Copyright 2000 Federal News Service, Inc.
Federal News Service
February 24, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 7170 words
HEADLINE:
PREPARED TESTIMONY OF DR. HARVEY E. BALE, JR. DIRECTOR-GENERAL INTERNATIONAL
FEDERATION OF PHARMACEUTICAL MANUFACTURERS ASSOCIATIONS (IFPMA)
BEFORE THE SENATE COMMITTEE ON FOREIGN RELATIONS
SUBCOMMITTEE ON AFRICAN AFFAIRS
BODY:
Introduction
Mr. Chairman and other Members of the
Subcommittee: I am the Director- General of the International Federation of
Pharmaceutical Manufacturers Associations (IFPMA), based in Geneva, Switzerland,
representing the research-based industry in over 55 countries. The
Pharmaceutical Research arid Manufacturers of America (PhRMA) is one of our
important members. We represent our industry before the., World Health
Organization. the World Trade Organization, the World Bank, the World
Intellectual Property Organization and other UN agencies, and the OECD. We are
also full partners in the Global Alliance for Vaccines and Immunization (GAVI)
and the Medicines for Malaria Venture (MMV).
Our mission is to seek to
work with international agencies and national governments to find new ways to
bring the therapeutic technologies and know-how of our industry together with
efforts to reduce disease burdens. We also address the most important conditions
necessary to strengthen the capability of our industry to continue to develop
innovative therapies and vaccines: i.e., intellectual property rights,
competition-based health care delivery systems, effective product regulatory
systems and open information delivery policies for health care professional and
patients. We are here today to focus on one of the most serious global threats
to public health globally and the worst threat to Africans' well being and the
economic development of the Sub-Saharan African region. The research-based
pharmaceutioal industry is strongly committed to helping people living with
AIDS - who walt for better and less costly therapies and,
hopefully in the not-too-distant future, a vaccine or vaccines to effectively
prevent further HIV infections. I will seek to relate our perspective on this
serious problem and to suggest what is needed.
The Seriousness of the
HIV/AIDS Pandemic
HIV/AIDS is indeed
the public health crisis in Africa. Over 34 million, people in
the world are currently infected with HIV/AIDS, with 95% of
those living in developing countries. Most tragically, over 13 million children
have lost one or both parents_ Twothirds of those infected live in sub-Saharan
Africa, and more than 80 percent of the world's
HIV/AIDS deaths have been in this region.
HIV/AIDS is now the number one killer in
Africa, taking more African lives each year than all the
conflicts in the region combined, and HIV-related illnesses are an additional
burden on already weakened public health services. According to WHO's 1999 World
Health Report, HIV/AIDS has become the disease with the
greatest impact on mortality in Africa. Indeed, life expectancy
in Africa is declining because of AIDS, and in
some places may fall back to 1960s levels, according to Dr Peter Plot, Executive
Director of the Joint United Nations Program on HIV/AIDS
(UNAIDS). This would mean a drop in expected life spans from 59 years in the
early 1990s to just 45 years by 2010. As Dr. Plot recently noted,
"AIDS in Africa has become a full-blown
development crisis, and is on its way to becoming the single greatest threat to
human security on the continent...Few sectors of African society remain
untouched by AIDS. The epidemic is wiping out health, social
and economic gains that Africa has worked towards for decades."
Furthermore, AIDS is decimating the most productive elements of
African society. UNDP Administrator Brown declared at the first meeting of the
UN Security Council this year that "an extraordinary depletion of the region's
human capital is underway. There are estimates that the number of active doctors
and teachers in the most affected countries could be reduced by up to a third in
the coming years." *
Industry's Key Contribution: Searching for Cures
The pharmaceutical companies responsible for the discovery, development
and supply of medical products for managing HIV/AIDS are
acutely aware of the urgent need to tacklethe epidemic in
Africa arid other parts of the developing world. We are devoted
to finding hope for those affected by the tragedy unfolding before us, as
literally millions of men, women and children are swept away to untimely deaths
by the rising AIDS pandemic. We call upon all parties, national
governments and international organizations to take coordinated strong action to
fight AIDS. We in industry are prepared to participate in
augmenting our contribution to the struggle against AIDS, based
on our special expertise and scientific and technical resources.
Industry's primary role in combating HIV/AIDS worldwide
is through its unique role in the discovery and development of new vaccines,
medicines and treatments for disease and disorders. Indeed, it is important to
recall that, twenty years ago, AIDS was not yet identified. At
that time AIDS was considered untreatable as well as incurable
subjecting those infected with HIV to certain misery and untimely death. Today,
there are about 1 $ antiretrovirals on the global market, with
more in the industry's research pipeline. This tremendous advance in treatment
is possible thanks to file billions of dollars that theindustry has devoted to
AIDS medicines and vaccine research, including research into
treating opportunistic infections related to AIDS. Today, there
are over 100 new AIDS medicines in our industry's R&D
pipeline, including 35 new antivirals and 10 vaccines for HIV prevention. Such
research will, we hope, one day yield: shorter-course treatments, such as
nevirapine from Boehringer- Ingelheim for preventing mother to child trammission
of HIV; more convenient and tolerable regimens, such as tests of"one-pilla-day"
regimens being tested by various researchers, including Bristol-Myers- Squibb;
as well as scientific breakthroughs which could open up whole new avenues to
fight HIV, such as a recent announcement by Merck scientists that they have
found two experimental compounds which were able to obstruct the activity of an
enzyme called integrase that plays a critical role when the
AIDS virus infects cells. New treatments developed by the
pharmaceutical industry and introduced in the last several years- e.g.,
antiretrovirals (including the protease inhibitors and non-nucleoside reverse
transcriptase inhibitors) as well as anti-infectives and antifungals to combat
opportunistic infectionshave begun to change the pattern of the
AIDS epidemic.
Industry R&D can only continue when
there is respect for and implementation of protection for intellectual property
rights which promote and protect such research. The challenge now is to improve
therapies and the search for cures, continue to extend access to these
breakthrough medicines to all affected populations and ultimately to develop an
effective vaccine - or several vaccines. Allowing market incentives to proceed
without counterproductive interventions is vitally important in creating an
environment favorable for developing new vaccines, treatments and possible cures
for HIV and AIDS-related conditions. Drug research and
development by the research-based pharmaceutical industry is financed by
companies' own internal resources, and on average it takes hundreds of millions
of dollars to research, develop and test a new medicine, including treatments
for AIDS. It is vital that this research is not hindered by
quick-fix solutions such as compulsory licensing, parallel
trade and other measures which may sound attractive to some in the short term,
but would fatally retain R&D into HIV/AIDS related
medicines in the medium and long-term, disappointing the hopes of millions who
look for a cure for AIDS. Today, we no longer speak of
"incurable diseases"- .... only those diseases for which we have not yet
developed a cure or vaccine.
There are real concerns about
access to AIDS medicines in Africa and
elsewhere, but this access has little to do with patents, and weakening patents
would not- I repeat, not- significantly improve access for reasons discussed
below.
First, many developing countries are not yet TRiPS-compliant and
some such countries, such as India, already produce generic copies of patented
AIDS drugs. If patents were indeed the problem, large
populations within these countries should have easy access to these copied,
generic versions of AZT and other medications; but in India and parts of
Africa this is demonstrably not the case.
Second, the
cost of a pharmaceutical product is only a small part of the overall
AIDS treatment costs, including training, patient diagnostics,
treatment supervision and safe drug distribution - elements absolutely essential
to ensure the effective use of complex AIDS treatment
regimens.Third, the ex-manufacturer price of drugs in developing countries is
often only a small part of the final retail price for consumers due to high
import tariffs, taxes and wholesale and retail distribution margins. In America,
these mark-ups may add perhaps 40-60% to costs. In Africa, they
often add 100-300 % to ex- manufacture prices.
Fourth, parallel trade
and systematic compulsory licensing regimes (which were
abandoned by Canada and New Zealand 10 years ago), weaken patent protection, but
are claimed as cost saving policy instruments by advocates. Actually, when one
observes price differences across national boundaries one is seeing differences
in retail priceswhich are reflective of many factors including the margins
mentioned previously and which do not form a baals for parallel trade, ln any
cas% where parallel trade exists (e.g., within the European Union) evidence
shows that the benefits of parallel trade to consumers are small because such
trade mainly benefits the parallel traders, not consumers, because the former
capture most of the "rents" arising from the differences in ex-manufacturer
prices across countries. Some activists promote compulsory
licensing as another "solution" to access to AIDS
drugs. Such advocates present compulsory licensing as a way to
create a more competitive market akin to post-patent generic competition in the
United States and a few other industrialized countries. However, as
compulsory licensing is a deliberate action by governments, it
can lead to a limited number of licenses being issued, with recipients
potentially being chosen due to political favors rather than objective criteria_
Thus, price benefits may be minimal, while the quality of a copied version may
not be equivalent to the original.
Finally, many of the millions of,
people of Africa earning less than a US dollar a day, and their
governments, cannot afford good quality generic versions of
AIDS drugs either. Patent-pirated versions appear in
Africa, and their prices are often not significantly lower. And
there are bottom limits to prices, set by costs; and at these levels the unit
costs (especially when the rest of the full costs of a treatment are added in)
are well beyond the capability of the poorest patients who need the most help.
Partnerships and New Incentives for R&D
We believe that the
AIDS crisis requires a comprehensive, multisectoral response,
led by committed governments and intergovernmental institutions - the World
Health Organization and the World Bank. We must as a coalition of stakeholders
(1) step up educational campaigns to change attitudes and behavior to curb the
spread of HIV; (2) enhance the capacity of health systems to deliver essential
medical care to the people living with the disease; and (3) encourage further
innovation into new therapies and vaccines while improving access to existing
ones in regions such as Africa. We must also recognize that the
problem of access to drugs for AIDS and related conditions is
one aspect of the broader issue of access to adequate health care generally.
More generally, innovative approaches may be needed to attack disease
patterns in the poorest countries. And more resources are required. Fortunately,
novel approaches arebeing explored. For example, UNICEF, WHO, the World Bank and
UNAIDS arc looking at ways to guarantee a market for vaccines for diseases
predominant in developing countries, picking up on an idea of creating a fund
(to purchase vaccines) raised initially by Professor Jeffrey Sachs.
The
Medicines for Malaria Venture (MMV) is another example of innovative
public/private sector partnerships to address the need to develop new medicines
for special categories of diseases -- in this case malaria. This public-private
sector partnership in the Medicines for Malaria Venture (M V) designed to
develop new antimalarial drugs is an excellent investment of resources to find
new treatments for this widespread disease, which infects millions of people in
developing countries, while researchers search for an effective antimalarial
vaccine to protect future generations. We would urge the Congress and
Administration to financially back the public/private MMV initiative, joining
several other countries that have already done so. The financial requirements to
contribute positively are relatively small compared to the very large potential
benefits that will accrue to millions of malaria-threatened populations in
Africa and elsewhere.
Other mechanisms should be
explored as well. These include developing policy measures similar in concept to
US orphan drug legislation, which includes tax credit and market exclusivity
provisions. We note positively the proposal by the Administration to set up a
market-based mechanism to support vaccine development for HIV, malaria and
tuberculosis. New incentives should not be limited to vaccines, however.
Breakthroughs in drug treatments may come more quickly than new vaccines and may
provide cures, which would have an important impact on quality of life for those
millions already living with these diseases. As with all innovative drugs, the
investment in developing new antiretrovirals and researching an HIV vaccine is
immense. The continually mutating nature of HIV adds additional complications to
the search for more effective treatments as well as possible vaccines or even
cures for AIDS. We must accept that, despite the progress being
made, bringing an effective treatment, cure or vaccine to market will be a long
and demanding process. Despite the large amount of research being conducted into
HIV/AIDS, most estimates still reflect a view that a very
effective vaccine may still be at least five or more years away.
Industry Partnerships in the Fight Against AIDS and
Other Diseases Threatening Africa's Health and Development
Individual companies are working in partnership with the public sector
and civil society to fight against AIDS worldwide, particularly
in Africa. Such partnerships include the following:
--
For over ten years, GlaxoWellcome's "Positive Action" and Merck's "Enhancing
Care Initiative" have been offering support to communities for education,
training, and social action projects to improve their capacity to deliver care
to people in developing countries; GlaxoWellcome also partnered with UNICEF,
providing sharply discounted antiratroviral products for projects in the Mother
to Child/Transmission (MTCT) Program as well as providing its products at
substantially discounted prices through the UNAIDS HIV Treatment Access
Initiative Pilot Program. GlaxoWellcome has also played a leading role in the
Global Business Council on HIV/AIDS, bringing business leaders
from many industry sectors together to develop, in cooperation with UNAIDS and
NGOs, an effect/re corporate response to the epidemic.
--
Bristol-Myers-Squibb has committed $100 million for
HIV/AIDS Research and Community Outreach in five African
Countries under their "Secure The Future (TM)" Program, focusing on women &
children in South Africa, Botswana, Namibia, Lesotho and
Swaziland. An example of efforts supported by this initiative is a joint study
of HIV-1C, a strain of HIV particularly prevalent in Africa,
conducted by the Harvard AIDS Institute and the government of
Botswana, supported by a USS18.2 million grant from BMS. Launched in November
1997, the UNAIDS HIV Drug Access Initiative is designed to develop innovative,
effective models to improve access to needed drugs to treat HIV, its
opportunistic infections, and sexually transmitted diseases in the developing
world. The Initiative seeks to address the many challenges of developing-country
drug access, such as lack of medical infrastructure, drug distribution channels,
drug supply, professional training, and patient support through facilitating
collaboration among pharmaceutical companies, health care providers, national
governments, nongovemmental organizations, and people living with
HIV/AIDS. Pilot projects designed to increase access are
underway in Uganda, Vietnam, Chile and the Ivory Coast. Pharmaceutical partners
in the UNAIDS initiative include: GlaxoWellcome, F. Hoffmann-LaRoche, Vireo NV,
Bristol-Myers.-Squibb, Organon Teknika;. Merck&Co., and DuPont Pharma.
There are also Industry initiatives in the eradication and prevention of
other serious diseases impacting developing countries: AIDS is
by no means the only serious threat to the well-being of the poorest developing
countries.
Often overlooked are the extensive activities of
companies contributing their patented or off-patent medicines or technology for
specific diseases of poorer countries. These programs were launched and are
succeeding because as preconditions governments were required to fully commit to
the success of the campaigns. This commitment is critical and offers lessons for
the attack against AIDS in Africa and
elsewhere. Examples of such company actions include:
Merck has donated
ivermectin free of charge for as long as it is needed to fight onchocerciasis
(river blindness). Key international partners involved with Merck have been the
WHO, World Bank and the Carter Center. -- SmithKline Beecham and Merck are
donating albendazole and ivermectin (two antiparasitic drugs for lymphatic
filariasis) free of charge for use in countries where LF in endemic. This also
done with support of WHO and other agencies. -- GlaxoWellcome is donating a
antimalarial combination drug (Malarone) free of charge to the public sector in
malaria-endemic countries for treatment of cases which are resistant to standard
first-line treatments. -- To help in WHO's global fight to eradicate polio,
Aventis Pasteur has donated 50 million doses of oral polio vaccine to cover the
vaccine needs for NationalI
Immunization Days scheduled in five conflict
affected areas in Africa in 20002002. Countries to be covered
are Angola, Liberia, Sierra Leone, Somalia and South Sudan. -- Pfizer is
donating an antibiotic azithromycin to combat trachoma in 5 developing countries
(Morocco, Ghana, Malt, Tanzania and Vietnam) in collaboration with the Edna
McConnell Clark Foundation. -- Recently, Aventis Pharina donated the patent
rights on life-saying eflornithine to WHO to treat African trypanosomiasis
(sleeping sickness). This concluded a 15year old public/private sector
collaboration between Hoechst Marion Roussel and WHO, during which the
development of the drug and its approval by drug authorities were finalized. The
partnership in the effort to ensure efficient distribution of this drug includes
WHO, Aventis and NGO's. Heffmann -La Roche has conducted the "Sight & Life
Program" dedicated to the prevention of xerophthalmia and other adverse effects
of vitamin A deficiency that impairs the health of children in numerous
developing countries. In this initiative, Hoffmann-La Roche donates vitamin A in
many countries in Africa, Asia and Latin America, as well as
educational materials.
There are other industry-wide efforts to improve
health worldwide in partnership with the public sector including:
The
new Medicines for Malaria Venture (MMV), started in partnership between WHO,
pharmaceutical industry and other parties has been established to stimulate the
discovery and development of new treatments for this wide-spread disease. We are
seeking to develop a new anti-malarial therapy every 5 years beginning in this
decade. We do not preclude, indeed we hope, theta new malaria vaccine might also
come from the MMV or separately.
-- The IFPMA and its vaccine company
members are in full partnership in the Global Alliance for Vaccines and
Immunization (GAVI). Through the Alliance, member partners will address ways to
accelerate the development and introduction of new vaccines specifically needed
by developing countries. The vaccine industry members of the IFPMA will, in
cooperation with their GA'VI partners, work to ensure accessibility to the
vaccines and other relaxed elements that arc necessary for the immunization of
all the world's children, with a particular focus on poor populations and
countries. -- The WHO/CEO Roundtable process involves not only a yearly meeting
between the Director-General of WHO and CEOs of IFPMA's companies, but also
WHO/industry working groups on issues relating to research & development,
drug quality and access to drugs. For example, the WHO/CEO Roundtable process
supports the "Malaria Pathfinder'' initiative, which is a joint WHO/industry
program examining ways to sustainably improve antimalarial access and rational
use at the household level (in some cases, at the district level) as measured by
improvements in rapid procurement and dispensing of appropriate treatments. A
joint communique on the most recent meeting of the WHO/CEO Roundtable is
available on the IFPMA and WHO web sites: (http://www. ifpma, org and
http://www.who.int/medicines/).!
Barriers to Access to Health Care
It must be recognized that only a committed effort by national
governments can be effective in fighting AIDS, as the spread of
AIDS is very much linked to poverty and underdevelopment which
make people more vulnerable to becoming infected with HIV. Furthermore? there
are several barriers to access to health care, barriers which industry can play
only a limited role in overcoming. Indeed, the manufacturers' cost of
pharmaceutical products is small in comparison to the overall distribution costs
required to reach populations affected by AIDS or even to the
retail price paid by the end consumer.
Understanding barriers to access
is extremely important because they would make even free-of-charge
anti-retrovirals impossible for people living with AIDS in
Africa to access regularly and effectively, making treatment
useless and even possibly dangerous. Indeed, inappropriate use of these powerful
drugs can and has resulted in strains of HIV developing which are resistant to
all known treatments, making our search for a cure even more difficult. Also,
due to the complexity of ARV regimens and the possible to,dc side effects of
these powerful drugs, appropriate medical support and careful monitoring is a
vital part of using ARVs. According to UNAIDS and WHO. certain services and
facilities must be in place before considering the use of antiretrovirals in any
situation: -- Access to functioning and affordable health service.,; and support
networks into which ARV treatments can be integrated so that the treatments are
provided effectively; -- Information and training on safe and effective use of
ARVs for health professionals in a position to prescribe ARVs; -- Capacity to
diagnose HIV infection and to diagnose and treat concomitant illnesses; --
Assurance of an adequate supply of quality drugs; -- Sufficient resources should
be identified to pay for treatment on a long term basis; patients must be aware
that treatment is "for life"; -- Functioning laboratory services for monitoring,
including routine hematological and biochemical tests to detect toxicities, must
be available; -- Access to voluntary HIV counseling and testing (VCT) and
follow-up counseling services should be assured, including counseling people
living with HIV/AIDS on the necessity of adherence to
treatment.
The barriers to access detailed below make it very difficult
and even impossible to create the infrastructure described above which is so
vital for the effective use of antiretrovirals and other medications for
treating AIDS and related conditions. Therefore, examining
access to AIDS health care from a broader perspective will help
policy-makers focus their attention on reforms in the areas likely to have the
greatest impact.
Military, Social and Political Issues
--
Military spending priorities: The existence of international and civil wars in
many developing countries increase peoples' vulnerability to HIV-infection and
prevent people living with AIDS from being treated. Even in
countries where there are nowars or external threats, governments give a higher
priority to spending money on "defense" than on healthcare, including
AIDS.
-- Lack of priority due to political cynicism:
Effective treatments are being offered by companies (often at substantial
discounts) and cheaper therapies are becoming available. Yet, in some countries,
groundless excuses for not increasing spending on AIDS
treatments, such as an alleged excessive toxicity of antiretroviral
AIDS drugs, have been made. These excuses mask the basic
cynicism that some governments have concerning treating poor people living with
AIDS or in preventing mother-tochild transmission of
AIDS. A very recent article in the African press quoted a
government official from the region as saying thai trying to prevent
mother-to-child transmission in impoverished areas would only shift the cause of
mortality later on. In other words, the government that this official serves is
making policy based on the cynical observation that poverty and malnutrition
could lead to the same result as HIV in the motherless and impoverished child.
-- Tolerance of corruption: In countries where official
corruption is prevalent, health care access is impeded through the pilferage and
diversion of products and services, with the poorest elements of society being
harmed the most.
-- Inefficiency and wastage: UNAIDS has found that,
although the World Bank and other international agencies make money available
for AIDS projects in Africa, much of it goes
unspent because of bureaucratic complexities and other problems;
--
Literacy and language barriers: If the patient is illiterate and/or does not
understand the language used by, the health care providers, then they will have
difficulty in accessing care;
-- Minority (including ethnic ?r gender)
groups may experience discriminatory attitudes from health care providers.
Illegal immigrants may fear discovery or be not entitled to full access to
health care facilities, thus hindering their access to care; * Stigma: the
stigma attached to being HIV-positive in many cultures has led to ostracization,
abandonment, violence and even murder of people living with HIV. In light of
these dangers, people will refuse to be tested for their HIV status and, if they
do discover that they have HIV, they will be afraid to seek appropriate
treatment due to the possible repercussions if others were to find out their
status.
Financial Hurdles
-- The shortage of financial resources
in the poorer developing countries is the most important barrier to access to
health care, including medicines, in these countries. International
aid agencies, as well as industrialized countries, often play
an important role in financing health care infrastructure in the poorest
developing countries.
-- In many countries in Africa
and elsewhere, governments require patients to 'co-pay' for therapy costs
(including diagnostics, training, health care infrastructure, etc.), ranging
from $35 to hundreds of dollars per month. Clearly few can
afford such payments; so that less than 1% of HIV infected patients receive such
therapy. (In comparison, in Brazil a much higher percentage of infected persons
receive therapy; but Brazil is aided by World Bank funds.) -- Many countries due
to insufficient resources can provide not even rudimentary health care. For
example, annual spending on health in some African countries is under
US$4 per capita. This lack of spending can also result from
governments not setting health care services, including care for people living
with HIV/AIDS, as a high enough priority in determining the use
of national resources.
-- Inadequate purchasing power for medicines and
a lack of an adequate number of medical professionals and hospital facilities to
deliver health care result from this lack of adequate financial resources.
Physical Infrastructure Barriers
Lack of physical access to
health care facilities or personnel is another major barrier to access in
developing countries. There are several factors leading to such inadequate
access;
-- Adequate clean food and water is needed. Therapy for
HIV/AIDS requires healthy food intake in some relation to the
time of drug ingestion as well as access to clean water. Both are often missing
in the developing world - Inadequate health care facilities to meet the needs of
a growing population due to insufficient public and private resources.
-- Insufficient transportation infrastructure to permit access to
medical care providers for much of the population.
-- Unequal
distribution of health care facilities that may be concentrated in densely
populated urban areas, leaving wider, rural areas without adequate coverage.
Bad Micro-Economic Policies
- Protectionism: Many governments
protect their local insurance and pharmaceutical companies from foreign
competition, making local insurance and pharmaceutical costs higher than they
should be. Tariffs imposed on imported pharmaceuticals raise drug cost margins
to patients. In developing countries, the final price to a consumer is often 3-5
times the price received by the manufacturer, whereas in developed countries,
the ratio is often less than twice the manufacturers level.
--
Non-competitive distribution networks: Protected wholesale and other
distributors can artificially raise distribution margins, making drug costs in
developing countries high - perhaps even higher than in some developed
countries.
-- Poor Intellectual Property Protection: The lack of
adequate and effectively enforceable intellectual property rights hurts access
to health care and pharmaceuticals by eliminating incentives for research and
development of new products in at least two ways: (1) local firms in countries
with good scientific infrastructure devote resources to copying (often without
regard to Good Manufacturing Practices (GMP)) instead of focusing on research
into diseases prevalent locally; and (2) countries which allow international
patent exhaustion (i.e., parallel trade) discourage local pharmaceutical
investment and the offer of companies to supply the local market on terms that
local patients and governments would find more advantageous.
-- Price
Controls: Governments may look at price controls as one solution to access.
However, price controls tend to damage incentives for research and
developmentindustry, they can also negatively affect the development of a
GMP-based local generics industry. Furthermore, price controls destroy
competition and usually evolve from being limits on price increases (or
'ceilings') to become fixed price 'floors' preventing consumers from enjoying
benefits of market competition. One need only look at comparisons in changes in
post- patent prices between Europe, where price controls exist, and the United
States.
Informational Gaps
* People may fail to access health
care due to a lack of information about the need to treat diseases such as
tuberculosis, hepatitis, or hypertension.
-- Patients may not know how
or where to access health .:are (particularly in the cases of minorities or
immigrants).
-- Self-medication by poorly informed patients may lead to
ineffective drug utilization.
-- Poorly informed physicians in
developing countries often treat illnesses such as diarrhea inappropriately with
antibiotics or they may not always be aware of the most coax-effective therapy.
-- There is often the lack of information about the quality of generic
products. In most developing countries, providers and patients prefer brand name
products because they are unsure of the origin, safety -and reliability, of
generic products.
-- Lack of adequate training for inspectors and
regulators regarding pharmaceutical product quality issues hinders people's
access to quality health care. Such insufficient training allows substandard and
counterfeit drugs to enter national markets, which endangers the population's
health, engenders uncertainty about the effectiveness of treatments, and often
crowds quality out of the market.
-- Gray-market or illegal workers not
contributing to the national tax system may be excluded from the social and
workers health insurance system of their country of residence.
Cost and
Price Issues How important are price and cost issues? We firmly believe that
they are secondary or tertiary problems in Africa compared to
those discussed above. Some have charged that patents for pharmaceutical
products reduce access to these products. This focus on patents (and prices)
ignores the complexity of the access to healthcare issue and prevents
policy-makers from considering real solutions to this issue. This is recognized
by patient groups and public-sector decision-makers alike.
For
example, the European Coalition of Positive People publicly stated with regard
to HIV/AIDS drugs recently that focusing on patent protection
and pricing is "simplistic and fails to 'take into account the serious practical
problems that need to be addressed..." Drugs could be free and still not be
appropriately used without adequate health care systems In fact, they would
rapidly become ineffective. The cost of drugs to patients in
Africa is determined principally by distribution,
infrastructure, training and other factors discussed above. The issues of
patents and prices of AIDS drugs are not the key
issues.Approaching the access issue solely through debates over price is not
only simplistic, as norad above, but also factually incorrect. PatenTs do not,
in fact, have an influence on access to the drugs, which the population in
developing countries actually consumes. These are primarily off-patent drugs;
for example, almost all of the products on the WHO Essential Drug List are
off-patent. Furthermore, many developing countries do not currently have
TRIPS-compliant intellectual property legislation and the poorest of these
countries will not be required to implement such legislation until 2005, perhaps
even later if they apply for a longer transition period. Therefore, access to
the drugs for which this population is looking is not inhibited by patent
protection. Indeed, developing countries without effective patent protection
have already started producing their own versions of patented
AIDS products, including India and Brazil.
An
additional indication that prices are not the major barrier to access to drugs
is shown by the experiences of several companies when they instituted the
programs (mentioned specifically above) to donate their products for free or at
dramatically reduced prices. Drugs that had been offered at a zero price could
not find their way to patients until the barriers and issues were addressed that
constitute the real obstacles The targeted populations could only receive the
drugs they needed after national governments and international agencies
undertook concrete actions to ameliorate these barriers to access.
One
would expect that, if intellectual property protection were really a barrier to
access that some claim that it is, there should be no problem for the population
of these countries to obtain drugs at "affordable" prices. However, the evidence
shows otherwise: Again, why is it that in India -- where patent protection is
not required by TRIPS and where unprotected copies of AIDS
drugs (patented in Europe and elsewhere) are available from a number of local
producers --that there is a drug access problem and the AIDS
epidemic is reaching alarming proportions?
Accepting the alleged, but
spurious, links between intellectual property fights, prices, and access to
pharmaceuticals could lead political decision-makers to institute policies such
as parallel trade and compulsory licensing, which destroy the
basis upon which further scientific progress is based: intellectual property
rights. By threatening to take away the fruits of innovative companies' labor,
the advocates of compulsory licensing and
other attacks on intellectual property rights are driving research-based
companies away from working on diseases particularly affecting developing
countries. If there are to be cures and vaccines for diseases and conditions
that are currently incurable or untreatable, further research must be protected
and encouraged. After all, before one can realistically talk about gaining
access to drugs and vaccines, these substances first need to be discovered,
developed, tested and registered, a costly process taking years to accomplish.
Without protection, companies simply cannot devote l:he huge resources
(literally hundreds of millions of dollars) necessary for bringing new products
to market.
V. Conclusions and Recommendations
Industry, which
has much experience -- not only in developing the drugs available today to
patients everywhere and in developing the drugs and vaccines in the pipeline
fortomorrow's use - but also in health care delivery systems experience which
can be brought to the table if asked to do so - firmly insists that there are a
number of key elements to resolving the AIDS crisis. They are:
1) Partnerships among public institutions and with the private sector is
the only effective mute. Recognize that no single solution will solve this
problem. We in industry are working on more effective therapies and vaccines,
but delivery will be a critical problem and this involves several key issues,
including the following:
2) Political commitment and concrete actions by
countries affected to prevent the spread of AIDS and to treat
those affected. Raising AIDS awareness and as a priority is
vital. Prevention through education must be a high priority. Regarding funding,
as UNAIDS' Executive Director has noted, pumping money into a country where
AIDS is a low priority will not end the epidemic. "If a country
does not recognize that it has an AIDS problem, then it is not
willing to take on the tough questions," Dr Plot said. "Outside support for
something that can only be solved from the inside will not work." Figures in
1997 show that international aid paid for the bulk of the
millions spent on AIDS prevention in Africa in
1997. Uganda accounted for much of the money that the African countries spent.
National priorities in Africa need to be shifted away from arms
and weapons towards healthcare, including AIDS care, if this
epidemic is to be fought effectively;
3) International funding is needed
to meet the crisis: Bridging the cost gap, in the case of drugs and future
vaccines, between costs and prices of AIDS products and what
people in poorer countries can afford will need new international financial
support.
4) Infrastructure and distribution improvements: So much of
current drug supplies are wasted. Why is it that the price paid by a patient for
quality AIDS and other drugs in parts of
Africa and other developing countries is three to five or more
times the price received by the manufacturer- because of the level of taxes,
tariffs, monopolistic distribution systems, etc. -- so that if you were to cut
the manufacturers' price by, say, 50%, patients would not significantly benefit;
and then if you counted in The cost of the health support services needed for
AIDS treatments, a drug price reduction may not reduce overall
costs of delivery at all.
5) Serious Partnerships: Our companies have
been working with UNAIDS and countries on the pilot projects but supplying
medicines and expertise in their use. Industry knows that it must contribute in
this extraordinary crisis. But true partnership is required, not one-way
partnership. For example, not all countries have responded positively to
mother-to-child program offers of medicines, even at discounted prices. It seems
that some countries prefer to use legalistic approaches to undermine patents
instead of working together with industry. Partnership means we all must be
committed. As a sign of the seriousness which the industry gives to partnership
efforts, IFPMA and major pharmaceutical companies haverepresented the
research-based pharmaceutical industry in deliberations of the International
Partnership Against AIDS in Africa organized
by UNAIDS, most recently in New York at a meeting convened by UN
Secretary-General Kofi Annan. This partnership brings together stakeholders in
this issue, including donor countries, NGOs, the private sector and the African
countries themselves. It is our hope that this dialogue will create effective
and practical ways for all of us to work together to fight the
AIDS menace.
6) One of the most critical elements of a
global strategy is fostering continued innovation through academic and
industrial R&D. The industry has responded to the need for
AIDS medicines and has spent billions of dollars to make
current treatments available; but we are not there yet. We do not yet have a
cure. We do not have a vaccine. We are working on them. Over 100 new medicines
are in the industry's development pipeline, including second-generation protease
inhibitors, new drugs for opportunistic infections and vaccines against HIV. But
without a strong patent system we would not have these medicines today or in the
future. Attacking patents on AIDS medicines would means causing
industrial R&D to shift away from AIDS research to more
research on heart disease, cancer, depression, ctc. The only winner in a
strategy to weaken patents is the industrial copier or parallel trader, and the
loser is the AIDS patient worldwide who is waiting for help.
One caveat must be raised here. We cannot, in addressing the
AIDS crisis, neglect the importance of addressing other serious
threats to the health of Africa and other poor regions of the
world. Malaria, TB, hepatitis, respiratory ailments and other diseases may
become equal dangers in the future. I urge the Congress and Administration to
support public-private initiatives such as the Medicines for Malaria Venture and
the Global Alliance for Vaccines and Immunization. Let's also explore new
vehicles for developing new vaccines and drugs talcing the tax credit and market
exclusivity aspects of the US Orphan Drug legislation as examples of possible
approaches that may be needed in addition to traditional patent protection.
In closing, I want to convey the desire of the R&D pharmaceutical
industry that IFPMA represents to work more with countries, WHO, UNAIDS and
other parties on this most serious matter for Africa. With
resolve and with positive partnerships, we believe that we all can make a real
difference.
END
LOAD-DATE: March 2,
2000 
