Withholding the Cure (AIDS)

by N A Siegal

The Progressive magazine. September 2003



Bill Haddad helped create the U.S. Peace Corps and now works as a volunteer for a generic drug manufacturer, Cipla Ltd., based in India. Haddad's mission is to bring inexpensive medication to dying populations in the Third World. Wherever he goes, he carries an eyedropper filled with a drug called Neverapine, which is known to reduce the risk of transmitting HIV/AIDS from an HIV-positive pregnant woman to her unborn child.

The bottle of Neverapine costs Cipla less than forty cents to produce, Haddad says, and each one contains about 200 doses. The mother is given one drop when she goes into labor, the baby is delivered by Caesarian section, and the newborn is given a single drop within forty-eight hours of birth. Using this method, the risk of infecting the newborn is reduced by 90 percent, says Haddad.

Haddad gives away his eyedroppers to pediatric hospitals at no cost and donates them to physicians in small villages in sub-Saharan Africa where AIDS has so devastated the population that only the very old and the very young survive. Yet many countries, such as Kenya, Ghana, and South Africa, won't let him.

"Because of alleged patent laws or other political barriers, I can't do it in most of the sub-Saharan countries and in half the Latin American countries," he says. "We produce the drugs legally, and the international law says we can do it. The companies have public statements that say, 'We won't prevent you.' But then, some piece of paper arrives and stops you.

The piece of paper is usually a legal notice informing him of an injunction by one of the major brandname pharmaceutical companies in the United States or other countries that develop and patent new medications, Haddad says. The notice usually states that his life-saving efforts violate intellectual property laws.

To Haddad, each one is a death certificate for scores of infants.

"Every trip I'm on, I run into 100 people who die," he says. "I don't have the words to describe what's really happening. It's Dickensian: children who are under five dying without one dose of medications that we could give them for free. You send the drugs for free and they don't get distributed. Frustrating would be the mild word for it."

It wasn't supposed to be this way. Less than two years ago, the nations of the world assembled at the World Trade Organization's 2001 meeting in Doha, Qatar, seemed to agree that treating poor people in the world's indigent nations was a higher priority than maintaining the intellectual property claims of multinational corporations. At Doha that November, 142 nations signed a historic agreement that allowed governments to override international patent protections and produce generic versions of medicines for a small fraction of the price charged by brand-name drug makers.

The pact, known as the Doha Declaration, was good news for the more than thirty million Africans living with HIV and AIDS, and millions more people in developing countries dying of illnesses that are treatable or curable in the West (such as measles, influenza, asthma, various types of cancer, and digestive diseases). But since it was signed, the United States, the European Union, Canada, Japan, and other wealthy countries have attempted to undermine that agreement, say nongovernmental organizations such as Medecins Sans Frontieres (Doctors Without Borders), Oxfam, and Africa Action.

"They're seeking about four types of restrictions," says Asia Russell, who directs international policy at Health GAP, an activist organization founded in 1999 to campaign for increased access to affordable medication in developing countries. These restrictions "would significantly compromise" the ability of poor countries to provide urgent health care to their people, she says.

U.S. trade negotiators have suggested limiting the list of illnesses covered under the Doha pact to AIDS, tuberculosis, malaria, and future equivalent pandemics. The United States and other countries, such as Japan and Switzerland, have also suggested restricting the number of countries that could benefit from the pact by strictly defining what constitutes a poor country. Western nations have also proposed a series of economic "tests" that would determine which countries could legally import or export generics. And finally, pharmaceutical companies and Western countries want to ensure that generic versions of brand-name drugs are not diverted to rich countries, where they could undercut potential profits.

"If you want new medicines, you have to have intellectual property protections," says Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America, the trade group for the leading U.S. drug and biotechnology companies. "Right now, many people believe that Doha has to be applicable to all diseases. If it's all diseases, then you have to limit the countries."

The Pharmaceutical Research and Manufacturers of America, the twenty-fourth most powerful lobbying group in the country, according to Fortune magazine, agrees that the process of getting cheap medications to the world's dying populations has stalled. But Grayson argues that Haddad and nongovernmental organizations (NGOs) are the ones to blame.

Grayson's members don't want companies like Cipla in India and other generic drug makers in Brazil and China to be able to profit by producing cheap versions of drugs that cost U.S. pharmaceutical companies as much as $800 million to develop, he says. Instead of focusing on getting the drugs to the poorest of the poor, he argues, Haddad and the NGOs are trying to give manufacturers of generics the power to expand their reach into the global market.

"People want to use this for industrial policy," Grayson said. "They want to put generic versions of drugs on the market everywhere, including in the United States, and make money that way, rather than providing drugs to the poorest countries."

The pharmaceutical patent debate is expected to be a central issue during the next round of international trade negotiations at the World Trade Organization in Cancun, Mexico, from September 10 to September 14.

"They [the pharmaceuticals] are trying to figure out how to do the absolute minimum you can do to keep to the basic premise of this agreement but not provide the needed medicines," says James Love, director of the Consumer Project on Technology, a nonprofit group based at Ralph Nader's Center for the Study of Responsive Law in Washington, D.C. "It's all about making it hard to do, to make it burdensome-whatever they can do to slow the process."

Access to medicines and other life-saving technologies has become, in the last few years, one of the most explosive issues in the debate over globalization. Before 1994, there were no uniform international trade barriers to manufacturing or distributing generic versions of drugs invented in the West. The World Trade Organization that year created a set of laws governing intellectual property protections, known as the Trade-Related Aspects of Intellectual Property Rights, or TRIPS. It gave twenty-year patent protection for "all inventions, whether of products or processes, in almost all fields of technology"-including medications.

That means that if a U.S. company were to develop a cure for cancer today, for example, a generic version wouldn't be available for twenty years. This provision would allow the company that develops the cure the opportunity to recoup its investment. Anyone who couldn't afford the brand-name medication, priced for maximum profit, would be out of luck.

Under TRIPS, there was relief for developing nations, however: A country could break a patent monopoly if it followed strict guidelines allowing them to issue what's known as a "compulsory license." Article 31 of the agreement listed seven ways a country could grant such a license, one of which was to declare a national public health emergency.

On the African continent, where 2.2 million people died of AIDS in 2001, according to the World Health Organization, it made sense to override patent protections. With such a compulsory license, African nations could get a triple combination "cocktail" from India's Cipla for $300 a year, or from other generic companies in Brazil and Thailand for as little as $250 annually per patient instead of buying the medicine from U.S. drug makers that charge about $12,000 to $15,000 each year per patient.

And yet, in 1997, when South African President Nelson Mandela signed into law a measure to issue a compulsory license for his country. thirty-nine of the world's largest pharmaceutical companies, including Bristol-Myers Squibb, GlaxoSmithKline, and Merck, sought and received an injunction to block it. The same companies later filed lawsuits against the South African government, charging it with patent violations. Their stance created enormous negative publicity, so the companies dropped their suit.

But no country was willing to take the political risk of attempting to issue a compulsory license after South Africa, says Rachel Cohen, U.S. director of the Campaign for Access to Essential Medicines, a project of Doctors Without Borders. "They wanted assurance that they wouldn't face political consequences if they tried to issue a compulsory license," she says. That explains why Haddad has had such a hard time distributing his AIDS medicine.

The South Africa case helped put the conflict over international property law and public health concerns on the front burner for the next round of international trade negotiations that November in Doha.

"It was because of the fallout from that South Africa case that so much momentum was gained to support the victory at Doha," says Health GAP's Russell.

At Doha, trade officials crafted language to clarify TRIPS and to reassert the rights of poor nations to issue compulsory licenses. The text said that TRIPS "can and should be interpreted in a matter of WTO members' rights to protect public health and in particular to ensure access to medicines for all."

"This was a landmark moment," says Cohen. "For the first time in WTO history, all of the participants said public health takes priority over these other commercial interests. This was a huge, huge victory for developing countries."

Yet many issues were still unresolved as the trade negotiators departed Qatar. For one thing, it was unclear how countries would be able to make effective use of compulsory licenses if they didn't have the infrastructure or resources to manufacture generics at home. Nor was it clear whether they could import them.

Paragraph six of the Doha Declaration instructed participating countries to "find an expeditious solution to the problem and report to the General Council before the end of 2002." For the last twenty months, trade negotiators have been trying to do just that, even as they missed the 2002 year-end deadline.

In the meantime, the United States announced an interim moratorium plan, pledging not to challenge any WTO members that broke trade rules to export drugs to a country in need.

Robert Zoellick, the U.S. trade representative, and the U.S. pharmaceutical giants said they wanted to make it possible for India, Brazil, and other countries with some manufacturing capacity to export, as long as there were limits set. Zoellick proposed a "disease list" to define the types of medications that could be included in compulsory licenses.

To activist groups, the list was laughable. At first, it included only AIDS, tuberculosis, and malaria. Then, the U.S. added nineteen other illnesses-all of them possible "pandemics." A report prepared by Dr. Mary Moran of Doctors Without Borders found that the listed illnesses didn't even "correlate with the major causes of morbidity and mortality in Africa." Of the twenty-two on the list, nine were diseases for which there was no existing treatment-thus, there was no patent the countries could override.

Also, the "approved list" was restricted to infectious diseases such as yellow fever and dengue fever, cholera, hepatitis, and the plague. Cardiovascular diseases were excluded although, according to the World Health Organization, they are the second biggest cause of death on the African continent, taking about 985,000 lives a year. Some 544,000 Africans die of various forms of cancer, and another 336,000 fall to respiratory diseases, including pneumonia-neither of which was covered. Also not included were digestive diseases and diabetes, which are treatable with prescription medications but which cause some 434,000 deaths in Africa annually.

Mouanodji Mbaissouroum, a cardiologist in the central hospital at N'Djamena, Chad, told The Wall Street Journal that he writes many prescriptions for medicines to relieve hypertension that he knows will never be filled, either because the medicine isn't sold in Chad or because it is priced way beyond his patients' means.

"People in the developed world think AIDS and malaria and communicable diseases are the biggest problems in Africa," Dr. Mbaissouroum told the Journal. "But we also suffer the same illnesses as rich people do."

James Love, of the Consumer Project on Technology, says U.S. negotiators may be backing off from attempts to limit the list of diseases and are now looking to keep a lid on the number of countries that could import drugs to only the most indigent. Those excluded could be developing nations such as the Philippines and Malaysia, because they aren't considered so poor that they would need such broad protections.

On the pharmaceutical side, the argument is about property rights: Limiting the scope of the international agreement to safeguard inventions is essential to keeping pharmaceutical companies in business and to ensuring future research and development for new life-saving drugs and medical technologies, the drug companies say.

"The profit is what has ended up giving us these medicines we have now," says Grayson. "Without profit, you won't have investment."

Grayson estimates that U.S. drug companies put about 20 percent of their revenues into research and development. Currently, he says, U.S. drug companies invest about $800 million developing a single medication. In 2002, he says, they spent an estimated $32 billion to discover and produce new medicines.

The pharmaceuticals industry was the most profitable sector of the economy last year, according to the 2003 Fortune 500 list of the world's top companies. Pfizer alone made $9.13 billion in profits, and Merck made $7.15 billion.

"The pharmaceutical industry is, fairly stated, a profit-making group- and that doesn't mean price-gouging or 'I don't care about the Third World,' " says Neil Sweig, a financial analyst who tracks pharmaceutical companies for Fulcrum Global Partners in New York. "If prices plunge or if prices are too low or if drugs are given away at no charge, it represents a very serious problem in the ability of global brand-name companies to go forward with research and development that runs into the billions for the companies.

In 2003 alone, the World Health Organization predicts that there will be some ten million deaths in developing countries from malaria, tuberculosis, acute respiratory infections, and diarrhoeal diseases. There are safe, effective drugs to treat these diseases-for people who can afford them. (While the United States says it has agreed that malaria and tuberculosis should be covered by the Doha accord, nothing formal has been agreed to yet.) Millions more poor people are dying of treatable cancers, diabetes, digestive diseases, and sleeping sicknesses. These people could be served by the science and technologies that are now prolonging lives in the West.

Bill Haddad has been involved in this, the other drug war, for many years. A former investigative journalist for the New York Herald Tribune, he exposed a tetracycline cartel that prevented the drug from being distributed in Latin America and became so interested in the subject that he quit journalism to work as a generics' advocate. He became chairman and CEO of the Generic Pharmaceutical Industry Association, and in 1994 created his own company, the United States Research and Development Corporation. In 1999, he founded Biogenerics, Inc., which produced generics, and a year later he went to work for Cipla as a volunteer to reduce the price of AIDS medications in Africa.

In April, he attended the European Commission conference in Brussels and gave a presentation in which he listed the casualties: 8,500 people are dying every day in Africa of AIDS, and many more infected children are being born who, without Neverapine, will die the same way.

"I can't go to some of these places anymore, the places people want you to see with your own eyes. It's horrendous," says Haddad. "Patents need to be protected, but they're so exaggerated in what prices they need. They continue to raise the prices because they have no conscience. It looks like a snowball's chance in hell that these powerful forces will back down and let anything happen."


N. A. Siegal is a New York-based reporter who has contributed to The Progressive since 1997.

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