The Wall Street Journal - February 22, 2001
Alix M. Freedman, Rachel Zimmerman and Daniel Pearl, Staff Reporters of The Wall Street Journal

An offer to sell AIDS drugs at an extreme discount in Africa has yet to find a major buyer, largely because international relief agencies are still wrestling over how to provide the life-saving medicines on a vast scale.

Two weeks ago, Cipla Ltd. of Bombay, India, jolted the drug industry and the public-health community with its surprise offer to sell a combination of three AIDS drugs at the much-reduced price of $600 per patient per year to governments that want to buy the therapy. Cipla said it would lower the annual price even more -- to $350 a patient -- to Doctors Without Borders, an international nonprofit organization that provides medical services in the developing world.

Both prices are much lower than the typical annual cost of about $10,000 for the AIDS-drug cocktails in the U.S. and Europe, and also less than a discounted price that big drug makers began offering in Africa last year. But Cipla has yet to receive any orders. "We thought, in our naivete, we'd have people calling us and saying 'fantastic,' " says Amar Lulla, Cipla's joint managing director. "It was stupid naivete."

Indeed, as the initial euphoria over the offer has died down, the potential buyers of Cipla's drugs say they are deeply frustrated by the complexity of buying and distributing the medicines where they are desperately needed.

For instance, there is uncertainty over the role Doctors Without Borders will play. In an interview this week, Bernard Pecoul, a top official at the group, stressed that it has no intention of becoming a global distributor of AIDS drugs; it plans to place a limited order with Cipla (as well as with other drug firms) for its pilot programs involving no more than 6,000 AIDS patients in 20 countries.

"It is not at all part of our mandate to cover the world and be in charge of distributing AIDS drugs -- that's much more the mandate of U.N. agencies," said Dr. Pecoul, who directs the group's campaign to increase access to essential medicines, such as lower-cost antibiotics.

Mark Stirling, an adviser on AIDS issues in New York for Unicef, met with Doctors Without Borders on Wednesday to talk about the possibility of distributing drugs from Unicef's central warehouse in Copenhagen. But Mr. Stirling cautioned that Unicef will need, among other things, to get "stronger commitments" from developing nations that AIDS is a top priority. "There is still great reluctance from countries to address this," he said, noting that his agency would need a sharp increase in funding to buy and distribute the drugs, even at the price offered by Cipla.

Officials at other U.N. agencies also are proceeding cautiously, saying they need more information about the viability of Cipla's proposal. Their questions include whether Cipla will maintain the price and availability of its product, as well as the patent implications of using a generic drug in various African countries.

A further difficulty is that Cipla has indicated it is prepared to offer its government price of $600 only to those countries that have "the backing of Doctors Without Borders." But the doctors' group says this approach is impractical; it wants Cipla to make its "humanitarian" price of $350 directly available to governments in the developing world.

"We aren't looking for a humanitarian price, but a global price for governments," Dr. Pecoul said. He said that his "target price" for AIDS drugs is even lower than what Cipla has proposed. At $200 per patient per year, he believes the drug combinations become affordable for a significant number of people in poor nations.

Even at $350, it isn't clear whether governments will embrace the Cipla offer. For instance, in India, where some 3.7 million people are infected with HIV, Prasada Rao, head of the National AIDS Control Organization, said that it is unlikely his government could even afford a $350-a-year price.

Despite widespread agreement that subsidies for AIDS drugs need to come from rich countries and philanthropic foundations, interest remains negligible. The World Bank is now weighing whether to make loans available to countries to buy AIDS drugs. But Debrework Zewdie, the bank's top AIDS official, said that loans alone aren't the answer. A key part of the solution: "Rich countries need to get involved," she said.

Still, according to the World Health Organization, AIDS drugs are unlikely to win funding subsidies from foundations and wealthy nations until prices fall even further. Five large drug makers in May 2000 pledged to cut the price of AIDS drugs in poor nations. But so far, only a tiny fraction of people infected with HIV in Senegal, Rwanda and Uganda have benefited from this effort, largely because the African nations say they don't have the money to buy drugs even at reduced prices.

Now, in the wake of the Cipla offer, the pharmaceutical giants are under even more intense pressure to cut costs and waive patent restrictions that block their generic rivals -- and they too, have begun clamoring for a coordinated political response. "Massive increases in donor funding are the missing element when it comes to having a significant impact on this pandemic," said Robert Laverty, a spokesman for AIDS-drug maker Bristol-Myers Squibb Co.

Write to Alix M. Freedman at alix.freedman@wsj.com, Rachel Zimmerman at rachel.zimmerman@wsj.com and Daniel Pearl at danny.pearl@wsj.com

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