. They have been lobbying on this for about three years, the debate about whether or not you can start thinking about the incentives for R&D in a different way, in a way that was more consistent with objectives for access and that was more responsive to actual health needs. And what was really surprising was that the Bush Administration actually backed the change last week, which was a reversal of the position they had taken for the previous three years. So it was a step in the right direction.

It’s a complicated issue, but this commission that was set up, itself, was kind of deadlocked on some of the most controversial issues. But [inaudible] it has to do with whether or not the priorities for R&D will be more driven by healthcare problems, on the one hand, and whether the incentive system for R&D will be redesigned in such a way that it is not tied to high drug prices.

JUAN GONZALEZ: Mark Grayson of the Pharmaceutical Research and Manufacturers of America, what about this issue that the pharmaceutical industry’s requirements for — incentives for R&D doesn’t quite gel with the public health crises that are spreading around the world and needs for drugs that people can have at affordable prices?

MARK GRAYSON: Well, I think that the first step is that there are a number of medicines being developed in areas that affect people in the developing world, in the poorest parts of the world, probably not enough, but that’s not necessarily just up to the pharmaceutical industry. And the fact of the matter is, just to give you an example, last week Novartis just announced that they were going to be testing 11 new medicines for tuberculosis. So there are things that are happening on this. As far as AIDS there are 82 medicines being developed for HIV/AIDS.

That being said, there are a lot of other things that could be done. And whether the WHO passes a resolution or not, there is nothing that is keeping people like Brazil and Kenya, India, from putting money into research, which unfortunately they haven’t been doing. And in fact of the matter is, probably one of the most profitable industries in India is the pharmaceutical industry, and they haven’t been doing any research into new medicines for the diseases that affect their population.

And there’s nothing that this new paradigm, which obviously is very worthwhile — there’s no question that it’s worthwhile for looking at ways to find — have countries develop more medicines and come up with some kind of paradigm to develop medicines that affect the people in the poorest parts of the world. But it’s not just up to the pharmaceutical industry. It should be up to the partnership with a lot of governments, including the governments of the poorest countries of the world.

AMY GOODMAN: Jamie Love, your response?

JAMIE LOVE: Well, I agree with a lot of what Mark just said, in that I think that developing countries, including countries like India and Brazil, should be investing more in research and development in areas that are important for people who live in those countries. So I think also, you have to be careful not to overstate the issue of the differences between the United States and Europe and developing countries.

Most developing countries have roughly similar burden of disease for a number of diseases which are prevalent in the United States and Europe. Diabetes, for example, is really growing in developing countries. Asthma is a very big problem in developing countries. And as populations age, you’re seeing more and more cancer.

On the other hand, they have, in addition to what we have, they have other problems. They have special problems in rural areas, resource-poor settings, and you have special problems like lack of heat-stabilized insulin, for example, for people that don’t have refrigeration, or some of the second-line AIDS drugs, which require very sensitive storage conditions. And so, there are a lot of different research and development problems in developing countries, including diseases which are unique, such as sleeping sickness or malaria.

So, I think it’s true that it’s not just about countries to the north. And in fact, the United States does more, far more than Europe does. The United States is a primary funder right now in research and development in the area of public sector research for the most important public health priorities.

And so, part of what needs to be done is not just to focus, however, on India and Brazil, but also to focus on Europe. If you take, for example, all the LDCs in the world, the least developed countries, they have a population of around 700 million people, if you put them all together, and they have the GDP that’s about the same as Denmark, one country in Europe that has a small population. So when it comes to thinking about where you get the money for R&D, I think you have to think about getting Europeans to do more in the area of priority research. That’s one thing.

The second thing you have to do in this new paradigm is you have to change the way you think about financial incentives. Instead of tying R&D incentives to high drug prices, what people are talking about now is tying R&D incentives to improved health outcomes, so that you find a way to reward innovators and entrepreneurs if their products actually improve health outcomes in developing countries, not through high prices, but through some other remuneration system.

AMY GOODMAN: Jamie Love is director of the Consumer Project on Technology. Mark Grayson, deputy vice-president of PhRMA, the Pharmaceutical Research and Manufacturers of America. We’re also joined in studio from South Africa by Sipho Mthathi, General Secretary of the Treatment Action Campaign, which is a leading South African AIDS activist organization. What about the issue of access to drugs in South Africa, Sipho?

SIPHO MTHATHI: Well, I mean, the issue of access in developing countries is a critical issue. We’re currently debating a global declaration that has to address the issue exactly of how are we going to save 40 million lives, particularly of people from developing countries. I come from a region where more than 70% of the world’s HIV-positive population comes from. We are currently unable to save those lives. And we — nation states are currently debating how are we going to make sure that by 2010, as was promised particularly by G8 nations, we’re going to create a universal access to treatment. And so, for us this is a real issue, and it’s not just some hypothetical debate.

In my own country we have more than 800, coming close to a million, people who needs need AIDS drugs. In the current paradigm, there’s no way that my country and even poorer countries are going to be able to create access for their people. And so the bottom line is we’re going to continue seeing a trend of people dying. If it is not AIDS today, it’s going to be another public health disaster tomorrow. And this paradigm has to change.

JUAN GONZALEZ: But has there been any motion, in terms of the pricing of drugs, for accessibility for people in your country or in southern Africa in general?

SIPHO MTHATHI: Well, I mean, there’s been lots of — I mean, the new TRIPS price is very clear on the need to prioritize public health over profit. And so there is some leeway.

JUAN GONZALEZ: Explain what TRIPS is.

SIPHO MTHATHI: Yeah, well, it’s the trade-related aspects of intellectual property, which is basically an international law governing — they extend how trade is done, and in the area of medicines, it’s the law that determines whether a drug company that has manufactured a drug, how much they can charge. And they get to have 20 years, according to that law, where they can charge whatever they like, and it can be the only company which can make profit, which is a real problem for most countries, because it means that there’s no regulation, and it also means that for many of our countries where we come from, the drugs are inaccessible. And so that law has been real problematic when it comes to public health and to medicines and access in developing countries.

And so, I think the issue for us is very real. While there’s been some positive steps to try and create flexibility within the TRIPS agreement, it still is very difficult, because developed nations, particularly the U.S. and Big Pharma here, has put a lot of pressure on many of the developing countries not to exercise some of their flexibilities within the TRIPS agreement.

AMY GOODMAN: Mark Grayson, would you like to respond, representing Big Pharma?

MARK GRAYSON: Well, I do know that, especially in South Africa, there are a number of drugs, especially for AIDS, drugs that have been licensed to South African countries. One was just — there were just things announced yesterday by one of the companies — not yesterday, the day before — that gave a license to another company that is part-owned by a South African company and part-owned by Ranbaxy of India, and that they will start making AIDS drugs to be able to — basically to be at the lowest price possible for people in South Africa, and there are probably 15 other drugs that are already — have been licensed to South African companies, generic companies. So we know that in South Africa, at least, that there are lots of ways for them to be able to get medicines.

That being said, I think the main problem right here is you’re talking about funding. No matter what it is, there’s still a cost to medicine, no matter what it is. So even with the second-line therapies, no matter how it’s made, there is still a pretty sizeable cost for anybody, especially in the poorest parts of the world and the poor people in South Africa. There’s no question about that. And the question then is how do we as a society join together in partnerships with both the local governments in finding better ways to distribute them, but also to afford them through, whether it’s the Global Fund, whether it’s PEPFAR, whether it’s any other programs that people around the world should be donating to to make sure that people get access to the medicines at the prices that are even lower than what they have been in the past and continue to be driven lower.

JUAN GONZALEZ: But, Mr. Grayson, when you say that there’s still a cost to medicine, the pharmaceutical industry, at the least in the United States and Europe, is one of the most profitable industries in the world.

MARK GRAYSON: Well, it’s also the most profitable in India. I mean, don’t single out just one group. And even if we are profitable, there’s any other number of people that make a lot of profits. And fact of the matter is the Middle East is making huge amounts of profits off of oil that are selling to South Africa and every place else. So profits alone aren’t the reason for why people should be doing anything. The reason what we’re looking here is to try to make sure that people get access to medicines. And we’re not selling — and fact of the matter is, in many cases, we’re not selling in most of these countries, so we have licensed them to those particular countries.

AMY GOODMAN: Jamie Love, can you respond to Mark Grayson, please?

JAMIE LOVE: Well, one of the reasons why there’s been some licensing in South Africa was in 2003, the South African Competition Commission found GSK and Boehringer guilty of excessive pricing, refusal to license their patents on reasonable terms and conditions, and in one additional count in a competition case brought by Hazel Tau and TAC. we actually worked with the South African Competition in that case. Since then, I think the companies have licensed some of their patents because of this precedent.

There’s a lot of problems that are not so obvious about Africa that relate to other countries. India, for 30 years, didn’t have patents on pharmaceuticals, and so people took for granted that India would be developing cheap generic alternatives and they could look to India as a source of drugs. Now things are being tightened up quite a bit, because India now, last year, passed a patent law. So the new inventions will be a much tougher situation, as far as India is concerned, than they were in the past.

Secondly, in 1996, Brazil passed its patent law, and so the drugs that were invented before 1996 were purchased as generics in Brazil, and they’re fairly cheap around the world. The second-line drugs, which were invented after 1996, are fairly expensive, because Brazil stopped buying generics. And there’s a tremendous amount of pressure even today on Brazil to not issue compulsory licenses on drug patents for second-line AIDS drugs.

Christian Israel has really been on a campaign in the Bush administration against Brazil, calling them pirates and claiming that they were trying to misuse provisions in the W.T.O. agreements that would allow them to override the patents, which was completely false. It was just a propaganda campaign by Christian Israel to sort of demonize Brazil. But when Brazil stops buying generic AIDS drugs, you don’t have the economy as a scale to get cheaper prices for Africa. So there’s a connection between what countries like India and Brazil do, where there’s lots of pressure on them to have tough patent laws now, and the access in Africa.

AMY GOODMAN: We’re going to end with Sipho Mthathi, who’s come into this country from South Africa for the big U.N. General Assembly Conference on HIV/AIDS.

SIPHO MTHATHI: Well, the bottom line is that at the moment we’re having to scramble for piecemeal solutions, whether it’s a compulsory [inaudible] licenses or something else. The bottom line is we need a change to the current paradigm. We’re talking about masses of people who need AIDS drugs. And we need a solution that is going to cover all of Africa, because it’s not enough for there to be a small solution for South Africa. The rest of the people in the region need AIDS drugs. And so, that is what we are talking about here. We need a change to the current paradigm that can be a more permanent solution.

AMY GOODMAN: Sipho Mthathi, I want to thank you for being with us, General Secretary of the Treatment Action Campaign, a South African AIDS organization; Jamie Love, director of the Consumer Project on Technology in Washington, D.C.; and Mark Grayson, deputy vice-president of the Pharmaceutical Research and Manufacturers of America or PhRMA.

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