Newsweek Investigates Who ‘Pays for AIDS’

"Big Pharma has a big problem," Newsweek/MSNBC.com reports in its online March 19 issue, referring to growing concerns that the pharmaceutical industry is more interested in turning a profit than in supplying its much-needed HIV medicines to developing countries. As drug firms developed better -- and more expensive -- antiretroviral medications over the last decade, the developing world, home to 95% of the world's HIV cases, was "shut out" (Power, Newsweek/MSNBC.com, 3/19). Only a "tiny minority" of HIV-positive Africans are able to pay for private AIDS therapy, and "even fewer get it for free," but "those numbers are jumping as the prices for trademarked retroviral drugs collapse" (Masland, Newsweek/MSNBC.com, 3/19). The pharmaceutical industry has been responding to increasing opposition to the high cost of AIDS drugs by significantly reducing prices in Africa and other poor regions, despite its worries that "the poor don't have enough money to afford even cheap drugs." In an address to the entire company, GlaxoSmithKline CEO Jean-Pierre Garnier said, "I don't want to be the CEO of a company that only caters to the rich. ... I want those medicines in the hands of many more people who need them." GSK, holder of the "largest arsenal of AIDS drugs," is struggling to devise a business model that will permit the firm to increase drug access to the poor and sick, while concurrently yielding a profit and ensuring the investment of millions in research and development, Garnier said. But the drug industry faces considerable challenges, including the fact that many developing nations do not have the physicians needed to administer the complicated drug regimes and fears that discounted drugs will "make their way back to higher-priced markets through back channels," with Westerners also demanding lower prices. "The developed world must be willing to pay reasonable prices for medicines in order to cover costs for developing countries. Essentially we must be allowed to generate revenue for R&D in Europe, the United States and Japan, while transferring the benefit of this research, basically for free, to the developing world," Garnier wrote to European Commission President Romano Prodi last fall. Drug companies argue that the current protests against them "cloud the core issue: a lack of aid from the North to buy drugs."

On Patents and Pricing
Vikki Ehrich, head of GSK's external relations for HIV/AIDS, said that the current lawsuit the drug company has filed with 38 others against a South African law that would permit the importation and manufacture of cheaper drugs, is "not about health," but about a "vague law on patents," adding, "Patents do not block access to medicines." Instead, she said, blocked access can be blamed on a "lack of political will and health care infrastructure in AIDS-devastated countries." But Toby Kasper, coordinator of the Access to Essential Medicines Campaign for Doctors Without Borders in South Africa, said that drug companies "make a lot of noise about wanting to improve access to medicines. Now here's a chance for them to do something about it, and they're suing to block it." In 1997, when "tiered pricing was still considered blasphemy," Glaxo Wellcome (which recently merged with SmithKline Beecham to form GSK) HIV Manager Peter Young argued that it was ethically wrong for drugs to be priced out of the reach of those who need the treatments the most. Glaxo local managers were permitted to cut prices for the combination drug Combivir, "with the idea that increased volume would compensate for lower prices." However, this system "didn't work," and local managers feared financial losses. GSK is currently working on a plan due in June that would provide managers with an incentive to reduce prices. But "changing from a company that sells a few pills at high prices in the developing world to one that sells high volumes to the masses will require a revolution in the corporate culture," Newsweek/MSNBC.com reports. Last May, GSK joined a U.N. initiative to sell Combivir in developing countries for only $2 per day, a price company spokesperson Philip Thomson calls "sustainable ... for now" (Power, Newsweek/MSNBC.com, 3/19). Kasper welcomes such price reductions, saying they help Africa "move to a place where Africans can talk about AIDS as a chronic condition." Doctors Without Borders Mission Director for Kenya Jean Luc Anglade agreed, "This is the first time I'm confident that we will be able to start (dispensing drugs) soon. The numbers will depend on how cheap the drugs will become" (Masland, Newsweek/MSNBC.com, 3/19). Newsweek/MSNBC.com concludes that the pharmaceutical companies' "de facto surrender to tiered pricing may ease the war against them. But will it alleviate the AIDS crisis?" (Power, NewsweekMSNBC.com, 3/19).