AFRICA: CHEAPER AIDS DRUGS OR COMMERCIAL LOANS TO BUY TNC DRUGS?
The US based Export-Import Bank recently announced an initiative to provide financing for the purchase of AIDS drugs by some sub-Saharan countries that have been ravaged by the AIDS virus. However, serious doubts have been raised as to how these commercial-rate loans would allow for the delivery of cheaper drugs.
by Gumisai Mutume
Washington, 19 Jul 2000 (IPS) -- The US Export-Import Bank has announced a one-billion-dollar programme to finance the purchase of AIDS drugs for a number of sub-Saharan nations ravaged by the HIV virus.
Under the programme, major US drug companies will offer their products at a discount and the Export-Import Bank will finance their export with five-year loans in a bid to reduce the price of AIDS drugs in Sub-Saharan Africa.
The move, announced in Washington Wednesday comes on the heels of an announcement by African nations at the just ended World AIDS Conference in Durban, South Africa, that they would explore cheaper ways of acquiring AIDS cocktails, such as resorting to importing generic drugs from other developing countries.
The US Export-Import Bank initiative will not help the African countries in their plans to acquire cheaper drugs by importing generic drugs. The Banks authority is limited to extending loans for the purchase of US products which include most leading HIV and AIDS-related drugs, says Export-Import Bank chairman James Harmon.
The programme will be available to 24 sub-Saharan African nations, Benin, Botswana, Burkina Faso, Cameroon, Cape Verde Island, Cote DIvoire, Gabon, the Gambia, Ghana, Kenya, Lesotho, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Senegal, Seychelles, South Africa, Swaziland, Tanzania, Uganda and Zimbabwe.
However, there are doubts about how the Banks commercial-rate loans will allow for delivery of cheaper drugs.
In a few weeks time, five pharmaceutical companies involved in the scheme will embark on a country-by-country assessment to determine the depth of discounts they can offer. They are Merck & Co., Glaxo Wellcome, Boehringer Ingelheim, Bristol-Myers Squibb and F. Hoffman-La Roche.
In May, the companies agreed to slash the price of their drugs to below market prices for sub-Saharan Africa.
A years supply of the three anti-AIDS cocktail drugs costs up to $12,000 a year per patient. The Export-Import Bank loans are expected to be given at commercial rates which average seven percent in the United States, a figure many of the highly indebted poor countries in Africa may not find appealing.
Even with discounts of up to 90%, the drugs would still cost about $2,000 a year, which is way above the average per capita incomes of $500 in many of the worst affected countries.
Last year, world pharmaceutical sales were estimated at $200 billion.
While commending the Export-Import Banks efforts, the Ugandan ambassador to the United States, Koby Koomson said the pharmaceutical companies still need to look at ways to make these products more affordable to the people of Africa.
He said that developed countries need to devote more financial resources to Africa. He also called for partnerships with African countries aimed at total patient care and educational programmes to help prevent the spread of the disease.
There is an ongoing debate on how best to approach the treatment of HIV/AIDS in developing countries, especially in sub-Saharan Africa where some 24 million people are said to be infected. After the Durban AIDS conference, a number of sub-Saharan African countries announced they would explore the possibility of using cheaper generic drugs, which according to Medicins San Frontier (MSF), could lower treatment to $200 per person a year.
Brazil and Thailand have been successful in this regard. In Brazil, a staggering 80,000 people were treated through the use of affordable generic drugs that brought triple-drug therapy down to a cost of approximately $1,000 a year. In Uganda, however, where the government was working with brand-name drugs in a UNAIDS initiative, less than 1,000 people were treated over the same period.
US pharmaceutical companies have strongly resisted any moves by African governments to lower the price of AIDS drugs. At one stage the US based Pharmaceutical Research and Manufacturers Association threatened to pull South Africa through the courts if it legislated compulsory licensing.
Compulsory licensing refers to an order by a court or government body that allows any person or government to use a patent legally without permission from the patent holder in the public interest.
But as the epidemic rages, 95% of the 34.3 million people worldwide with HIV/AIDS remain without access to treatment and the spread of the epidemic has been exacerbated by this lack of access to medicines.
Many factors contribute to the problem of limited access to essential medicines: the emerging global trade system, which sets the rules for how products are sold within and between countries, is one. This system treats medicines like other non-essential products, notes the medical humanitarian organisation, MSF.
One-third of the worlds population lacks access to essential medicines. In the most impoverished parts of Africa and Asia that number is more than 50 percent.
In one of the most affected countries, South Africa, there are more than 3.5 million people out of 43 million infected with HIV. The Treatment Action Campaign which has been lobbying for cheaper substitutes says it is inconceivable for the vast majority of the population to afford the real thing.
The vast majority of people who have HIV are poor and black in South Africa and young women are at greatest risk of infection in a country where more than 60% of employed people earn less than $250 a month.
TRAC says the problem is wider than just affordable AIDS drugs as even access to drugs for opportunistic infections are increasingly limited. This includes no treatment for retinitis, meningitis, or even serious cases of candida, notes TRAC.
According to UNAIDS, in order to make a dent in dealing with the HIV/AIDS problem in Africa wealthy nations need to make firm commitments to support national programmes to the tune of $3 billion annually - this is about 10 times the amount currently being spent.
We are a trade agency, not an aid agency, says Harmon. The primary job of the Export-Import Bank will be to provide Congressionally-mandated financing for credit-worthy US exports and to create US jobs.
Wendy Roseberry, senior technical expert for Southern and Eastern Africa, says the initiative is welcome in that it affords African governments one more option in their choice of a strategy to deal with the crises.
She, however, says while the Durban conference put the spotlight on the issue of how best to provide treatment, enough is still not being done to tackle AIDS internationally. She also expresses concern at whether impoverished nations will be able to afford more loans to deal with HIV/AIDS.
While we seem to be focusing on debt relief on one hand we are talking about borrowing for AIDS on the other, she says. These are hard policy choices for sub-Saharan Africa. Some countries have no choice other than to borrow to mitigate new infections that would cost more in the long run.-SUNS4713