Generic-drug makers brace for battle with pharmaceuticals

by Marwaan Macan-Markar

Mexico City, 11 Feb 2001 (IPS) -- The battle lines between the Western-based  transnational pharmaceutical industry and companies in the developing world that produce generic drugs have grown sharper this month, with anti-AIDS drugs being at the heart of this dispute.

Among the catalysts in such a turn of events include Cipla, an Indian pharmaceutical company, and the government of Brazil, both of which are adamant on challenging the stance of the pharmaceutical industry that it decides who should produce anti-AIDS drugs and at what price they should be sold.

Significant in the Cipla challenge, which came to light on 6 February, is the price at which it is prepared to sell large quantities of the triple-therapy cocktail of anti-AIDS generic drugs to African countries. The amount ranges from $350 per year if the drug combination is sold to patients to $600 per year if the same combination is sold to African governments.

By contrast, the same combination of drugs sold in the United States by the pharmaceutical companies that hold the patents costs between $10,000-15,000 per year.

On 15 February, furthermore, the Cipla offer is due to evolve from an announcement to action, when company representatives meet the Paris-based medical aid agency Doctors Without Borders (known by its French acronym MSF, for Medecins Sans Frontieres) to work out plans to distribute its generic drugs.

The Cipla offer has received a nod of approval from the World Health Organisation (WHO). In a statement issued on 9 February, the leading UN health agency declared that it “welcomes recent reports” of the combined triple-therapy medication of anti-AIDS drugs being made available cheaply in Africa for those afflicted with HIV and AIDS.

“The cost of medication is one of several factors limiting access to life-extending care for people living with HIV/AIDS,” the Geneva-based health body states. “The reduction in the cost of anti-retroviral medicines and other drugs combatting opportunistic infections is one of the key objectives of accelerating access to effective care for people living with HIV.”

The dispute between Brazil and the pharmaceutical industry centres on the right to produce generic anti-AIDS drugs. At the beginning of this month, the South American nation made its intentions clear, when it threatened to back local production of generic versions of two anti-AIDS drugs if the pharmaceutical companies making those drugs refused to lower their prices by June.

Such defiance came after the US government filed a complaint with the World Trade Organisation’s (WTO) Dispute Settlement Body over Brazil’s intention to “violate” patent rights, consequently defending a US pharmaceutical company involved in this discord.

“The US complaint threatens the Brazilian AIDS policy, which includes providing free drugs to HIV-infected people. The lives of hundreds of thousands of patients depend on this system,” declared Bernard Pecoul, director of MSF’s Access to Essential Medicines campaign.

The Brazilian government is currently treating over 90,000 patients afflicted with the human immunodeficiency virus (HIV) that causes acquired immune deficiency syndrome (AIDS) through the generic anti-AIDS drugs produced domestically. Since such efforts began, moreover, it has resulted in a decrease of AIDS deaths by 50 percent.

Nevertheless, it appears that pharmaceutical companies are determined to assert their power in the wake of such challenges, thus ensuring control over the production and distribution of drugs.

Such determination, in fact, is amplified in a court case due to commence in South Africa early March. And given what is at stake - billions of dollars in revenue - it is bound to sharpen even further the battle lines between the pharmaceutical industry and advocates backing the production and distribution of generic drugs.

In this legal dispute, 40 pharmaceutical companies will be suing the South African government for enabling the import of generic anti-AIDS drugs into South Africa under the country’s Medicines Amendment Act of 1997.

For Richard Jefferys, project director at the New York-based AIDS Treatment Data Network, such a court case is “morally repugnant”.

In Ghana, he adds, patients with HIV who were taking the generic version of Combivir, an anti-AIDS drug, “have literally had their drug supply cut off” following a lawsuit by Glaxo Smithkline, a leading pharmaceutical company.

“They are already the most profitable industry in the world, and lives surely do not have to be sacrificed to keep their stockholders happy,” he asserts.

Moreover, there are other factors that explain why such challenges are being mounted against the drug industry. According to MSF, for instance, even when pharmaceutical companies have demonstrated a will to cut the prices of anti-AIDS drugs, they have been slow to deliver on their commitments or the cheaper drugs were still prohibitively priced for the developing world.

By last December, MSF points out, there had been “little progress” on a promised discount on anti-AIDS drugs made last year by five pharmaceutical companies to nations in Africa, where close to 25 million people are infected with HIV out of the 36 million people infected worldwide.

To date, only agreements with three African countries have been reached under that initiative, “Accelerating Access”, which is backed by the Joint United Nations Programme on HIV/AIDS (UNAIDS). The three countries are Senegal, Uganda and Rwanda.

And for MSF, not only is the amount that Senegalese pay under this initiative too high - between $1,000-1,800 per patient for annual treatment - but the number of patients who will benefit under such effort will only be around 900.

For James Love, director of the Consumer Project on Technology, a Washington DC-based consumer rights group, the attitude of the pharmaceutical companies has left governments in the Third World with little alternative but to turn to generic anti-AIDS drugs as a remedy against the killer disease.

“Governments have a responsibility to protect their people and they should draw the line when the price for medicines is too high,” he argues. “You have to look at the reality, since drug companies are determined to control prices at the expense of the sick.” The pharmaceutical industry will have more challenges to contend with in the future, given the emergence of generic-drug manufacturers in Thailand, Pakistan, the Philippines and China.

Adds MSF: “Developing countries should take full advantage of their rights to produce or import generic drugs under the WTO’s TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.”

Such a view by MSF stems from the conditions spelled out under the TRIPS Agreement, which allows for a special provision, called “compulsory licensing”, that permits countries to produce drugs which are under patents in cases of public health emergencies or where there is unfair pricing.

If heeded, it could propel the animosity between the patent-holding drug companies and advocates of generic alternatives to a more intense level in the future.

But the United States is trying to use its power of bilateral threats (using its trade law ‘Super 301’), bilateral and regional agreements, as well as the negotiations for the Free Trade Area for Americas, to tighten up investment and intellectual property rules - to take away even the limited leeway now available under the WTO accords.