U.S., European Trade Representatives Disagree Over How to Spend U.N. Global AIDS Fund Money

The New York Times reports that the Bush administration and the European Union have waged a "behind-the-scenes struggle" over how to spend Global AIDS and Health Fund money, particularly on prescription drugs. According to the Times, the two sides have "starkly opposing views" on a number of "key" issues. The Bush administration, as well as the pharmaceutical industry, opposes plans to establish a system to regulate world drug prices or a database where drug companies would post prices. In addition, the administration maintains that developing nations must not violate U.S. patent rights and "wants the companies left alone" to offer discounts "when they see fit." The European Union, however, has sided with poor nations and activists who support less expensive drugs for developing nations. Although the E.U. has not announced a "unified European position," a number of leaders and European Council resolutions favor a "tiered pricing system" that would allow poor countries to purchase low-cost generic drugs from nations that "ignore" Western patents. They also support a plan that would establish a worldwide database to "show prices for all drugs from any supplier and to indicate whether the supplier is considered reliable." President Bush will likely address the drug pricing issues during the G8 meeting in Genoa, Italy, which begins today.

Polar Opposites?
According to Ellen 't Hoen, a drug price specialist with Doctors Without Borders, "Basically, the European Union is saying that it doesn't want the fund to turn into a subsidy for Big Pharma, and the United States is saying the reverse." In a June letter to European Commission trade representative Pascal Lamy, Robert Zoellick, the U.S. trade representative, "expressed his distress" that the commission had backed a tiered pricing system. He wrote that the Bush administration opposes the "creation of an international institution or convention to regulate drug prices," adding, "I also would question establishment of a verification process." In addition, Zoellick wrote that "maintaining a database on drug prices" may prove "difficult to keep accurate" and that "the sharing of drug pricing information can at times present problems under U.S. antitrust laws" (McNeil, New York Times, 7/20).