Copyright 1999 The Chronicle Publishing Co.
NOVEMBER 24, 1999, WEDNESDAY, FINAL EDITION
SECTION: NEWS; Pg. A1
LENGTH: 1925 words
World Trade Showdown;
Activists, Industry Split Over
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
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
"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
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.
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
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.
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
"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
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
-- 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.
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
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.
AIDS drugs are used badly, resistance will develop and people
will transmit the resistant virus," he said.
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
"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.' "
OF AIDS DRUGS
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
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,
Drugstore.com, 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
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