“I want someone to explain to me why it isnīt called murder” Stephen Lewis, UN Special Envoy on AIDS in Africa
“This is war - nothing less” Steve Jenning, a drug company lobbyist, about the industryīs attempt to quash a bill on cheap drug imports in the US
Drug donations and price drops
Some brand-name pharmaceutical companies have responded to intense public pressure and made moves towards dropping AIDS drug prices. Others have offered to donate some drugs free of charge.
However, we need to encourage sustainable generic production in order to get access to treatment on the massive scale needed in the developing world. Relying on the goodwill of pharmaceutical companies does not solve the fundamental problem of needing a reliable long-term source of the cheapest possible drugs manufactured on a large enough scale to treat the millions in need.
Protestors targeted Gileadīs corporate stand at the 2004 International AIDS
`Differential pricing’
Some drug companies now offer reduced prices for their drugs in developing countries. However this response is far from the solution needed.
Gilead, who manufacture the key drug Viread, claims to offer its drugs at discounted prices to 97 countries under its Global Access programme. Yet they have been very slow in registering drugs with the national drug regulatory bodies - a necessary step if drugs are to be used. Without registration, the drug cannot be used and the offer of a reduced price is an empty promise.
The South African Court Case
In 1997, the South African government passed a `Medicines Act’, intended to bring down the price of essential medicines and promote national health above patent rights. The Pharmaceutical Manufacturers’ Association and 40 brand companies took the South African government to court to block the Act, saying it broke their patent rights and would harm their profits. They withdrew the case in 2001 after a huge public outcry, but this aggressive action revealed to the world the strength of the pharmaceuticals’ grip on the availability of essential medicines, and their desire to protect their patents at all cost.
Differential pricing is not normally extended to middle-income countries, despite the fact many people in these countries need treatment. 22
While meaningful differential pricing may be part of the solution, it can only be truly effective as part of a functioning market that includes generic competition. Brazil threatened to produce its own generic version of Viread last year — provoking Gilead to drop its price by more than 51%. 23 This drop could not have been negotiated without the threat of generic competition.
Generic drugs are, almost without exception, cheaper than branded alternatives, no matter how low prices are dropped, as costs are lower for generic companies who don’t have to do serious initial research and development on a copied medicine.
Interfering in politics
The numbers: US drug companies in 2004
US drug company sales $219 billion
Research & Development spending $37 billion
Spending on marketing $60 billion
Spending on lobbying the US government $116 million
Data: PhRMA (Pharmaceutical Research and Manufacturers of America), Center for Public Integrity
Drug companies have a massive influence on many governments, especially in the USA.
There, a revolving door of influence exists between government and industry: In 2004 half of the industry lobbyists were former government officials. Several industry executives hold influential government positions. Randall Tobias - former chairman and CEO of Eli Lilly (a US pharmaceutical giant) - was head of Bush’s AIDS programme from 2003-6.
Drug companies invest enormous amounts of money in lobbying the US government, and have given more than $130 million in funding for election campaigns alone in the last 15 years. 24
Dodgy deals: How pharma influenced TRIPS 25
“Our combined strength enabled us to establish a global private sector government network which laid the foundation for what became TRIPS”. Former Pfizer CEO Edmund Pratt. He was head of the US President’s advisory committee on trade negotiations in 1986, then special advisor to the US Trade Representative, responsible for TRIPS
The big pharmaceutical companies have been closely involved in the decisions and processes surrounding the TRIPS negotiations, seeking to ensure the outcome was as protective of their interests as possible, as well as lobbying for it to exist in the first place.
In the two years between the Doha Declaration and the August 2003 decision, they lobbied hard to water down the agreement. During the wranglings, Pfizer - the biggest global pharma company - directly intervened. Its CEO Henry McKinnel met with the WTO’s Director General to discuss the shape of the agreement.
Not surprisingly the final outcome reflected the drug companies’ interests, undermining the aims of putting public health before patent rights.
(22) MSF, February 2006, Briefing Note: Gileadīs Tenofovir access program
(23) CPTech Website (1) and CPTech Website (2)
(25) Corner House, September 2004, Who Owns the Knowledge Economy? Political Organising Behind TRIPS, Action Aid, (2005), Under the influence, Exposing undue corporate influence over policy-making at the World Trade Organisation pp26-29
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