Priced out of reach

The cost of drugs

AIDS medication bottle with padlock cartoon

AIDS medication and treatment is witheld from millions in need.

Access to treatment should be a simple matter of need. Instead, high prices for drugs put them out of reach of poorer countries. This is a major obstacle in the way of the goal of universal access to treatment.

Patents

Patents on medicines effectively give big pharmaceutical companies control over the availability and pricing of essential drugs.

Drug patents are like a contract between the drug company and the government in a country where they want to sell a particular medicine, giving the company full ownership of it for a certain amount of time. This means noone else can make copies of the drug - effectively setting aside the usual market rules of competition.

Trade Rules Suck

Trade rules block access to medicines

Without competition the patent holder can, in effect, charge what they like.

Patents are protected by international trade rules called TRIPS (Trade Related Intellectual Property Rights). These rules reflect the power of the major pharmaceutical companies

Generics

When a patent expires in a country, or when it doesn’t apply there, other companies can start to manufacture and develop copies known as ‘generics’. India, Brazil, China and Thailand are examples of countries with important generics industries.

The first ARV drug - AZT - came on the market in 1987 at $10,000 a year — pricing it far beyond the reach of most people. However, with competition from generic manufacturers, prices dropped fast. Some generic versions are 98% cheaper than their brand name alternatives.

For countries with small health budgets, generics can be their only hope of providing treatment for all. Increased competition from generics is vital if we are to bring prices down and meet the commitment to universal access.

New generics are urgently needed.

New drugs will be needed for patients resistant to older formulations.

Patients everywhere tend to become resistant to a treatment within 4-7 years, and then need to move onto a different treatment program. Current and future patients will require treatment over many years, and will need to move onto newer ‘second-line’ drugs at some stage in their treatment.

Newer drugs which better meet the needs of developing countries are urgently needed

- Drugs such as New Kaletra, which can be taken without food and doesn’t require refrigeration.

Drugs are desperately needed for the millions of children living with HIV/AIDS.

Little resource has been given to developing treatment that is suitable for children - perhaps because a majority of children living with HIV/AIDS are in developing countries - not considered a profitable market for companies who research and develop new treatments.

“I would not be alive today if I could not access second-line medicines. I am in the very lucky minority. Most patients whose lives had been saved by first-line treatment will be abandoned the moment they need second-line drugs unless governments pull their heads out of the sand and start tackling this issue.” Ibrahim Umoru, a peer educator working for MSF in Nigeria.

While older drugs have dropped in price, newer drugs remain priced out of reach.

Over-complicated trade rules, and the actions of pharmaceutical companies are blocking generic production of newer medicines and denying access - at the cost of millions of lives.

While TRIPS was designed to protect patents, it also contains provisions that are supposed to allow countries to access affordable drugs.

Under TRIPS, governments have the right to override patent rules, and allow the production of generic versions of drugs still under patent, with or without the patent holder’s permission (this is known as ‘compulsory licensing’). This right was re-emphasised by the ‘Doha Declaration’, signed by World Trade Organisation (WTO) members in 2001. It was intended to enshrine the principle that protecting public health is more important than protecting patents.

In practice, patents and the profits of pharmaceutical companies still undermine the right of patients to health. Developing countries still face enormous barriers to getting affordable treatment.

  1. They face enormous political pressure NOT to use their rights to put public health first — mostly behind the scenes —- but sometimes publicly, as we saw with the bullying of Thailand illustrates.

  2. Technical and legal capacity. Many countries are too poor and lack the specialist advice needed to use the complex TRIPS rules and resist bullying and misleading information from rich countries and pharmaceutical companies.

The Grim Reaper

Abbott Laboratories: Big pharma blocking access to medicines

  1. An ‘unworkable process’ for the poorest countries. The Doha Declaration limited the availability of generics by insisting that a compulsory licence must be used ‘predominantly for the domestic market’ - limiting the quantities of drugs that could be exported. This meant the agreement was effectively useless for countries that had little or no manufacturing capacity of their own.

A further agreement, reached on August 30 2003, introduced a ‘waiver’ to the requirement that drugs produced must be primarily for the domestic market. This was supposed to allow developing countries which did not have the capacity to manufacture generic copies themselves, to import them from elsewhere.

But this ‘solution’ was heavily influenced by powerful drugs companies and their political allies. As a result it introduced an extraordinarily complicated process — with the effect of burying developing countries in red tape and slowing down even further the urgent process of getting AIDS drugs to the people who need them. It is also likely to squeeze out generic production by making it more costly and time-consuming.

When this is combined with a lack of technical capacity, and political pressure from pharmaceutical companies and rich governments, developing countries don’t stand a chance.

Even if the agreement can be made to work, it’s certainly not providing the easy access to cheap medicines that is desperately needed.


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