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Copyright 1999 The Chronicle Publishing Co.  
The San Francisco Chronicle



LENGTH: 1925 words

HEADLINE: World Trade Showdown;

Activists, Industry Split Over AIDS Drugs;

Manufacturers fight affordable access

BYLINE: Sabin Russell, Chronicle Staff Writer

At the Washington, D.C., headquarters of Ralph Nader's Consumer Project on Technology, Jamie Love is reveling in the global attention.

It was Love's office that first promoted the idea that costly AIDS drugs could be brought cheaply to poor countries by sidestepping pharmaceutical industry patents -- an idea that has recently caught fire.

"We were completely unsuccessful for five years on this thing," he said. "Now, we're kicking ass."

Understood by only a handful of advocates a year ago, the topic will be spotlighted next week at the World Trade Organization's conference in Seattle -- debated at meetings and championed in demonstrations on the streets outside.

Allied with AIDS activists and Doctors Without Borders (the recent winner of the Nobel Peace Prize), Love's organization developed a strategy to invoke little-known WTO rules that permit poor countries to manufacture drugs ordinarily protected by patents.

Drugmakers are alarmed. An internal memo by the International Federation of Pharmaceutical Manufacturers Associations, which was obtained by The Chronicle, warns that "the current and foreseeable environment at the WTO is very dangerous for the R&D industry."

The industry's own success in fighting AIDS in Western countries has highlighted the gap in access to drugs between have- and have-not nations.

Combinations of newly developed antiviral drugs have helped cut the U.S. AIDS death rate in half since 1996. But at a cost of more than $1,000 a month, such therapies are hopelessly out of reach for Third World countries, where 90 percent of the world's people with AIDS reside.

Buried in the WTO rules, say Love and other activists, are two tools that could bring low-cost drugs to the poor:

-- "Compulsory licensing," which allows a country to force a drug company to license its patent to a local manufacturer.

-- "Parallel importing," which permits poor countries to shop the international market for the lowest price drug, instead of paying the rate charged in their countries by companies that own the patent.

With this twin combination, hard-hit nations might produce their own AIDS pills and cut the prices they pay by more than 80 percent, advocates say.

However, drugmakers see these tactics as an assault on "intellectual property" protections, without which companies won't make the megabuck investments in research and development needed to discover new drugs for AIDS, tuberculosis, malaria and other global killers.

They want tighter limits on the use of compulsory licenses and are working toward a worldwide ban on parallel imports.

"We don't believe parallel importing is proper," said Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug-industry trade group. "A lot of parallel imports come from places like India, and half the time there are no active ingredients. It's killing patients, causing drug resistance and giving false hope."

Grayson said the issue is far more complex than simply marking down the prices drug companies charge.

"It's a question of governments making their choices," he said. "South Africa just spent $3.5 billion on fighter jets from Europe. Just what are they protecting with those jets if they say they are going to lose half their country to HIV?"

But a summerlong hounding by AIDS activists of Vice President Al Gore at campaign appearances already has forced the Clinton administration to rethink its opposition to efforts by South Africa to cut the cost of its AIDS drugs.

As late as February, a State Department lawyer boasted in a memo to Congress of "a full-court press" to stop South Africa from adopting compulsory licensing of life-saving drugs. Drugmakers had sued in South African courts to block a law permitting the practice.

But by September, the drug companies had suspended their lawsuit and Washington agreed to stop threatening South Africa with trade sanctions -- acknowledging that the country was on firm ground under WTO rules.

Although South Africa has yet to carry out any plan to make cheaper AIDS drugs, Thailand's Government Pharmaceutical Organization said on November 12 that it intended to seek a compulsory license to make the AIDS drug ddI from patent-holder Bristol-Myers Squibb. The same WTO rules that permit compulsory licenses also require negotiation of royalties payments to the drug patent holder. Thailand would have become the first nation to take that step.

Dr. Tido von Schoen-Angerer, of Doctors Without Borders in Bangkok, said the goal was to produce ddI in Thailand for 66 cents a pill, instead of the $1.23 charged by Bristol-Myers Squibb. Thailand's bid was strengthened, he said, because ddI was originally developed by U.S. scientists at the National Institutes of Health.

"We have a situation here where a drug continues to be priced unaffordable to Thai people by a company that has not itself invented the drug. I call this profiteering," he said.

But within days of the Bangkok announcement, the effort to gain a license was suspended. The Thais instead are negotiating with Bristol-Myers to lower the price.

"We do not believe compulsory licensing is the way to go," said Bristol-Myers spokeswoman Jane Kramer.

The outcome of Thailand's dealings with the New York drug giant will be closely watched, for it may set a precedent for how developing countries can manage the manufacture of their own AIDS drugs, or determine what discounts drug companies are willing to give countries that can't afford Western prices.

At the WTO conference in Seattle, the activists will attempt to build on the momentum.

"This issue is not going to go away," said John James, who publicized Love's campaign in his San Francisco newsletter AIDS Treatment News. "Ninety percent of the people in the world needing HIV medications are not able to afford them."

At Seattle, it is unlikely that the rules governing compulsory licensing and parallel importing will be either strengthened or weakened. The U.S. position, which drug companies support, is that the rules governing these issues -- contained in an agreement called Trade Related Aspects of Intellectual Property Rights (TRIPS) -- should not be reopened for discussion.

But some nations still may push for modifications of TRIPS, which requires WTO members to comply with international patent laws by January 1. Venezuela, for example, wants the patent compliance rules suspended for "essential medicines," a list of life-saving drugs compiled by the United Nations.

While the industry hopes to keep discussion of drug patents off the WTO agenda, the international drugmakers federation has laid out its positions should the matter arise. The goals include measures that would:

-- Make it more difficult for countries to shop for lower-priced drugs on the world market.

-- Make it harder for generic drugmakers to gain regulatory approval for their products.

-- Extend patent protection for new drugs "delayed" by drug approval processes.

-- Prevent countries from blocking patents of plants and animals.

-- Increase penalties for counterfeiting of patented drugs.

The group's internal memo also calls for strengthening WTO agreements "in order to counter adverse consequences of government interventions intended to protect public health . . . or contain health care costs."

PhRMA spokesman Grayson argues that intellectual property protection can advance public health goals and that pharmaceutical companies have a long track record of social responsibility.

"We've spent more than any other industry trying to get medical services to Africa," he said.

The drug manufacturers insist that there are no simple solutions to the international AIDS crisis. The triple-combination drugs that are saving lives in the United States and Europe require sophisticated laboratory tests to monitor the type of drug and dosage. Most poor countries do not even have the money to buy the simplest AIDS diagnostic tests.

Dr. Richard Laing, of the Boston University School of Public Health, said that bypassing patents won't begin to solve the drug access problem in the poorest countries. "The vast majority of drugs on the World Health Organization essential-drug list are off-patent. Despite that, access remains poor."

Laing said that if compulsory licensing is used by developing countries, it will make more sense to apply it to production of the most cost-effective drugs -- those that can cure rather than just control disease. For example, the anti-fungal drug fluconazole can cure a variety of diseases within a short time frame, whereas AIDS antiviral drugs work best only in three-drug combinations, have serious side effects and must be taken over a lifetime.

The sorry experience of tuberculosis control in developing countries also should give AIDS activists pause, said Laing. Although common TB strains can be cured by a combination of antibiotics costing $20 to $30, incomplete therapy can breed drug-resistant strains that respond only to drugs costing $2,000 to $3,000.

"If AIDS drugs are used badly, resistance will develop and people will transmit the resistant virus," he said.

AIDS activists, however, plan to keep the issue in the public eye during the Seattle conference. "There will be teach-ins, lobbying and protests," said Sydney Levy, campaign director for the International Gay and Lesbian Human Rights Commission.

Promoters of lower-cost drugs to developing countries hope to persuade trade ministers to impanel a WTO working group to look into access to "essential medicines," perhaps in concert with the U.N.'s World Health Organization.

AIDS activist Eric Sawyer, co-founder of the Health Gap Coalition and someone whose life has been saved by antiviral drugs, typifies the passion that is driving American AIDS activists to the international arena. At AIDS conferences, he has sat side by side with activists from developing countries who do not have the same access to antiviral drugs.

"I watch them die in front of my eyes. It rips me apart," he said.

As a prominent international activist, Sawyer gets e-mails from colleagues overseas begging for supplies of the triple-combination drugs. "I have to say, I wish I could help you, but I can't.' "



Drugs that treat HIV and the many opportunistic infections of AIDS are extraordinarily expensive, but their cost varies from country to country. Below are some cost comparisons for commonly used AIDS drugs.

(Price for 100 units in U.S. Dollars(x))


                                       South  Burkina
                        USA  Germany   Africa   Faso   Nicaragua  India 
 (100 mg AZT)          $147    $278     $110     $55     $220     $42 
(Crixivan 400mg)        224     272      n/a     274      n/a     n/a 

(Epivir 150 mg)         377     524      455     158      n/a     115 
(Fluconazole 150 mg)  1,124   1,535    1,740   1,275      646      55 

(x) In countries where multiple brands are available, only lowest price is listed

Source: Health Action International,, Chronicle Research

GRAPHIC: PHOTO (3), (1) Opponents of the World Trade Organization marched in San Francisco on Saturday.Many protests are planned next week in Seattle. / Chris Stewart / The Chronicle, (2) A Zimbabwean mother who has AIDS hugs her daughter. AIDS is ravaging sub-Saharan Africa, and AIDS activists are taking advantage of WTO rules to help provide cheaper access to drugs in places such as Zimbabwe. / BostonGlobe, 3) An infant infected with HIV is cared for in Cambodia. Drugs that have helped fight AIDS in the West are out of reach for most people in the Third World. / Associated Press

LOAD-DATE: November 24, 1999

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