Inter Press Service - October 27, 1999
Johanna Son

This, they say, is why governments and activists in developing countries must step up the pressure for big pharmaceutical firms to lower the cost of HIV/AIDS medicines now out of reach for most patients.

Meantime, they should make it clear at the Nov 30-Dec 3 meeting of trade ministers of the World Trade Organisation (WTO) in the United States that they want to -- and will -- use its legal provisions as a way of providing affordable drugs even under new, stricter rules of trade.

Ninety-five percent of people with HIV in the world live in developing countries, which also see almost all of deaths from AIDS. But they have the poorest access to drugs that are developed in the industrialised world.

As Samoan health minister Misa Telefoni Retzclaff said at the International Congress on AIDS in Asia and the Pacific here, officials from developing countries read about scientific advances in media "but it's frustrating because ministers know people can't afford it".

But Marina Mahathir, chair of the AIDS Congress and the Malaysian AIDS Council, said at its close Wednesday that Asian governments did not seem to pay enough attention to the need to assert their right to use trade laws to correct "the lack of justice and equality" in drug treatment.

The lack of government officials in discussions on the subject may mean that by default, developing countries are giving the "advantage" to those with more clout in international trade, she warned.

So far, developing countries have been finding ways -- like importing raw materials and then having the medicines made locally -- of making HIV/AIDS drugs accessible to those who need it. These ways remain legal under the new Trade-Related Aspects of Intellectual Property Agreement (TRIPS) forged under WTO.

But critics say the U.S. government, for instance, has been threatening trade retaliation to discourage countries from using price-control options such as "compulsory licensing" and "parallel importing".

K Balasubramaniam, of Consumers International, says now is the time for countries to enact laws that will allow them to exercise their right to both options in the interest of public health.

Under compulsory licensing, the government can grant a license to someone else other than the patent holder, with royalty or fee to it. Parallel importing allows governments to purchase drs in markets where they are cheaper instead of at prices set by the original producers.

The US balked at governments at South Africa's 1997 Medicines Act, which allows both practices but which Washington says constitutes barriers to trade and would weaken intellectual property protection which WTO and TRIPS seek to ensure. After lobbying by South African activists, Vice President Al Gore in June said Washington did not oppose compulsory licensing or parallel importing as long as they were used in a way "consistent" to TRIPS.

Thailand, whose practises are likewise frowned upon by the US, has managed to provide cheaper HIV/AIDS drugs by negotiating with local drug manufacturers to produce these drugs, resulting in prices up to 60 percent cheaper than those made by multinational drug firms.

In the case of AZT, the only HIV/AIDS-related drug not covered by patents, Thailand imports raw materials for it to manufacture at home. It has some 800,000 people with HIV.

But Paul Toh, with the Joint UN Programme on AIDS in Bangkok, says this could change after January 2000 -- the deadline for Thailand to puts it patent laws in line with TRIPS and respect 20- year patents. (The deadline for Thailand and most countries is next year, but for other WTO members the date is further on.) A full course of AZT costs 1,000 U.S. dollars in rich countries, but Thailand's short-course AZT treatment costs from 50- 60 dollars.

Indeed, Julian Bilous, head of disease prevention and control at the World Health Organisation Western Pacific office, said: "International trade regulations can increase access to patented drugs through the granting of compulsory licenses."

Joe Thomas, an Australian-based medical doctor, called for "responsible drug trade" where public health is not sacrificed to the drug firms' quest for profit and governments do not use trade rules to boost such. He warned against having "treatment priorities (in HIV/AIDS) being set by the (drug) industry".

Drug firms fear that compulsory licensing would hurt research and development efforts crucial to medical breakthroughs in HIV/AIDS. Some experts say the cost of drug development can reach 500 million U.S. dollars per drug.

Campaigners for access to HIV/AIDS drugs say the competition produced by compulsory licensing would push prices down.

A brief by the International Council of AIDS Service Organisations (ICASO) says the effect would likely be similar to what is seen in India, which produces drugs for local use without paying exorbitant license fees. India faces the prospect of higher drug prices under TRIPS as well, however.

In India, AZT treatment costs 48 U.S. dollars per month compared to 239 dollars in the US, according to ICASO.

But despite US attempts to use trade weapons like the Super 301 clause, developing countries have other tools at their disposal, Balasubramaniam says. These include a key WHO statement this year that it will help interested nations draft laws on compulsory licensing and parallel pricing to "safeguard access to essential drugs".

"It (compulsory licensing) has been accepted, so the next step is for countries to write down their regulations," stressed Balasubramaniam.

Debate on compulsory licensing was raised by Malaysian Prime Minister Mahathir Mohamad at the start of the AIDS Congress. He hit out at the North-South gap in access to HIV/AIDS drugs, saying some governments had sided with big drug firms to protect huge profits to the detriment of public health.

"Compulsory licensing is allowed under WTO, but it is sad to see certain powerful countries aligning themselves with giant pharmaceutical companies to deny developing countries the right to produce cheaper drugs to save the lives of their people," Mahathir had said.

"We have some way to go on this (compulsory licensing)," conceded WHO's Bilous. "There is no clear and simple answer to this.No one wants to have to compel a drug company," he said, adding that perhaps "there can be a voluntary agreement with them (on reducing prices)." ICASO says the drug firm Glaxo Wellcome in 1997 halved the cost of an annual course of AZT.

Bilous says other options inude allowing groups like UNICEF to purchase HIV/AIDS drugs at a cheaper price.

Kul Gautam, East Asia and Pacific director for UNICEF, argues that it is in the drug firms' "enlightened self interest" to produce HIV/AIDS drugs in poor nations, where demand is highest.

Drugs to curb mother-to-child transmission, of dire need in poor countries but not as much in richer states, are an example of what is in the drug firms' interest to produce affordably.

Still, some experts say that too much emphasis can be put on medicine prices - when equally important is the ability of developing countries' health systems to ensure correct delivery, distribution and use of these drugs.

"We shouldn't be mesmerised by the cost," Bilous said. "There is the need to develop the health systems to deliver (the drugs) as well as the money to buy them".

Beyond that, Gautam said, "the bigger hope is not only in reducing prices of drugs, but coming up with new, affordable ones." (END/IPS/ap-he-hd/js/99)
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