Deadly AIDS, Killer System
Drug companies sue to block affordable AIDS drugs in South Africa
Revolutionary Worker #1095, March 18, 2001, posted at http://rwor.org
"We need these drugs in order to survive this catastrophe. We cannot be condemned to death because we are poor."
37-year-old HIV-positive woman from the African country of Malawi
"The issue is about intellectual property. The South Africans, for example, have signed up to something called TRIPS, which is about protecting intellectual property... Companies that make generic copies are pirates on the high seas, who can just take our drugs ...We don't believe in piracy--we tried to stamp it out in the 17th and 18th century."
Sir Richard Sykes, Chairman, GlaxoSmithKline
The epidemic of AIDS has created a huge health care crisis in South Africa. Over 4.2 million people, about 10% of the population, have the HIV virus in the country--more than any other country--and some estimates put the number as high as 20%. A 15-year-old in South Africa has more than a 50% chance of dying from AIDS. Without treatment one-fifth of all adults in South Africa will die of AIDS in the next 10 years.
This is a situation that cries out for the world to solve, using all possible resources. People in South Africa and other countries ravaged by this epidemic need access to health care and drugs for HIV and AIDS. The latest technology in treatment should be available to those suffering by the millions. All this is urgently needed. But capitalism's free market rules of profit-above-everything--are standing in the way of this happening.
On March 5, in an obscene move, lawyers representing the South African Pharmaceuticals Manufacturers Association (PMA) and the top 39 pharmaceutical companies in the world were in court in South Africa to prevent the government from taking steps to make life-saving medications available to the people.
The lawsuit stems from a 1997 law passed in South Africa that would allow the government to import or produce inexpensive generic versions of these AIDS medications. The drug companies immediately filed suit in a South African court to block the law from going into effect.
New drug therapies have made it possible for many people living with HIV or suffering from AIDS in the U.S. to pursue relatively healthy lives. But the new triple drug therapies that are saving lives in the U.S. cost more than $10,000 a year per patient. And they are virtually unheard of in poor countries where the AIDS epidemic is hitting the hardest. For example, Zambia couldn't afford multi-drug AIDS therapy for its population even if it spent its entire national income on AIDS/HIV drugs!
The South African law would allow the government to begin issuing licenses to local firms to manufacture low-cost generic versions of patented anti-AIDS drugs--a process called compulsory licensing. James Love, director of the Consumer Project on Technology, estimates that compulsory licensing would reduce the price of most AIDS-related drugs by 30 to 95 percent. For example AZT, a drug made by GlaxoSmithKline that has been proven effective in inhibiting transmission of HIV from pregnant women to their fetuses, costs $240 a month in South Africa. Indian drug firms manufacture a generic version of the drug that costs $48 a month.
The law also allows "parallel importing"--importing drugs from other than the authorized distributor. In order to maximize profits, identical versions of drugs are sold by the manufacturer for different prices in different countries. For example, GlaxoSmithKline sells its version of the antibiotic Amoxil for $8 in Pakistan, $14 in Canada, $16 in Italy, $22 in New Zealand, $29 in the Philippines, $36 in the U.S., $34 in Malaysia and $40 in Indonesia. Many drugs are more expensive in South Africa than they are in the United States. By purchasing drugs from a parallel (non-authorized) importer it is often possible to save a substantial amount over the price set by the pharmaceutical company.
The drug companies claim that the South African law violates an agreement that is part of the WTO, known as the Trade Related Aspects of Intellectual Property Rights Accord (TRIPS). Under TRIPS, which is being implemented by the WTO around the world, countries are required to honor the patents of pharmaceutical companies which give them exclusive rights to drugs for 20 years. Countries are compelled to agree to these conditions or be excluded from the World Trade Organization (WTO) and isolated economically. Even though parallel importing and compulsory licensing are supposed to be permitted under the WTO and TRIPS, in "emergency situations"--countries which have made moves to do this have been threatened with economic sanctions.
During the last three years, while the new South African law has been tied up in the courts, more than 400,000 people have died of AIDS-related illnesses in South Africa--many because they could not afford expensive medicines. Across the world, drug companies made sales of more than $315 billion in 2000. 4,000 South Africans will die of AIDS this week in South Africa. During the same week the 40 pharmaceutical companies will earn $500 million in profits.
The U.S. Role
Many of the drug companies involved in the South African suit are U.S.-based. And the U.S. government has played a role in opposing the South African law. In February 1999 the U.S. State Department sent Congress a report detailing the U.S. government's two-year campaign against the South African Medicines Act. The report stated that repeal of the South African Medicines Act is "a top priority for the United States government's economic relations with the Republic of South Africa."
According to the report, "All relevant agencies of the U.S. Government--the Department of State together with the Department of Commerce, its U.S. Patent and Trademark Office (USPTO), the Office of the United States Trade Representative (USTR) and the National Security Council (NSC) and the Office of the Vice President (OVP)--have been engaged in an assiduous, concerted campaign to persuade the Government of South Africa (SAG) to withdraw or modify the provisions of Article 15(c) that we believe are inconsistent with South Africa's obligations and commitments under the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)." The U.S. government also put South Africa on a "Watch List" and threatened further trade sanctions.
In late 1999, after protesters confronted Vice President Gore during his presidential campaign, the Clinton administration shifted its policy and stated that it would not take further actions against South Africa as long as they act in "a way consistent with international agreements." The U.S. has not taken further action in the last year, during which the law was not in force anyway. But the pharmaceutical companies have said that if they lose in South Africa's courts they will take the case in front of the WTO. And the U.S. has said that it would take action against South Africa if the WTO rules in favor of the drug companies.
Last year at the time of the Durban International Conference on AIDS, the U.S. made a much-publicized offer of $1 billion to provide AIDS drugs to Africa. On closer examination it turned out that the offer was for export-import loans, at commercial interest rates, to buy American drugs at market prices. This offer, not surprisingly, was turned down.
Meanwhile drug companies have made opportunistic offers--in an effort to head off the threat of countries like South Africa defying their patents and in an attempt to cover their ugly image. In opposition to compulsory licensing and parallel importing, the drug companies have argued for limited price cuts, negotiated one drug at a time, one country at a time, and in secret. These agreements usually carry extensive restrictions and only end up reaching thousands rather than the millions who are in need. For example, Pfizer announced recently that it would make fluconazole (trade name Diflucan), a drug used to treat cryptococcal meningitis, available for free in South Africa. Cryptococcal meningitis is a fungal infection of the brain. It is one of the opportunistic infections that strike people with AIDS. Without fluconazole, people with AIDS who contract this disease usually die within two months.
Pfizer sells the drug in South Africa for $4.15 for a daily dose. A generic version is manufactured in Thailand for 29 cents. Worldwide sales of Diflucan were more than $1 billion in 1999.
"The cumbersome conditions that Pfizer is imposing on its much-publicized offer to provide fluconazole for free to people with AIDS is disappointing," said Eric Goemaere, M.D., of Doctors Without Borders, in South Africa. "Most outrageous is Pfizer's attempt to structure this donation like a clinical trial, adding onerous reporting and training requirements. South African physicians are experienced professionals and it is patronizing to require special training for routine treatments."
In addition Pfizer will not provide the drug free to people in countries other than South Africa who cannot afford it. It will only provide the drug for cryptococcal meningitis and not for other fatal infections that the drug is used to treat. And the company has refused to lower the price to those who are not covered by its offer.
The Case of Brazil
In the early '90s, Brazil faced a serious AIDS crisis. The South American country had the fourth-largest number of reported cases of the disease in the world, with about 2.5 per cent of Brazilians infected--more than 3 million people. In 1998, the Brazilian government began the manufacturing of generic copies of AIDS drugs, and these drugs have been made available to anyone in Brazil with HIV and AIDS for free. The price of these drugs has fallen an average of 79%. The death rate from AIDS has fallen 50%.
Daniel Berman, from Doctors Without Borders, said, "The few developing countries that have achieved significant access for people with AIDS have done so by aggressively pursuing generic strategies. The numbers are staggering: 80,000 people were treated in Brazil through use of affordable generic drugs that brought triple-drug therapy down to a cost of approximately $1000/year. But in Uganda, where the government was working with brand-name drugs in a UNAIDS initiative, less than 1,000 people were treated."
A cover article in the New York Times Magazine by Tina Rosenberg talked about the success of Brazil compared to those countries where use of generic AIDS drugs are being blocked by drug companies: "The drug companies are wrong on how to make AIDS drugs more affordable. Their solution--limited negotiated price cuts--is slow, grudging and piecemeal. Brazil, by defying the pharmaceutical companies and threatening to break patents, among other actions, has made the drugs available to everyone who needs them. Its experience shows that doing this requires something radical: an alteration of the basic social contract the pharmaceutical companies have enjoyed until now." The terms of this "social contract" are that the manufacturers of drugs receive a 20-year monopoly to sell these drugs in some nations at whatever prices they choose--even if it means that millions will die because this makes these life-saving drugs unaffordable to the poor.
Now Brazil's successful program is under attack. Previously Brazil did not have to comply with the TRIPS Accord. It was able to develop a national drug industry and a free treatment program for people with HIV/AIDS precisely because it did not grant patents for drugs. But recently, under TRIPS, Brazil has been forced to extend patent protection to the pharmaceutical industry.
In another attack on Brazil's AIDS program, the U.S. asked the WTO to reject part of Brazil's patent law. The U.S.'s official policy is to pressure developing countries outside of Africa to grant stronger patent protections than required in terms of their TRIPS obligations. It has continued to pressure Brazil into dropping its compulsory licensing provisions. The Consumer Project on Technology reports that such pressure was placed on the Brazilian government last year during a visit by then Commerce Secretary Daley, traveling with executives from drug companies Merck and Pfizer.
Hypocrisy and Lies
The drug companies have advanced several arguments to justify their cold-hearted actions. They claim that poor countries lack a developed enough infrastructure to administer the drugs and that the people in these countries will not follow the instructions on how to take the drugs and that this will lead to resistant strains of the virus. However, as the New York Times Magazine reported, adherence rates in Brazil are not significantly different from the U.S. One study showed that in a clinic in San Paulo, Brazil 69% of patients took their medicine at least 80% of the time. At a clinic in San Diego, 72% of the patients took their medicine at least 80% of the time.
Another argument put forward by the pharmaceutical companies is that if they are not allowed to make large profits from patents that this will hurt research and development.
First of all, drug companies spend twice as much on marketing and administration as they do on research and development.
Second, only about 1% of all drug sales worldwide are in Africa so even if the drug companies sold medicines in Africa at the cost of production it would not significantly affect their profits.
Third, almost no research and development goes into tropical diseases that kill millions each year in the Third World. Out of over 1,200 new drugs introduced between 1975 and 1997 only 13 are for the treatment of tropical diseases and most of these were developed by the U.S. military during its war of aggression in Vietnam to treat its troops. In Africa 40,000 people die horrible deaths every year from sleeping sickness. It is known that the drug eflorithine is effective in treating sleeping sickness. It is so effective at reviving even comatose patients that it is known as the "resurrection drug." However, Bristol Myers Squibb, which holds the patent on the drug, wouldn't even manufacture it for years because it wasn't profitable. Then, recently they started to manufacture it again because it has a second, profitable use--it eliminates facial hair for women.
Finally, many AIDS drugs were developed with public funds. The National Institutes of Health discovered ddI (an AIDS drug marketed by Bristol Myers Squibb as Videx). 4dT (another AIDS drug, marketed by BMS as Zerit) was synthesized by the Michigan Cancer Foundation in 1966 using public funds. Its use as an AIDS treatment was discovered by Yale University, using grants from the federal government. In the U.S., BMS sells Zerit for $4.50 for one 40 mg pill. A generic manufacturer in Thailand can make the same pill for 30 cents. In Thailand, which also has a large number of people with AIDS, Bristol used their influence to prevent the sellers of one of the raw materials needed for ddI from selling to a generic manufacturer. They also blocked access to an antacid buffer needed to pack it into pill form.
It is also an outrage that experiments with AIDS drugs have been carried out in Africa, while millions of Africans cannot even afford to buy the drugs when their lives are at stake. A recent exposure in the Washington Post reported that the drug company Pfizer was being investigated by a tribunal in Nigeria for drug trials that took place during a meningitis outbreak. The drug, Trovafloxacin, was used on 200 children, 11 of whom died. Between 1995 and 1997, the U.S. administered placebos instead of medicine to thousands of HIV positive pregnant women so they could study the effects of women passing AIDS on to their infants. As a result, thousands of HIV women went untreated, their babies were born with the HIV virus.
Worldwide Protests
On March 5, the pharmaceutical companies' lawsuit had a hearing in a South African court. Thousands marched in protest in the streets of Pretoria--in front of the courthouse, to the offices of pharmaceutical companies and to the U.S. embassy. Responding to a worldwide call, there were also actions in Australia, Brazil, Canada, Denmark, France, Germany, Italy, Philippines, Thailand and Britain. In the U.S., protests were held in Boston, New York, Philadelphia, Berkeley, and Washington, D.C.
Just as the trial was beginning, the attorneys for the drug companies opposed a motion by the Treatment Action Campaign in South Africa to join the proceedings in order to speak for people with AIDS in Africa. Ellen Thoen, a lawyer for the French humanitarian group Doctors Without Borders, said, "I found it to be a disgraceful performance by the drug companies. Disgraceful because they are saying the very people they make the drugs for should not be heard in this case."
The drug companies have asked for a four-month postponement to prepare their response to the Treatment Action Campaign motion. The judge gave them until March 28 to present their reply in writing. He said the hearing would resume April 18 and would be completed by April 26.
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"This legal challenge is a warning to other developing countries that many within the world's pharmaceutical industry will use any tactic to defend their patents, whatever the cost in human suffering,"
March 5 Statement by Oxfam
and Doctors Without Borders"Hundreds of people are dying every day in our country because they can't get access to the right drugs. The only thing that is stopping them is the price. I think it's immoral that people are dying just because they're poor."
severely ill South African man with AIDS
17 million people in Africa have already died from AIDS. 25 million Africans are infected with HIV. Around the world, this terrible disease is killing many millions more. Much of this suffering is unnecessary, much of this death is directly caused by the criminal actions of a system that values profits more than the lives of millions.
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