If President Bush wants to stop the AIDS epidemic from laying waste to generations of people in the developing world, he should scrap his proposed $15 billion plan to seed the African continent and the Caribbean with AIDS drugs and spend the money elsewhere. It bolsters the tragic notion, held by activists and the liberal media, that drug prices are the barrier to treating HIV in developing countries, while virtually ignoring the bleak conditions and corruption that are at the heart of efforts to confront the epidemic.
Administration officials maintain that the proposal is based on Uganda’s success in reducing HIV rates from the highest of any African nation — 14 percent in 1993 — to the lowest (5 percent in 2001). But most the progress was made before generic drugs were hailed as the silver bullet by activists and before efforts were made to increase access by attacking prices and patents. Rather, Uganda’s gains are the result of action taken by its president and religious leaders to promote abstinence and sexual fidelity among the young and to insure that its public-health activities were free of corruption. (That Uganda has been spared war is critical too.)
Instead, the Bush plan simply takes a page from the HIV-activist handbook: Focus attention on high drug prices and use generic medicines as a battering ram against patent protection; at the same time, ignore Africa’s own failure to focus time, attention, and money on the horrific public-health situation, which can only be addressed through economic growth and free trade.
Indeed, the Bush plan resembles more a Nigerian program that attempts to solve the HIV problem with cheap drugs. The Nigerian program has failed miserably and has essentially incapacitated the country at a time when its HIV-infection rate is rising faster than ever.
Nigeria — on the advice of activists — spurned the help of pharmaceutical companies and decided it would purchase generic anti-AIDS drugs purchased from Cipla for 15,000 patients. Cipla, an Indian company that has illegally manufactured generic versions of AIDS drugs developed by American companies, offered to reduce the price of the HIV-drug cocktail from $600 per person (the going government rate) to $350, a below-cost price that Cipla extended to a Doctors Without Borders clinical trial of 150 patients. To deal with drug delivery and health infrastructure, the World Bank, the U.S. Agency for International Development, and the Gates Foundation, among others, donated over $150 million.
Two years later, only about 800 people have been treated, and the tons of drugs in the government stockpile will expire in less than six months. Much of the drug supply was stolen and the funds for infrastructure were largely frittered away by incompetence and corruption. Two years later, while everyone was congratulating each other for their victory over the drug companies, the Nigerian Directorate of the National Programme to Fight AIDS concluded that Nigeria’s woeful health infrastructure was the real reason for the failure. Cipla could have given three times the tonnage for free, but it would have been for naught.
The White House, however, didn’t even both to check and see if Cipla offered the best drugs at the lowest prices. They don’t. Many of Cipla’s HIV products have not met World Health Organization quality standards. And in some important cases the brand-name drugs are one-third the price of an Indian generic. Merck sells products it patented cheaper than the cheapest Indian generic. But somehow neither the White House nor the plan’s author, National Institutes of Health HIV expert Anthony Fauci, shopped around.
The administration’s attack on drug prices could also take a toll on the biotech and pharmaceutical industry’s ability to invest in new drugs for global diseases. The administration has stood firm on protecting pharmaceutical patents in World Trade Organization meetings on global health, but now appears to have bought the activist claim that only generic companies can solve the HIV problem. By declaring it will buy its drugs from Cipla, the administration is directly undermining its own efforts to protect pharmaceutical patents from similar piracy.
But prices and patents were never the reason the developing world has failed to contain HIV. The vast majority of HIV drugs have no patents in Africa. In all that time, generic companies never made a move to sell their copies there. And if generic companies were the salvation, India — which has thousands of them — would be HIV free. As it is, their infection rate is climbing faster than that of many other countries, and only one percent of all people infected with the virus are receiving treatment.
Tons of drugs sitting unused in supply depots (before they are stolen and resold). Infrastructure concerns left ignored. New drug investment stagnating because of a desire to look compassionate on a global scale. But at least the White House will have stood up to the evil drug companies. The press clippings will look great. But who will stop the dying?
— Robert Goldberg is a senior fellow at the Manhattan Institute.