The patents and priorities of the western drugs industry are stacked against the sick of the developing world. But philanthropy, the impact of Aids, and new faces in global institutions have reinvigorated the battle against poor people's diseases.by Shereen El Feki / November 20, 2000 / Leave a comment
In the oasis villages around Ouarzazate, beneath Morocco’s Atlas mountains, globalisation is bearing strange fruit. The kasbahs bristle with satellite dishes; caf?s offer mint tea and “il internet”; and the call to prayer is accompanied by the ringing of mobile phones.
But some western exports remain out of reach. Azithromycin is a powerful antibiotic which stamps out all sorts of bacteria, including the one which causes blinding trachoma. This is a problem for 1.5m Moroccans living in the region, where the disease is often carried by flies which flit about infected eyes. While good hygiene and surgery go some way to mitigating the disease, drugs are crucial to tackling it.
The country’s health ministry has tried mass treatment with an old-fashioned medicine called tetracycline, which requires six weeks of twice-daily dosing, a regimen which few patients will follow. By contrast, a single dose of the newer drug azithromycin keeps patients clear of the bacteria for a year. But azithromycin is expensive, and the government cannot afford to treat more than a small fraction of patients. Last year, however, the drug’s biggest manufacturer and patent-holder, the US pharmaceutical firm Pfizer, donated $18m worth of azithromycin to Morocco through a new foundation, the International Trachoma Initiative (ITI). Now, 600,000 people have been treated, and the Moroccan government is bullish about eliminating the disease in a few years.
ITI has launched similar donation programmes in Vietnam, Mali, and Tanzania, and plans to expand into Sudan. There is no shortage of takers: 150m people in the world are developing trachoma, five times more than the number infected with HIV. But this largesse is not universally admired. The aid agency M?decins Sans Fronti?res (MSF), questions the sustainability of these gifts. MSF reckons that companies are more interested in publicity than philanthropy, and impose such conditions on donations as to severely limit their scope. MSF would much rather see drugs such as azithromycin bought from cheaper manufacturers-if only international patent law and national healthcare budgets allowed.
The drug gap
It takes only a glance at the empty shelves of a rural dispensary in, say, Kenya or Vietnam to appreciate the extent of the international drug divide. The World Health Organisation (WHO) reckons that there are over 300 essential drugs which should be made available in all countries. One third of the world’s population has no access to them. Powerful drugs for malaria and other infectious diseases are easier to find in London for the occasional stricken traveller than in poor countries where they are killing millions (see charts on this page).
Cost is part of the problem. As industry executives rightly point out, drug-making is a business, not a charity-the primary commitment of the drug companies is to their shareholders. It now costs up to $500m to take a drug from a gleam in a scientist’s eye, through laboratory testing and clinical trials, to a product in the clinic. The ingenuity of drug-makers is rewarded with patents, which give them a monopoly to sell the drug in the countries which recognise their intellectual property rights, and the power to set a price which they reckon will guarantee a hefty return on their investment. (At least a fifth of sales revenue will be ploughed back into research.)
Unlike drug-making, price-setting is more art than science. Companies will charge different prices for drugs across industrial countries, dependent largely on what the market will bear. But even the lowest prices are still beyond the reach of most poor countries. Morocco, for example, spends roughly $160 a year on healthcare for each citizen; just enough to buy 25 tablets of azithromycin at US wholesale prices.
But price is not the only barrier. Even cheap drugs which have long gone off patent, and whose price has fallen to pennies a dose do not always make their way to the people who need them most; nor are they always used effectively when they do get there, thanks to problems in the recipient countries themselves. It’s hard to get value for money in drug procurement when the ministry for health is taking backhanders from suppliers. Distributing drugs to rural clinics is difficult where there are no roads or when war intervenes. Vaccines go off quickly where there is no electricity for refrigerators. Finding trained personnel to teach communities how to avoid disease, or to treat them when they have failed, is difficult when the government would rather build a new factory for export goods than pay their salaries. Patients are less inclined to stick to treatment when they have to choose between the clinic or finding food for their family. The WHO reckons that any country which spends less than $60 a head on healthcare a year is simply too ramshackle to tackle its medical problems. For a fifth of the world’s countries, this means a poor prognosis indeed.
Relaxing patents for the poor
This grim situation is not new. For years, aid agencies have fretted about malaria devastating sub-Saharan Africa, about tuberculosis galloping through eastern Europe, and warned that inadequate access to essential drugs was killing millions. Few in the western world, however, took much interest.
Aids has helped to change that. With 34m people infected with HIV and more than 2m dying of it last year, it might seem hard to overlook such an epidemic. Actually, the world is full of diseases that take an equal toll (see chart next page). What makes Aids different is that it is not just tucked away in some foreign field, but established in the industrial world, too. In this way, Aids is an echo of the past, when diseases such as cholera routinely went global.
Since the mid-1990s, triple drug therapy (with compounds called protease inhibitors and reverse transcriptase inhibitors) has proved largely successful at keeping HIV in check. Other drugs, such as fluconazole, have proved effective against the micro-organisms which accompany HIV and cause “opportunistic” infections which are the syndrome’s coup de gr?ce. These drug regimens are neither cheap nor easy to administer. Fluconazole costs $10 a tablet in the US; triple drug therapy (which involves daily dosing with a variety of pills and some rather unpleasant side-effects) is like taking out a long-term mortgage with annual payments of $15,000.
Given that 95 per cent of people now carrying HIV live in poor countries, these life-
saving drugs are prohibitively expensive. But they are much cheaper in some parts of the developing world than in others. In Thailand, for example, fluconazole sells for roughly 30 cents a tablet compared with several dollars a dose in Kenya. This is because Thailand has its own generic drug industry producing copies of the original pharmaceutical, developed and patented by Pfizer.
In most of the industrial world, generic drug companies must wait at least 20 years until the expiry of a patent before they can start to make their own cheap versions. Such restrictions are enshrined in an international agreement known as Trips, or Trade-Related Aspects of Intellectual Property Rights, which sits alongside the WTO’s regulations governing the flow of goods between countries. Trips lays down minimum standards for the enforcement of intellectual property including copyright, trademarks and-critically for the drugs industry-patents. Most nations had until this year to implement Trips; the poorest have been given until 2006.
Last year Thailand introduced laws recognising patents on drugs. While this means that it cannot copy new drugs launched after the law came into effect, some of the most useful medicines against HIV and associated infections are still available, because they predate the new legislation. A similar situation exists in Brazil, where a thriving generics industry is turning out enough cheap drugs to tackle HIV for the government to distribute them free of charge to 80,000 of the country’s 600,000 HIV-infected patients. And while India is not yet overwhelmed by HIV, it is overflowing with drug companies producing the goods at a fraction of the price charged by western drug firms.
This is not, however, the case in South Africa, where strict patent laws mean that some anti-HIV drugs cost only marginally less on the open market than in western countries. One solution, touted by MSF and others, is to allow South Africa to import cheaper versions from Thailand or India; alternatively, South Africa could try to make them on its own. To do so, it could apply for special dispensation from the patent-holder. But research-based drug companies do not like to give their generic competition a look-in, even in the poorest of markets: Bristol-Myers Squibb, for example, has long wrangled with Thailand over its production of the US company’s anti-retroviral drugs.
One alternative is “compulsory licensing,” where South Africa goes ahead without the patent-holder’s consent. Under Trips, countries may do this “in the case of a national emergency or other circumstances of extreme urgency.” It’s hard to argue that Aids-projected to reduce life expectancy by 20 years by 2010-does not constitute a crisis for South Africa. But a proposed South African law to allow just this has been challenged by western drug companies, and last year the US Trade Representative’s Office put South Africa on its “watch list” of countries where intellectual property rights are in doubt.
Since then, protests by western Aids activists have had a significant impact-first at last year’s WTO meeting in Seattle, then at this year’s international Aids conference in Durban. Al Gore has given up his support of the drug companies’ stance and earlier this year, the Clinton administration scaled back US government objections to South Africa’s law and pledged millions to tackle Aids, malaria and tuberculosis on the continent. Activist pressure on Pfizer helped push the company into promising to donate fluconazole to needy South Africans, albeit with strings attached as to who may receive the drug and for how long it will be delivered. MSF has challenged such conditions and turned to alternative suppliers, risking Pfizer’s wrath.
Activist pressure has, so far, been less successful with the South African government itself. Despite the fact that one in every five South African adults is infected with HIV, large parts of the government Aids budget have gone unspent. The last health minister frittered away millions on a travelling Aids musical, and championed a worthless homegrown remedy. Her successor has rejected two key anti-retroviral drugs, AZT and nevirapine, as unsafe, despite the protests of South African doctors. And President Mbeki still questions the link between HIV and Aids. In the worldwide effort to make drugs more accessible to the poor, it is easy enough to blame wealthy western donors for not giving enough money, or drug companies for not giving away their wares. But the recipients must act responsibly too, and do more than stretch out their hands.
Elsewhere, progress is being made on the thorny issue of “equity” pricing-charging different prices for drugs in different markets depending on ability to pay. For years, drug companies resisted calls for such equity pricing, invoking largely imaginary fears of widespread “parallel trading” where drugs sold at a low price in far-flung poor countries would flood back to rich countries, thereby undermining company sales in their most lucrative markets and, by extension, their ability to reinvest in research and development. Companies also fear a political backlash in the rich world, particularly in the US, if drugs are sold to the poor of Cameroon for a fraction of what the the poor of Colorado have to pay.
Nevertheless, drug companies are now proving more flexible in their pricing policies, at least when it comes to some vaccines and drugs for HIV. Earlier this year, five leading drug companies agreed to cut the price of their anti-retroviral drugs by 85 per cent-still too expensive for many developing countries, but a welcome start.
Previous global campaigns, for childhood vaccination or smallpox eradication, were largely public sector affairs, spearheaded by the WHO or Unicef. Today, however, there are dozens of initiatives involving a mix of participants from private industry and the public sector. Some are centred around individual drugs, such as Merck’s longstanding and successful donation of ivermectin to eliminate river blindness; others are new and ambitious efforts to launch assaults on certain diseases, such as the “rollback malaria” and “stop TB” programmes.
On the whole, there is a welcome air of pragmatism in the face of the daunting disease problem. Progress is partly due to new faces. Under director-general Gro Harlem Brundtland, the WHO is taking a lead in global health issues from tuberculosis to tobacco. James Wolfensohn, head of the World Bank, has spearheaded the institution’s new and often controversial focus on health. Bill Gates’s foundation has pledged more than $1 billion in the past three years to a variety of medical projects, such as the Global Alliance for Vaccines and Immunisation, which aims to make costly vaccines against such childhood killers as hepatitis B and haemophilus influenzae more accessible in poor countries.
There is also a new emphasis on the economic consequences of disease. The G7 and other aid donors now acknowledge that money spent on health is a direct means to poverty reduction in the developing world. A group of countries has recently committed $1 billion for fighting communicable disease (half for Aids) through the World Bank’s concessional loan facility, and the EU is considering a major effort, with money and manpower, to promote drug availability in poor countries.
Manufacturing drugs for the poor
If these global initiatives demonstrate that it is possible to create a market-donor-financed or otherwise-for existing medicines, it may help to push drug companies to the final frontier: making new drugs specifically for poor countries. Big drug companies largely cater to their paying public in the US and Europe, which account for two-thirds of the world’s $340 billion prescription pharmaceutical market. The most profitable illnesses are the chronic, long-term ailments of the rich world. The drug companies’ labs are busy with medicines for hypertension and arthritis, not schistosomiasis and other parasitic diseases. Only 1 per cent of the 1,223 new compounds launched on the market between 1975 and 1997 were intended for tropical diseases.
Most poor countries are in no position to develop their own production infrastructure for drugs-even generic ones. But there is now a handful of initiatives to promote drug development for them. The Medicines for Malaria Venture is developing new drugs to replace old favourites, such as chloroquine, which have lost their punch; the International Aids Vaccine Initiative aims to deliver on its name; the Global Alliance for TB Drug Development, just launched, hopes to come up with better medicines for poor countries than the inexpensive but impractical antibiotics that are currently available.
All these programmes feature a mix of academic institutions (often in poor countries themselves) and small, hungry biotech companies, which do much of the basic research in the hope that larger drug companies will do the clinical trials and manufacturing. All sorts of carrots are being considered by governments and the international institutions to entice commercial partners: write-offs on research and development; tax credits for investors; patent extensions on blockbuster drugs in rich markets in exchange for patent exemptions in poor ones. Pulling poor populations out of the mire of infectious disease is not just a nice idea: it is ultimately a good business strategy. After all, countries on the road to prosperity are heading towards lucrative western maladies as well.