This document provides background information and summarizes the debate over Compulsory Licensing for AIDS-related Pharmaceuticals in Africa and the Tax Credit for AIDS Vaccine Research and Development. The links to the left will lead you to public documents that we have found.
Although no
cure has yet been found for the AIDS virus, there has been substantial progress
in the development of drugs that slow down its progress and ameliorate its
symptoms. Consequently AIDS victims in the industrialized countries of the
world can be treated with a potent "cocktail" of AIDS drugs that
helps extend and improve the quality of their lives. The drug AZT, for example,
is effective in working against the transmission of AIDS from mother to fetus.
As heartening as this progress has been, AIDS continues to devastate some
poor and developing countries of the world. A number of African countries
have epidemic-levels of AIDS incidence. Getting AIDS drugs to AIDS victims
in Africa is no small problem and policymakers in Washington have struggled
to find a way to get expensive drugs to people who have no way of paying for
them.
One of the vehicles
for addressing this issue was the Africa Growth and Opportunity Act in the
106th Congress. A provision was introduced in Congress that forbid the United
States Trade Representative from protecting patents on AIDS drugs in the countries
of sub-Saharan Africa. In other words, a manufacturer could make a generic
version of patented AIDS drugs and sell them in Africa without having to pay
a licensing fee. The original manufacturers argued that they had incurred
the research and development costs of bringing the original drugs to market
and could not afford to just give away their products for a nominal return.
As one drug lobbyist told us, "Basically, they said that if you don't
provide your AIDS drugs at low cost, we'll confiscate your patents."
Not surprisingly,
then, the drug companies fought the inclusion of the compulsory licensing
provision in the legislation. According to the drug companies, their concerns
about this provision extended beyond the abrogation of property rights to
the pragmatic realities of fighting AIDS with drugs in Africa. The lack of
a public health infrastructure was cited as a fatal problem. It's difficult
for a drug regimen to work in a developing country unless there is a means
of educating people about dosage, side effects, and safety.
Given the political
difficulties of enacting compulsory licensing and the substantial obstacles
to actually implementing effective programs in the field, some in advocates
believed a different approach was needed. For any society a vaccine is far
preferable than ongoing drug treatment, but this is especially true for developing
countries. Yet there is no vaccine for AIDS. Although there is a substantial
market for such a vaccine in the industrialized world, and thus incentive
for drug companies to discover such a prophylactic, market incentives are
weak for the development of vaccines for diseases such as malaria that are
largely confined to countries in the developing world-countries which have
little in the way of resources to pay for such drugs. Thus, some advocates
promoted a research and development tax credit for work by drug companies
trying to develop such vaccines. Some advocates supported the tax credit as
an alternative to the compulsory licensing provision, whereas others viewed
both the tax credit and compulsory licensing as important to address the problem
of AIDS in the developing world.
Neither approach
proved viable in the 106th Congress. Although the Senate included compulsory
licensing for AIDS drugs in a tax bill, the House voted it down. When the
provision was stripped from the conference report, President Clinton issued
an executive order implementing compulsory licensing. Presidents don't have
a general power to implement policies Congress fails to agree upon, but an
existing statute enabling the president to bypass drug patents in the case
of an emergency gave him the legal standing to do this.