WHO/WTO Summit on Access to AIDS Drugs Recommends Differential Pricing System

The World Health Organization/World Trade Organization three-day summit in Norway on AIDS drug access ended yesterday, with most conference participants agreeing that assigning medicines different prices for different countries is a "feasible means" of making anti-AIDS drugs more affordable for developing nations. This practice, called differential pricing, was "widely" believed to be a good step toward solving the problem, according to a WTO/WHO release. Adrian Otten, director of the WTO's Intellectual Property Division, said, "Although participants clearly approached the issues from different points of view, there was broad recognition that differential pricing could play an important role in ensuring access to existing drugs at affordable prices, particularly in the poorest countries, while the patent system would be allowed to continue to play its role in providing incentives for research and development into new drugs" (WTO/WHO release, 4/11). WHO Director-General Gro Harlem Brundtland noted that differential pricing could lead to a 90% to 99% reduction in some drug prices (Brundtland speech text, 4/11). However, the conference attendees also agreed that policies must be put in place to ensure that cheaper drugs for developing nations do not "fin[d] their way into rich country markets," as such safeguards are "[c]ritical" to the success of the program. Some summit participants were "concerned" that the lower prices for developing nations might be used as "reference points for price controls in industrialized countries." Conference participants agreed that a "wide mix of options" is needed to successfully implement a system of differential pricing, and they suggested a variety of efforts, such as creating "the right conditions" so that the market determines differential pricing; offering discounts that are negotiated bilaterally between companies and purchasers, which could include bulk purchasing; issuing licenses agreed to voluntarily between patent owners and generic manufacturers; and implementing global procurement and distribution systems.

Patent Laws and More Money
Although differential pricing was a central theme of the conference, participants also discussed existing patent laws and the need for additional international funding to fight HIV/AIDS in Africa. Brundtland said, "We heard from the experts that much lower prices can be achieved for the poorest countries. Equally important is strengthening health systems, and, for the poorest countries, securing additional international financing." Participants "acknowledged" that protecting intellectual property rights is "an important incentive for research and development into new drugs," but some said that other ways of encouraging R&D need to be explored as well. The conference found that countries "need to be able to make use of the public health safeguards built into the TRIPS agreement," including provisions allowing compulsory licensing and parallel importing. Several participants felt that competition from generic drug makers also plays "an important role" in controlling prices and improving production efficiency. In the area of international financing, the conference concluded that "significant amounts" of money from other countries is necessary to both purchase anti-AIDS drugs and help improve existing health care systems so that the drugs can be distributed effectively (WTO/WHO release, 4/11). In her closing remarks, Brundtland noted that three areas of discussion need further analysis, including how to "handle" differential pricing for "middle income countries," which "represent a potential market for the diversion of cheaper drugs." In addition, trade and health officials need "greater clarity" on what is legal and what is illegal concerning parallel trade. She concluded that for all of the possible solutions discussed at the conference, "predictability and sustainability must remain the watchword" (Brundtland speech text, 4/11). The conclusions reached at the conference will be discussed at WHO's Health Assembly next month and at a special discussion on intellectual property rights and drug access held by the WTO's Council on TRIPS (WTO/WHO release, 4/11).

AIDS Groups 'Disappointed' With Summit
AIDS groups have criticized the summit for failing to bring about concrete promises from drug companies to lower the prices of AIDS drugs for developing nations. In a joint statement, five non-governmental organizations "expressed disappointment" over the conference's outcome, stating, "No real progress was made to bring drug prices for the essential drugs down." The summit's organizers, however, said that "no binding decisions had been planned" for the session (Mellgren, Associated Press, 4/11). ACT UP/Paris criticized the summit's purpose, stating that the meeting was based on the "absurd and wrong hypothesis ... that the solution [to drug access] would lie with the philanthropy of western laboratories." The group says that the right to compulsory licensing outlined in the TRIPS agreement "must not be undermined," but instead "must become the rule" (ACT UP/Paris release, 4/6).