Copyright 2000 The Washington Post
The Washington
Post
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December 27, 2000, Wednesday, Final Edition
SECTION: A SECTION; Pg. A01
LENGTH: 5681 words
HEADLINE:
An Unequal Calculus of Life and Death; As Millions Perished in Pandemic, Firms
Debated Access to Drugs; Players in the Debate Over Drug Availability and
Pricing
SERIES: DEATH WATCH; AIDS,
Drugs and Africa; Pg. 1/3
BYLINE:
Barton Gellman , Washington Post Staff Writer
DATELINE:
ACORNHOEK, South Africa
BODY:
A River. Sounds of drowning. Struggling men, women and children,
more every hour, engulfed.
This is the image of AIDS
that pulled Paul Pronyk to Africa, 8,000 miles from a clinical
practice near Boston. There, he fought the virus patient by patient. Here, he
does little more than study it. In three years of local epidemiology, Pronyk has
joined the helpless consensus on AIDS in
Africa: that prevention may contain history's worst pandemic,
but the millions swept up in it already are beyond hope.
"We've got to
look farther upstream, to stop all the new people from falling in," Pronyk said
in an interview outside the Elite Funeral Parlor ("Open 24 Hours--Day &
Night"), the only thriving business in view of his hospital office. "Otherwise,
the people drowning now are going to be endlessly replaced."
That kind
of triage never applied in the United States and other wealthy countries, where
new classes of drugs known as antiretrovirals have stripped
AIDS of its uniformly fatal prognosis. But in
Africa, where 25 million people are infected, fewer than
25,000--one-tenth of 1 percent--receive the therapy that could avert their
deaths. At current levels of intervention, the number of Africans dead of
AIDS in 10 years will probably surpass the population of
France.
The starkness of the global divide between the drowning and the
saved, and its growing political repercussions, galvanized the pharmaceutical
industry and governments this year to pledge help. But scores of interviews in
Europe, Africa and the United States, along with thousands of
pages of records examined by The Washington Post, suggest that nothing
fundamental has changed in the calculus of access to AIDS
treatment.
Behind this year's call to action is more than a decade of
confidential discussions within the pharmaceutical industry and governments.
Corporate boards and regional operating companies weighed the costs and benefits
of pricing AIDS medicines within reach of most of the dying.
With the tacit and sometimes explicit assent of public authorities, the
companies decided the costs were too great.
"The brutal fact," health
economist William McGreevey told an invitation-only World Bank audience on May
22, 1998, was that "those who could pay" for Africa's AIDS
therapy--the pharmaceutical industry, by way of price cuts, and "rich-country
taxpayers," by way of foreign aid--"are very unlikely to be
persuaded to do so."
Despite appearances, that assessment is yet to be
disproved.
A five-company initiative announced in May led to front-page
reports that Merck, Hoffmann-La Roche, Bristol-Myers Squibb, Glaxo Wellcome and
Boehringer Ingelheim would make AIDS medicines widely available
in the poorest countries at deep discounts. But only one of the companies has
disclosed actual price cuts. Internal company projections call for increases in
drug production to cover thousands of new patients in Africa,
not millions. A World Bank economist, Hans P. Binswanger, describes the programs
as "expensive boutiques . . . available to a lucky few."
A parallel
gesture by Pfizer, made two months earlier, amounts to less. Under pressure over
the $ 6,500 annual price for Diflucan, a powerful anti-fungal agent that nearly
one in 10 African AIDS patients require for survival, Pfizer
proposed in March to donate the drug to those in need. Pfizer limited the offer
to South Africa, host of July's international
AIDS conference. Nine months later, Pfizer has signed an
agreement to do what it announced it would do, but shipment has not begun.
New sources of funding for AIDS treatment this year
have also proved illusory. The Clinton administration's high-profile offer of $
1 billion turned out to be Export-Import Bank loans, at commercial interest
rates, to buy American drugs at market price. There were no takers. The World
Bank ended a decade of resistance to writing loans for recurring health care
costs, and announced a $ 500 million AIDS funding pool. But the
bank still regards antiretroviral drugs as "cost-ineffective" in the Third
World, and discourages borrowers from buying them.
"Like most things in
the world, it comes down to money, and nobody has been willing to commit money
to this," said Harvard economist Jeffrey Sachs, who chairs a World Health
Organization (WHO) advisory commission on macroeconomics and health. "To me,
it's as though the Black Death were going on in Europe in the 14th century, and
China were sitting on a cure and saying, 'Why should we help?' We would consider
it the crime of the millennium if that had happened, and yet we seem to be able
to accommodate this without much trouble."
'No More That They Could Do'
The first and pivotal negotiations over global access to
AIDS drugs began in Geneva in 1991. They lasted two years, but
confidential minutes suggest they were doomed the first day.
Presidents,
vice presidents and directors of 18 pharmaceutical giants arrived at the WHO's
glass hilltop headquarters on Avenue Appia on May 23, 1991. Director General
Hiroshi Nakajima described the occasion as a "landmark meeting" to ensure that
"vaccines and drugs against AIDS are developed and produced at
a cost all can afford."
He opened the talks with a sober tour of the
horizon. "By the end of this decade," he said, "there will have been a
cumulative total of . . . 40 million HIV infections--I repeat, 40 million--in
men, women and children. Over 90 percent of these will be in developing
countries."
Rich countries, he noted, had new drugs to improve survival
rates and quality of life. Recent studies showed that Burroughs Wellcome's AZT
slowed the progress of the AIDS virus even before symptoms
appeared. Anthony Fauci, director of AIDS research at the
National Institutes of Health, heralded the 1990s as "the age of early
intervention" against the disease.
But this was not true everywhere.
Patients in poor countries still died in six months or less. The cost of the new
drugs--$ 10,000 or more a year--put them beyond all but the imagination of most
people with the disease.
The Geneva discussions took their starting
point from a concise six-page framework drafted at WHO. Patented new treatments
for AIDS were priced to produce high profits for investors and
support future research. Those prices, the paper said, made the medicines, "even
if technically 'available,' unaffordable to most of those in need." But because
the companies could never hope to sell to the poor at rich-country prices, and
because unit costs of additional production were relatively low, the paper
suggested gently that "a certain flexibility in terms of pricing is available
for developing countries."
Observers looking back from the year 2000,
the paper concluded, would judge whether "the recognition of
AIDS as a truly new global threat" persuaded industry and
public authorities to join in a response "that went beyond 'business as usual.'
"
The executives around the table were not encouraging.
John
Petricciani, a senior lobbyist for the drug companies in Washington, had told
his friend Roy Widdus at the WHO more than a year earlier that the companies
were talking among themselves about "a preferential price to developing
countries for AIDS therapeutics." He said he had even
approached the Bush administration about subsidizing the discount, according to
a memorandum Widdus wrote soon afterward.
But now, in the Geneva
conference room, Petricciani closed the door on AIDS drug
discounts.
"The predominant contribution that the research-based
pharmaceutical industry could reasonably be expected to make is in their
predominant area of competence--research and development," he said, according to
minutes kept under seal in the WHO Registry and obtained elsewhere by The
Washington Post. "The broader responsibility for ensuring that such products are
delivered to those they could benefit should be borne by society, particularly
governments."
Petricciani did have a suggestion. Industry was prepared
to lobby governments and donors, he said, to buy more AIDS
drugs at market prices.
Kathryn Pattishall, chief of anti-infective
drugs for Burroughs Wellcome, argued that her company's AZT could not be used
safely in the developing world. It required clinical and laboratory
support--platelet counts, even CAT scans--that did not exist in most of
Africa. Stephen Carter, a senior vice president of
Bristol-Myers Squibb, said the same conditions would apply to his company's
soon-to-be-approved AIDS drug, didanosine or ddI. He doubted,
he said, that "resources should be devoted" to AIDS drugs in
poor countries "in view of the competing demands of other health problems."
Previous drug subsidies for Africa, Merck Vice
President John Zabriskie told the Geneva group, had involved therapies that were
brief, simple and curative. AIDS drugs were none of those, he
said, and "pharmaceutical companies would not enter similar collaborative
schemes."
"I think we all agreed on that," Zabriskie said in a recent
telephone interview from Boston, where he has retired after taking the helm of
Upjohn and merging it with Pharmacia in 1995. "I sort of lost touch with the
whole effort afterward."
So, in fact, did all the senior executives.
Low-level working groups met sporadically for the next two years, but they had
to content themselves with broad exhortations.
Only gingerly, and
seldom, did the conferees speak directly of drug costs. The pharmaceutical
companies insisted that price had no relationship to the problem of access
because so many other barriers existed in Africa's social,
political and medical systems. The U.N. negotiators in Geneva decided they would
get nowhere by debating economics with their corporate interlocutors.
Yet price, and market fundamentals, were at the heart of the industry's
concern. According to IMS Health, which supplies market data to the industry,
four-fifths of all pharmaceutical revenue--and a still higher fraction of
profits--comes from just seven countries in North America, Europe and Japan. The
whole continent of Africa accounts for 1 percent.
Michael Scholtz, a German national who came to work for the WHO after 21
years as a manager at Ciba-Geigy and SmithKline Beecham, said there are two ways
of looking at that information. On the one hand, lost profits from a price cut
in Africa would amount to no more than "three days' fluctuation
of exchange rates." But "if cheaper drugs in Africa put
downward pressure on the global price, then the core markets of the
pharmaceutical industry are at risk." That pressure, he said, could come from
reexport of cheaper medicines from poor to rich countries, or from a political
backlash if the discounts drew attention to the high profit margins in developed
countries.
That was and is the central dilemma. Drug manufacturers could
afford to sell AIDS drugs in Africa at
virtually any discount. The companies said they did not do so because
Africa lacked the requisite infrastructure. But they had a
strategic reason, too: Fear of killing the golden goose in the United States,
Canada, Germany, France, Britain, Italy and Japan.
Confidential minutes
of a meeting by the U.N.-industry panel, distributed on July 30, 1992,
illustrate the industry's sensitivity. Company negotiators objected, in a draft
statement of principles, to "the term 'affordability' and the related concepts
of 'reasonable prices,' 'commercially favorable terms,' and 'special prices.' "
With the talks stymied, frustration built in Geneva. Christine Norton, a
Jamaican technical officer, complained in an internal memo that senior
executives were no longer bothering to attend the meetings. Perhaps, she
suggested, the WHO could lure them back with upgraded amenities.
"Since
these high-level company representatives are accustomed to 'red-carpet
treatment,' within limits we ought to . . . [find] appropriate 'impressive'
locations," she wrote. "The cocktail party should not be held in the WHO
restaurant but maybe at 'Le Chateau de Penthes.' "
In 1993, the talks
ended.
Looking back, industry representatives say the failure resulted
from the hostility the companies perceived at the WHO. Many executives saw
Nakajima in league with France to dump responsibility on American and British
companies. Geneva, Merck's Jeffrey L. Sturchio said recently, "seemed to be a
huge, faceless bureaucracy that wasn't interested in working with the private
sector."
Widdus, a member of the WHO bargaining team who still works on
drug access from a small basement office, said the explanation is more concrete.
Bringing treatment to Africa, he said, would have required
resources "never heretofore dreamed of."
"No one forked over the money,"
Widdus said. "They literally decided that there was no more that they could do.
Industry didn't have its back up against the wall as they do now."
'Paid
for in Human Lives'
As drug companies balked at pleas for discounts,
their scientists were racing to introduce powerful medicines that would
transform the ethical landscape of AIDS. Jonathan Mann, then
director of the WHO global AIDS program, put it this way in the
last speech before his ouster in March 1990: "Global AIDS
prevention and care will fail if only the rich have access to drugs and an
eventual vaccine."
Mann asked his WHO staff to commission a study: What
would it take to bring the new treatments to the poor?
Until then, the
pressure building on industry centered mostly on domestic needs. The
AIDS Coalition to Unleash Power, or ACT UP, was formed to
protest the launch price that Burroughs Wellcome announced in March 1987 for
zidovudine, or AZT, the first AIDS drug to reach the market. It
cost $ 10,000 for each patient, each year.
"I can't get
AIDS medicine in the Bronx! Don't tell me about people in
Africa," David Barr, of Gay Mens Health Crisis, told Eric
Sawyer, an ACT UP pioneer, in 1993. "It was self-interest," Sawyer recalled.
In any case, price was not the only barrier to antiretroviral drugs in
Africa. In many rural precincts, people did not have basic
antibiotics. Many lived their whole lives without seeing a doctor. Absent the
infrastructure of a health care system, many drugs could not be used
effectively. A Roche distributor told the All Africa News
Agency in August, for example, that "huge quantities" of medicine donated to
Zimbabwe reached expiration and had to be destroyed.
But most public
health authorities rejected the implication that treatment of
AIDS would have to await solutions to all of
Africa's problems of poverty, war and indifferent or corrupt
governments. AIDS drugs could not be compared with simpler
treatments for such ills as pneumonia, but the disease had the advantage of
political attention. If the drugs became affordable, many experts believed,
there would be powerful incentives to build the means of delivering them.
One of the first to consider the practical issues was Sally Jody
Heymann, then 30 years old and fresh from dual Harvard degrees in medicine and
public policy. She took on Mann's assignment, and reported back on Dec. 28,
1990.
AIDS medicines, she wrote, might be brought
within financial reach with "tiered pricing," a formal discount structure
already used with vaccines. Developing countries could further boost their
buying power by pooling purchases and tapping donor-subsidized treatment funds.
Clinical trials would suggest priority populations for early treatment--perhaps
men of peak sexual age, or prostitutes, or patients testing positive for the
virus before they developed symptoms.
Heymann knew she was leaving many
gaps, and noted that it had taken years for global health officials to work
through comparable questions about other new medicines. "Planning should begin
now," Heymann urged. "The opportunity cost of waiting . . . is high and will be
paid for in human lives." If early planning reduced by even four years the lag
between AIDS drug development and wide distribution, she wrote,
"two and a half million lives would be saved."
As it turned out, that
was almost precisely the number of Africans--2.4 million, according to a U.N.
estimate made public Nov. 28--who will die of AIDS this year
alone.
'You Just Can't Do This'
While the drug industry called
for treatment of the poor to be "borne by society," most governments disclaimed
the task.
In Africa through the 1990s, with notable
exceptions in Senegal and Uganda, nearly all the ruling powers denied they had a
problem with AIDS. In any event, they had no resources. In a
1993 report, "Investing in Health," the World Bank described per capita spending
of $ 8 a year as the barest minimum for health care in poor countries. That
would have quadrupled the health budgets on much of the continent.
The
only plausible financing sources outside of industry were donors and lenders of
foreign aid, and they too ruled it out. The opposition arose
not from doubt about the pandemic's severity, but rather from certainty. At the
U.S. Agency for International Development and its counterparts overseas, the
legions of the dying in Africa loomed as a limitless demand on
scarce resources.
No one put that case more succinctly in the early
debate than a medical prodigy named Jeffrey R. Harris. Harris entered the
University of Texas at 16, raced through its medical school by 22 and worked in
epidemiology at the Centers for Disease Control before arriving at USAID. In
July 1986, at the age of 30, he became the U.S. government's senior manager of
AIDS assistance overseas. It was a part-time job.
By
several accounts, Harris saw earlier than most that AIDS in
Africa would be a catastrophe. His response was to channel all
funds into containing the disease, not treating its victims.
"Our
experience, and I think the experience, is that treatment always drives out
prevention," Harris, now back at the CDC, said in an interview. "We were afraid
that if we opened the door on treatment at all, then all of our money would be
drawn away. You get into paying for commodities that have to be supplied,
supplied, supplied, to the end of time."
Prevention undoubtedly cost
less. A day's supply of AIDS drugs would buy a lot of condoms.
Condoms usually stopped sexual transmission of the virus; even the best
medicines did not cure it.
All this presumed there had to be a choice.
The economic arguments on AIDS treatment began with two
premises: that drug prices would stay high, and that AIDS
assistance budgets in the wealthy countries would stay low.
U.S. foreign
aid managers and the World Bank measured the cost-effectiveness
of AIDS treatment using different yardsticks. Sometimes they
compared AIDS treatment with cheaper ways of saving lives, such
as antibiotics for simple infections. The bank, in what it now describes as "a
'classic' study," urged in 1992 that Tanzania fund "only palliative treatment of
opportunistic illnesses," not antiretroviral drugs. Even then, the study warned
against "diverting resources from that which could save lives" for spending "on
treatment of the terminally ill."
Jonathan Quick of WHO's essential
medicines program commissioned a chart in 1997 that sought to illustrate the
same point. For every $ 10,000 spent, he asked, how many lives could be saved
from a sampling of killer diseases? Economists produced a bar graph depicting
9,900 dehydrated children at the top, hundreds of pneumonia and tuberculosis
patients in the middle, and one solitary AIDS victim at the
bottom.
Other arguments measured the impact of AIDS
treatment on national wealth. Dean Jamison of the World Bank introduced the
concept of a "disability-adjusted life year," or DALY, to measure the number of
productive years lost to illness or death. By his calculus, for example, a
country that spent $ 1,000 a year to save the life of someone earning $ 500 a
year would suffer a net economic loss.
On a continent where nearly half
the population lives on a dollar a day, the implications for
AIDS patients were grim.
In Geneva, cost-effectiveness
pervaded the views of the man Nakajima had installed to run the global
AIDS program. Michael Merson made his name in public health
with the cheapest of technologies, a foil envelope of salts. The program he
oversaw delivered single-use packages, measured and ready to mix with water,
that rehydrated children dying of diarrheal disease. The life-saving drink
required no special training, had a commodity cost of about 15 cents a child,
and it worked.
Many observers of Merson's tenure as chief of WHO's
global program on AIDS said he was looking for an equally tidy
intervention. Lacking that, Merson showed much more interest in stopping the
spread of AIDS than in treating it.
"My feeling was we
had to really focus in that critical period on prevention," Merson said in a
recent interview.
Still, he said, an early visit to Uganda seared itself
into his memory. He touched down in Kampala on Sept. 2, 1990, for talks with the
government. Noerine Kaleeba, a local pioneer in AIDS community
care, talked him into an impromptu call on her clinic. Merson was stunned at the
sight of stick-figure patients dying on floors, unable to swallow because of
fungal infections, unmedicated for their pain and "begging, begging for help."
The "awakening" Merson described afterward came on more than one level.
Certainly it wrenched his conscience to see such suffering. But the patients and
their families also taught him that they did not want to hear educational
messages from outsiders who offered nothing for the sick.
In Washington,
Harris began to hear the same thing. John David Dupree, one of his contractors,
"kept coming back from Malawi saying, 'You just can't do this. You can't
continue to talk about prevention without dealing with people's immediate
needs.' "
Reluctantly, Harris concluded that his agency was losing
legitimacy in the populations most concerned about AIDS. Harris
and Kenneth Bart of USAID, with their superior Bruce Langmaid, decided to allow
some U.S. funds to pay for palliative care. Their reasons were mainly tactical.
"We were trying to shoot for a very low proportion" of money spent on
treatment, Harris said, "like 90-to-10 percent, because our goal was to focus on
legitimacy for our prevention efforts."
Risky Business
In 1995,
Glaxo bought Burroughs Wellcome and became the presumptive leader in
AIDS therapy. But first, the company had to decide if it wanted
the business.
Glaxo's first AIDS drug, Epivir, was
about to be approved. It joined a new class of medicines that stopped a vital
enzyme in the AIDS virus, reverse transcriptase, from copying
itself. Wellcome's older drug, AZT, now sold for less than half its initial
price but hung on to a market valued at $ 315 million per year. Combined, the
drugs would make for the first approved "dual therapy" against the
AIDS virus. And none too soon: An authoritative study in 1994
showed that single-drug treatment did not work indefinitely.
Even so,
until shortly before the merger, Glaxo's management gave serious thought to
abandoning the AIDS market. AZT's debut had been a trauma, with
hostile congressional hearings and one outrageous protest after another from
activists who more than once stopped trade on the New York Stock Exchange.
Protesters were calling the company the "Evil Empire."
Goran Ando, who
headed Glaxo's research and development team, "was saying, 'What the hell are we
getting into this for?' " recalled Peter Young, a Glaxo manager who left in
1999. Glaxo Wellcome, he said, was debating, " 'Do we want to be in this
disease?' You have to be a glutton for punishment in terms of political
visibility and even abuse."
The company's clinical products division
argued for keeping the AIDS drugs, and eventually prevailed.
Glaxo embraced the two-drug therapy, eventually marketed the combination as
Combivir and poured new funds into AIDS research.
At
the same time, the poisonous turf battles among U.N. agencies had unraveled the
WHO program, and sponsoring governments created a new Joint United Nations
Program on AIDS, or UNAIDS. Jos Perriens, the new
organization's team leader for drug research, wanted to know more about the new
combination therapies and the prospects of making them widely available. He
needed an opening to a major company, and he found it on Nov. 10, 1995.
Glaxo Wellcome had scheduled a meeting of its scientific advisory board
in the Thai resort town of Phuket. Perriens had a friend on the board, Joep
Lange, co-founder of an Amsterdam-based AIDS research center.
Lange invited Perriens to Thailand in hopes of introducing him to someone from
Glaxo.
The opportunity came at dinner at the Meridien Hotel. Lange and
David A. Cooper, a leading Australian virologist, invited Perriens to join their
table with Peter Young. Young had recently become Glaxo's vice president for
AIDS and opportunistic infection therapeutics.
Talk
turned "very quickly to, 'Can we get antiretrovirals to developing countries?' "
Perriens said. "Peter said the price problem should not be impossible to solve.
He had obviously already been considering differential prices within his
company."
Young, in fact, saw a double opportunity: to boost sales
volume and to place Glaxo in the refreshing role of advancing public health for
the poor. "If you've got a medical intervention that works, and people can't get
it, you can't just shut that issue away and say, 'I'm sorry, it's not my
problem,' " Young said in an interview.
Behind closed doors in the
advisory board meeting the next day, Young began to air his thinking. "From a
commercial perspective," he said, according to the board's confidential record,
"if we are able to treat hugely increased numbers of patients in this part of
the world, the pricing that we would expect to realize must be different to what
is currently used."
Anticipating objections that cheaper drugs in one
country would be diverted into higher-priced markets in another, Young added:
"If on the fringes there is some parallel trade, I'm sure we'll complain, but in
the scheme of things it will be a small percentage of the total."
Young
told colleagues he expected "a conservative reaction from [higher] management"
to his ideas. With reason. Young was proposing to risk his industry's proven
business model: low-volume, high-margin sales in the wealthiest countries.
'TRIPS' and Triple Therapy
At about the same time as Young made
his proposal, two forces collided: rapid movement toward an integrated global
economy, and a radically more effective generation of AIDS
treatments. The effect was to spread awareness of new medical miracles to places
that had no hope of sharing the benefits.
The collision came over drug
patents. In industrialized countries, patents established a social contract:
Invest the time and money to develop a valuable medicine, and society grants
monopoly pricing power for 20 years.
Beginning in 1993, at the urging of
the drug industry, the Clinton administration pressed to extend patent
protections worldwide. When a new legal entity, the World Trade Organization,
was born on Jan. 1, 1995, its rules included a new agreement on Trade Related
Aspects of Intellectual Property Rights, commonly cited as
TRIPS.
In short, any country that wanted to take part in the global
economy had to respect the exclusive marketing rights of patent holders. Some
125 countries joined the WTO immediately and another dozen have joined since,
with deadlines for patent compliance ranging from this year to 2006.
It
did not take long for the poor countries to conclude that the social contract on
drug patents did not work as well for them. New drugs were indeed developed, but
they did not reach most of those who needed them. And, with untested exceptions,
the trade rules now forbade developing countries to make or buy unlicensed
generics--as South Africa, Brazil and Thailand began pressing
to do.
Advanced trials were now underway on a new class of
AIDS drugs. These drugs blocked an enzyme, called protease,
that the AIDS virus requires in the late stages of
reproduction. By late 1995, unpublished results--passed by word of mouth among
researchers--found that "triple therapy," involving two older drugs and a
protease inhibitor, reduced the effects of the virus to undetectable levels.
Dec. 7, 1995, brought FDA approval of the first such drug, saquinavir,
sold by Roche under the brand name of Invirase. Two more, from Merck and Abbott
Laboratories, reached market three months later. "This is some of the most
hopeful news in years for people living with AIDS," Health and
Human Services Secretary Donna E. Shalala said then.
And it was. But not
for most of them.
The cost of the standard AIDS
therapy, eight years after the debut of AZT, still began at $ 10,000 a year. It
ranged as high as $ 18,000. But one thing had changed. Now the therapy was not a
question mark. It worked, perhaps indefinitely, and kept most of those who used
it alive.
Among Infants, 'Bitter Deaths'
Health authorities were
soon absorbing the implications of another clinical landmark: A brief course of
an older AIDS medicine prevented infection of newborn babies.
Once again it was AZT and Glaxo Wellcome in the spotlight. A study known
as ACTG 076, after a consortium known as the AIDS Clinical
Trial Group, showed that the drug, administered during pregnancy and to the
newborn infant, cut transmission from mother to child by two-thirds.
Glaxo was determined to avoid a reprise of Wellcome's battering a decade
earlier, especially with infants as the casualties. Eventually that anxiety gave
Peter Young an opening for his discounting proposal, a year after broaching it
in Thailand.
In Singapore on Jan. 15, 1997, Young pitched "flexible
pricing" of AIDS drugs to the Glaxo Wellcome chairman, Richard
Sykes, and his executive committee. The committee agreed to give managers of
Glaxo's regional operating companies discretion to cut prices in order to boost
volume. It added a confidential proviso that the two-drug package sold as
Combivir would not be priced under $ 2 per daily dose, with lower floors for
sales of the component drugs, AZT and Epivir.
"GW gross margins are
still sufficiently positive at these levels to support reasonable incremental
programme costs and remain profitable," an internal analysis concluded. "We will
make no public disclosure on programme profitability."
Glaxo's
headquarters in Middlesex, England, transmitted the decision to regional
managers. And then--nothing happened, for more than a year.
Under
Glaxo's management system, headquarters staff members could not order regional
or country managers to lower prices. Those managers were held accountable for
profit growth, and few of them believed they could increase sales enough to make
up for price cuts.
"Many of them had a relatively jaundiced view, that
if they drop a price there's no guarantee that the [host] government is going to
step in and make that up in volume," Young said.
As country managers
balked, pressure built sharply on Glaxo. A widely noted editorial in the New
England Journal of Medicine on Sept. 27, 1997, blamed unethical researchers for
"the deaths of hundreds of newborns" because of drug trials that still used
placebos. The failure in developing countries to prevent infant infections using
AZT resulted only from "an economically determined policy of governments that
cannot afford the prices set by drug companies."
Health ministers in
Geneva coined the term " 'bitter' deaths" to describe infant losses "which
mothers know can be avoided today with available technology." On Jan. 27, 1998,
the executive board of the World Health Assembly endorsed a Revised Drug
Strategy giving primacy to public health over commercial interests. Hard on its
heels came a U.N. paper on "Globalization and Access to Drugs," which declared
drug patents in conflict with the human right to equal health care.
The
growing attacks required an answer. "There's absolutely no doubt that concerns
about our intellectual property helped force the issue onto Sir
Richard's agenda," said one Glaxo employee who followed the chairman's thinking.
In March of 1998, Glaxo forced the hands of its operating companies by
exposing their new authority in public. A press release from headquarters
announced that Glaxo would offer AIDS drugs in developing
countries at prices "substantially below Western market levels." Young sent a
memo to startled regional directors, saying the sudden announcement had been
required by "the risk that we would be seen to respond to pressure rather than
undertake a positive self-motivated step."
The genie was out of the
bottle. The British Department for International Development described
mother-to-child transmission in an internal memorandum as "the ethical lightning
[rod] of international discussion on drugs access."
Once pregnant women
got the medicine, they were bound to ask why only their children should be
saved. And if women, why not men? The British memo predicted that "greater
access to [antiretroviral therapy] for HIV-positive women" would accelerate
political demands "for treatment in wider populations."
People were
dying. The drugs existed to save them. And now they knew it.
Staff
researcher Robert Thomason contributed to this report.
About This Series
In a series of articles this year, The Post is examining the
decisions--and missed opportunities--by international organizations, countries,
corporations and individuals that have shaped the advance of
AIDS across Africa, the continent most
affected by the disease. Three articles this week tell the story of how global
pharmaceutical companies responded to the crisis, including a battle over the
prices of AIDS medicines and a recent rush to philanthropy.
Other articles in this series, as well as supporting documentation, links and
live discussions with the authors, are available online at
www.washingtonpost.com.(This graphic was not available) Living With HIV
LOAD-DATE: December 27, 2000 
