Prices Cut for Developing Countries

Not surprisingly, a major obstacle to broadening treatment access is the high price of HIV/AIDS medications. However, over the past year, the issue of making AIDS drugs more readily available to people in poor countries has received increased attention from treatment advocates, policy makers, heads of state, and the media. Faced with growing pressure for expanded access and the threat of competition from generic manufacturers, several pharmaceutical companies have reduced the prices of their antiretroviral drugs.

In February 2001, the Indian generic drug manufacturer Cipla sparked a sharp drop in the prices of antiretrovirals by agreeing to supply triple-drug combination therapy for $350 per patient per year to the Nobel Peace Prize-winning agency Doctors Without Borders for use in Africa, or directly to developing nations themselves. Since then, the price for some generic HIV "drug cocktails" has dipped below $300. And several large pharmaceutical companies have cut prices, offering combination therapies for roughly $1,000. (In the United States, these therapies cost between $10,000 and $15,000 per year.)

Understanding Patent Regulations

The issue of AIDS drug pricing centers around patent laws. Patents provide pharmaceutical companies the legal means to prevent others from making or selling their inventions for at least 20 years, subject to certain exceptions. According to the World Trade Organization's (WTO) Trade Related Intellectual Property Rights (TRIPS) agreement, all 140 WTO member countries are required to pass laws protecting medical patents, although the deadlines for doing so vary. Least developed countries have until January 1, 2006, to comply with the TRIPS agreement, with the possibility of an extension. (At the WTO meeting in Doha, Qatar, in November 2001, it was decided that least developed countries would have until 2016 to comply with TRIPS and could apply for further extensions.) The TRIPS agreement sets certain minimum requirements and does not require that each member's rules on protection of intellectual property be identical. Member countries determine how best to implement the provisions of the agreement within the framework of their own legal systems.

TRIPS allows for compulsory licensing—where a government allows someone else to produce a patented product or process without the consent of the patent owner—under certain conditions. Normally, the person or company applying for a license must have first attempted to obtain a voluntary license from the patent holder on reasonable commercial terms. And if a compulsory license is issued, adequate remuneration must still be paid to the patent holder. However, in the case of national emergencies, which are defined as "circumstances of extreme urgency" or "public non-commercial use," there is no need to apply for a voluntary license. Compulsory licensing must meet certain additional requirements and cannot be arbitrary.

Pharmaceutical companies maintain that generic manufacturing threatens not only their profits, but also their ability to invest in new research. In particular, industry representatives warn that without the patent protection that allows companies

"This is a war. It has killed more people than has been the case in all previous wars and in all previous natural disasters. We must not continue to be debating, to be arguing, when people are dying." —Nelson Mandela

to recoup their investment in developing new medications and bringing them to market, innovation and drug development may languish. Pharmaceutical firms are also concerned that offering drugs at steep discounts in developing countries will prompt demands for lower prices in developed markets as well, and that cheaper generic versions of HIV/AIDS drugs may end up being re-exported from developed to developing countries.

The Debate on Patents

The debate on patents remains contentious. A controversial study issued recently by Amir Attaran of the Center for International Development at Harvard University and Lee Gillespie-White of the World Intellectual Property Organization found that the majority of antiretroviral drugs are not patented in African nations and concluded that patents are not an obstacle to drug access in sub-Saharan Africa—the epicenter of the global epidemic.

The report claims that although some major drugs such as lamivudine, zidovudine (AZT), nevirapine, and nelfinavir are patented in the majority of nations, most of the drugs are patented in a median of three African nations. Attaran and Gillespie-White conclude that poverty, lack of political will in developing countries, and the scarcity of funds from rich nations are the main factors keeping HIV treatment from the majority of people living with the disease.

But treatment advocates argue that drug patents are in fact significant barriers, preventing millions of people from accessing lifesaving antiretroviral therapies. Five health organizations, including Oxfam and Doctors Without Borders, have refuted the findings of the Attaran and Gillespie-White study, claiming that the same data show that patents remain a barrier to the most practical and sought-after drug combination, which includes GlaxoSmithKline's lamivudine and Boehringer Ingelheim's nevirapine. According to Jamie Love of the Consumer Project on Technology, "Anything you could manufacture for under $500 is patented."

Two letters published in the February 20 issue of the Journal of American Medical Association also refute Attaran and Gillespie-White's analysis. In the first letter, doctors from the Prince Leopold Institute of Tropical Medicine in Belgium argue that the triple drug combinations zidovudine/lamivudine/nevirapine and stavudine/lamivudine/nevirapine are essential to HIV treatment and are probably the most appropriate for developing countries because of their relatively manageable toxicity and simple dosing schedules. Doctors Without Borders asserts that the combination zidovudine/lamivudine/nevirapine is patented in 75% of the African countries surveyed by Attaran and Gillespie-White. Treatment advocates also allege that drug companies intimidate and penalize countries that explore the use of WTO regulations allowing compulsory licensing.

Treatment advocates continue to press multinational pharmaceutical companies to make AIDS medications more accessible. They achieved a significant victory when GlaxoSmithKline announced in early October 2001 that it would grant a license to South African manufacturer Aspen Pharmacare to produce generic versions of its patented AIDS drugs AZT, lamivudine (3TC), and Combivir (AZT and 3TC).

The Case of South Africa

The issue of treatment access in sub-Saharan Africa has often centered on South Africa, the country with the greatest number of people living with HIV/AIDS. To date, the South African government has done little to provide care and treatment for the nearly five million HIV-infected South Africans. Part of the delay stems from President Thabo Mbeki's reluctance to declare AIDS a national emergency—a measure that would permit compulsory licensing of generic drugs, but might discourage vital foreign investment. Mbeki has also resisted acknowledging that HIV causes AIDS, a position that aroused considerable controversy during the 13th International AIDS Conference held in Durban, South Africa, in July 2000. The government has refused to provide antiretroviral drugs, claiming that they are too expensive and that their efficacy and safety are not yet proven.

Not surprisingly, the issue of patents plays a part in South Africa's AIDS policy. According to TRIPS, South Africa is allowed to issue compulsory licenses, and several years ago the government introduced new legislation to make it easier to import generic medication. But South Africa has been pressured by the U.S. and other Western countries not to pursue compulsory licensing or parallel importing.

Three years ago, 39 pharmaceutical companies, including most of the world's largest, launched a lawsuit to block implementation of South Africa's 1997 Medicines Control Act, which permits the import and manufacture of generic antiretrovirals. Faced with significant public outcry, the pharmaceutical industry withdrew the lawsuit in April 2001—a landmark victory for treatment advocates that was widely seen as placing renewed pressure on South Africa to come up with an effective treatment plan for its citizens.

Recently, AIDS activists achieved another significant victory, with a lawsuit against the South African government itself. In January 2001, South Africa announced that it would implement a pilot project, using nevirapine to prevent mother-to-child transmission (MTCT) of HIV at 18 sites. However, the advocacy group Treatment Action Campaign (TAC) claimed that the government's proposal included only six percent of South Africa's pregnant women and filed a lawsuit, calling on officials to expand the program nationwide.

On December 14, 2001, Judge Chris Botha ruled that the government policy not to expand the distribution of nevirapine beyond the 18 existing pilot sites was "not reasonable" and that the government had to make the drug available to all women giving birth in public hospitals. Judge Botha also ordered the government to implement a nationwide program to reduce MTCT of HIV, including counseling, HIV testing, and follow-up treatment.

The South African government has appealed the decision, but local politicians, medical experts, and religious leaders have been increasingly challenging state restrictions on anti-HIV drug distribution. In recent months, five of the country's nine provinces have either told their doctors to administer nevirapine to HIV-infected pregnant women or announced their intention to make the treatment available in the near future.

"[The ruling] is the most powerful statement yet of the harmfulness of the government's AIDS policies in general, and its policies on mother-to-child HIV transmission in particular." —Manny da Camara, Democratic Alliance (Associated Press, 12/14/01)

Provincial officials have played an important role in the uprising against the government's AIDS policy as they have been more aware of the daily impact of the disease at the community level. Prominent politicans and figures such as Nelson Mandela have also publicly voiced dissent with the government, and efforts to expand treatment access in South Africa have gained significant momentum. For example, Doctors Without Borders has begun importing anti-HIV drugs from Brazil for distribution in township clinics. And in late February 2002, a South African government-commissioned study, conducted by the independent Health Systems Trust, recommended that nevirapine be made available immediately to all HIV-positive pregnant women in the country.

Beyond Drug Pricing

While the high cost of antiretroviral drugs is a major barrier to treatment access for people living with HIV/AIDS, it is not the only issue. Pharmaceutical firms and treatment advocates alike realize that cost is just one of many barriers to ensuring treatment access in developing countries. Most notably, many developing countries lack the infrastructure needed to deliver HIV/AIDS drugs and ensure proper patient management.

Antiretroviral therapies cannot be administered effectively without significant investments in diagnostic tests and services, as well as competent medical care. Health care professionals must be trained to assist patients in adhering to rigorous and complex antiretroviral therapeutic regimens and coping with adverse side effects. (Failure to take antiviral medications as prescribed increases the chances that HIV will develop new drug-resistant strains.)

Second, even with steep price reductions, antiretrovirals will be too expensive for many people with HIV in Africa, Asia, and Latin America. U.N. Secretary-General Kofi Annan is spearheading a multinational fund to help subsidize the purchase of HIV/AIDS medications and facilitate the building of essential health care infrastructure.

The Bush administration has approved a contribution of $200 million to the Global Fund for AIDS, Tuberculosis, and Malaria for 2002. However, total contributions to the fund thus far total less than $2 billion, a far cry from the $10 billion experts agree is needed to fight AIDS in the developing world. Many believe that some form of debt relief will also be necessary to allow developing countries to increase their investments in public health.

Finally, developing countries will be unable to ensure treatment access for the growing numbers of people living with HIV/AIDS without strong government leadership. For example, one reason that Brazil has been successful in producing and distributing generic AIDS drugs is the active and outspoken support provided by President Fernando Henrique Cardoso and his predecessor.

In early October 2001, Secretary-General Annan met with the CEOs and senior executives of seven of the world's leading research-based pharmaceutical companies and senior officials of the World Health Organization (WHO) and UNAIDS to discuss the issue of access to HIV/AIDS care and treatment in the developing world.

They issued a joint communique stating that reducing the prices of AIDS drugs is an important step toward expanding treatment access, but that in order to fully address HIV/AIDS such reductions must be accompanied by additional financial resources, greater political commitment, and a comprehensive strategy that encompasses prevention, diagnosis, and care. The meeting participants agreed to join forces with other partners in the fight against AIDS, including employers and their workforces, NGOs, and faith-based groups and missions.