The Escalating War Over AIDS Drugs

The battle between Big Pharma and AIDS victims in poor countries is heating up. Former U.S. president Bill Clinton has now thrown his weight behind developing countries that want to offer the drugs at low cost. His charitable organization, The Clinton Foundation, announced agreements Tuesday with two Indian generic drug makers, Cipla and Matrix, to lower the price of AIDS drugs used to treat resistant cases. These so-called second-line anti-retroviral treatments cost 10 times as much as first-line treatments. Under the Clinton plan, the price would fall by 50 percent for middle-income countries such as Thailand and, for low-income countries that already get a discount, by 25 percent. Clinton also negotiated a deal to make a once-a-day anti-retroviral pill available for less than $1 a day.

Clinton’s move comes as Thailand's health minister is in the United States to explain why his country decided in January to defy patents on three drugs. Thailand, of course, has the right to do so, according to a 2001 ruling by the World Trade Organization, which upheld the right of its member nations to decide when public health concerns are urgent enough to supersede intellectual-property rights of pharmaceutical companies. (Brazil announced last week that it intended to follow suit.) Big Pharma and the U.S. government, however, have vigorously opposed the moves. In March, Chicago-based Abbott Laboratories announced that it would not launch any new medicines in Thailand. The U.S. State Department added Thailand to a list of nations that don’t respect the intellectual-property rights of American companies, which could lead to trade sanctions.

The outcome is far from certain. One complicating factor: new patents pending in India could make for an uphill battle for developing nations. And patent laws and pressures from pharmaceutical companies have a long history of fending off challenges. Dr. Tido von Schoen-Angerer, executive director of the Acess to Essential Medicines Campaign at Médecins Sans Frontières (Doctors Without Borders), spoke about the issue by phone from Geneva with NEWSWEEK's Jessica Bennett. Excerpts:

NEWSWEEK: What are your concerns?
Tido von Schoen-Angerer:
This is a step in the right direction, that's for sure. But for the moment, prices are still higher than they need to be. And there are still some question marks [about the Clinton plan]. For some of these drugs, patent applications are pending in India, where they are produced. If these patents are granted, the Indian government would have to issue compulsory licenses to allow the continued production of these drugs.

What exactly is a compulsory license?
It's a fully legal mechanism of the [World Trade Organization for a country] to get around a patent in a specific instance in order to ensure the public health of their populations. But it's very unfortunate that this legal mechanism has been so difficult to use because they've been constantly coming under pressure by the [U.S. government] and pharmaceutical companies.

But if this is a legal mechanism, why the pressure?
Well, it's a real double standard. [U.S. drug maker] Abbott Laboratories, for example, [recently lost a bid in a U.S. district court] for a compulsory license to produce and sell a hepatitis C test that is patented by another company. Yet Abbot has also criticized Thailand for breaking its own patent on the anti-retroviral drug Kaletra. The pressure comes from the U.S. administration. In Thailand, for example, all the pharmaceutical companies together have threatened to stop investing in Thailand.

What about the argument that high drug prices and patents are necessary for companies to develop new drugs?
In the terms of HIV, I think it's clear that the main market is in the U.S. and Europe--this is where the main profits are made and where you get repaid for the research and development. What we've seen is that many developing countries have really lost out double in the sense that some of the new medicines are still not affordable, and at the same time they did not get more innovation for diseases that affect the poor. So I think there have been false promises to countries when they were told to adopt patent laws because they would stimulate innovation for other health problems.

How many people are in need of second-line anti-retrovirals, and why are they so much more expensive than first-line drugs?
What we've seen in our research is that after five years of treatment, about 20 percent of patients need second-line medication. The reason why they're so expensive is really because there has not been enough generic competition. What we're seeing now is a bit of déjà vu of what happened six or seven years ago when first-line medications were so expensive. But they dramatically came down once there was generic competition. So I think once these second-line drugs are more and more used, with more competition from generic brands, the prices will come down more and more. I think the Clinton deal is the first step in that direction.

To what extent is the developing world still in need of first-line medicine?
There's still a great need to get more people to start therapy. There are about 7 million people who need this treatment today, and right now only about 2 million are getting it. So there's still a long way to go.

Are there barriers to achieving that?
Drug prices are the key issue for access to second-line drugs and improved first-line drugs, but a main barrier today to expand access and start more patients on treatment is the dire lack of health staff that we are facing in African countries. It is tragic to see that the nurses and doctors that could treat patients are either themselves dying of AIDS or are recruited away to the U.S. or the U.K.

What are the benefits of the one-a-day drug as opposed to the first-line drugs already out there?
It has a better safety profile: there are less-toxic side effects, particularly over the long term. And that's particularly important in many developing country settings where your possibilities to regularly check blood levels, etc., is much more limited. Ease of treatment is also particularly important in low-resource settings in terms of remembering the drug and not taking the wrong dose. It makes a big difference.

How does the price difference between low- and middle-income countries break down?
The problem really is that the major price reductions are being offered to the least-developed countries but not to the same extent to the middle-income countries. And the prices are still too high for many middle-income countries to afford.

How important is it to have multiple drug producers and generic brands?
Well, it's the rule of the market that once you have several producers, prices come down significantly. So we clearly see that we cannot just rely on some of the price reductions that are offered by some of these companies. We really need the competition to make this affordable and fundable.

Do reduced prices improve the quality of care?
The quality of care is of course the essence of any good program. What we've seen over the past few years is that even patients in the poorest countries [who] can take these HIV medications very exactly can receive the same kind of treatment that we'd see in the U.S.

Are we doing enough to provide these medicines to the world's poor?
We've come quite some way. But the fact that only 2 million out of 7 million who need treatment are getting it just shows us how much further we need to go. And the majority of those figures are in the developing world.