AEGiS-WSJ: Health Drug Makers Are Prodded On Cut-Rate AIDS Medicines

Health Drug Makers Are Prodded On Cut-Rate AIDS Medicines

Wall Street Journal - February 16, 2001
Rachel Zimmerman, Staff Reporter

The head of the United Nations AIDS program called on the global pharmaceutical industry to step up efforts to provide cut-rate AIDS medicines to developing nations ravaged by the epidemic.

Peter Piot, executive director of UNAIDS, in a statement issued from the organization's headquarters in Geneva, urged the crafting of a "new deal" between drug companies and society that would speed up the distribution and availability of affordable medicines to treat HIV, the virus that causes AIDS, in poor countries.

Companies Weigh Offer of Royalties for AIDS Drugs Aimed at Africa Dr. Piot's call comes amid growing frustration that big makers of potentially life-saving medicines aren't doing enough to halt the spread of AIDS in Africa and amid mounting pressure to take more effective action. It has been nine months since five major drug companies announced a pact to provide lower-price drugs in poor nations, but so far, deals in only three countries have been negotiated.

The lack of progress was underscored last week when Cipla Ltd., a generic drug maker in Bombay, India, said it would sell a combination of three AIDS drugs for $600 a patient a year to governments and for $350 to the international nonprofit Doctors Without Borders.

A spokesman for UNAIDS, said negotiations with the five drug makers have been slow in part because of the companies' unwillingness to publicly state the price cuts they are offering for their AIDS remedies. Without this information, he said, neither his organization nor the affected countries can bargain effectively.

The firms in the original pact are Merck & Co., Bristol-Myers Squibb Co., GlaxoSmithKline PLC; Boehringer Ingelheim GmbH and Roche Holding AG. People close to the country negotiations said that while Merck has refused to disclose its prices, it is understood that it has offered to sell one of its drugs, Stocrin, also known as effavirenz, for about $1,069 a year and its protease drug, Crixivan, for about $1,003 a year. While those prices represent an 80% discount off the prices in the U.S., they are still way too high for most Africans to pay. Merck declined to comment on specific prices.

Indeed, even in the three countries where agreements have been reached, only a small fraction of patients are likely to benefit. For instance, UNAIDS said that over the next five years, the program would extend AIDS drugs to about 900 people in Senegal, where 79,000 people have HIV.

Dr. Piot said new sources of financing are needed to help pay for the treatments. New policies are needed to encourage competition that would drive down prices, allow regional purchasing schemes and promote licensing pacts between makers of patented drugs and generics that would enable production of cheaper versions of the medicines. In countries where trade agreements allow and where the AIDS epidemic constitutes a national emergency, Dr. Piot said, such licensing arrangements should be compulsory.

While Dr. Piot's statement doesn't necessarily mean the drug makers' deal is unraveling, many agree that it could be in jeopardy without faster, more substantive progress. For the most part, the drug companies agree.

A Merck spokesman said: "There's an urgent need to speed and expand access and we're working with UNAIDS and other partners to make that happen." A spokesman for GlaxoSmithKline, says that UNAIDS is "absolutely right to call on everyone to make a greater effort." But he said responsibility to solve the problem doesn't rest with industry alone. And deep disagreements over allowing generic competition and brokering compulsory licensing agreements remain.

Write to Rachel Zimmerman at rachel.zimmerman@wsj.com

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