May 9, 2003
by Carol Adelman
Around the world, scientists are racing to find a vaccine for Severe Acute Respiratory Syndrome before the deadly disease spreads any further. Some work in government laboratories. But many more in private laboratories, funded by the global R&D-based pharmaceutical industry, will be needed to bring the vaccine to market.
Working at breakneck speed, they will scour the thousands of old compounds developed in the search for new treatments that never worked. If we're lucky they may find one that cures SARS. This was how the first AIDS drug, AZT, was discovered. A failed cancer drug, it was successfully put to use in suppressing the AIDS virus, making it possible to protect pregnant women from transmitting the AIDS virus to their newborn babies.
The scientific and industrial infrastructure that the world expects to keep it healthy is made possible by patents. Because of America's strong intellectual property system, eight out of ten of the world's best-selling drugs were developed by U.S. companies.
But while everyone waits hopefully for the laboratories and pharmaceutical companies to develop and test new drugs for SARS, the system that stands the best chance of creating such a cure is coming under attack -- a move that will have life or death consequences for the development of new drugs to treat future pandemics as well as the 42 million people already infected with AIDS.
In recent years, it has become fashionable for Third World activists and First World pundits to argue that patents on AIDS drugs -- and, for that matter, all drugs -- are a major obstacle to treating poor people in developing countries. Those arguments are expected to be pressed home at a meeting of the World Trade Organization's Trips Council in Geneva early next month, where the U.S. is likely to be almost alone (no prizes for guessing which side France and other members of "Old Europe" are on) in resisting pressure to create broad and permanent exceptions to patent protection in developing countries.
Patents aren't very exciting. They conjure up images of dusty old offices, arcane inventions and oddball inventors. The pharmaceutical industry gets blue in the face telling global activists that it takes $800 million to $1 billion dollars to bring a new drug to market, and that only one-third of these reap enough revenue to cover the cost of their development. Only charging the prices needed to recoup these costs can pay for all the failures and all the other lesser, but also critical, innovative drugs. And only a strong system of patents can enforce such a pricing structure.
Contrary to the activists' claims, poor nations benefit from patents. Millions in developing countries are now treated for tuberculosis, malaria and leprosy with lower-priced generic drugs that would never have been developed, but for the patents that initially protected them. Developing countries with strong patent laws -- such as Mexico, Brazil and Jordan -- also attract greater foreign investment and technology, the only long-lasting solution to underdevelopment.
Contrary to conventional thinking, patents do not make it more difficult to treat HIV/AIDS and other infectious diseases in the Third World. Most of the items on the WHO's Essential Drug List are not patented. Even when they are, the R&D-based companies choose not to enforce patents in the world's poorest countries, and provide AIDS and other drugs for tropical diseases to African countries either free of charge or at very low prices.
However, together with the U.S. government, they rightly draw the line at expropriating companies' intellectual property for any and all diseases that developing countries claim as emergencies. This "therapeutic creep" is what global health activists can be expected to push at the upcoming WTO meeting. Egypt has even suggested that erectile dysfunction could qualify as a "national emergency," and so exempt their men from honoring Viagra patents.
Global health activists are pushing the U.S. and U.N. to buy cheap generics from India and other less-developed countries so that money for AIDS programs will go farther. This ignores the fact that these generic drugs are only better value if they are safe and effective. Many of these drugs are made under less developed manufacturing-safety and quality standards. A study in the Lancet found that about half of sampled drugs in Nigeria were substandard, as are more than a third of tablets from shops in Southeast Asia, some of which contained no drugs at all. Similar results emerged from a report on the quality of medicines in developing countries to a World Health Organization meeting in Oct. 2002.
As Roger Williams, chief executive of U.S. Pharmacopeia, America's national quality and safety-standards setting body for medicines, points out: "There are likely to be few faster ways to induce resistance to current AIDS drugs than by treating patients with counterfeit substandard products."
The international health community must follow the Hippocratic Oath and, above all, do no harm. In development work, good intentions are not good enough. That means resisting pressure to buy cheap generic drugs from India and other less developed countries unless they are subject to independent and rigorous testing programs.
If patents are not the problem and if low-cost generic drugs have long been available for treatment in developing countries, why aren't essential drugs getting to these poor people?
Poor health-care infrastructure, low health-care budgets and corruption are all to blame. African governments need to reorganize their government priorities and put more money into the epidemics decimating their populations. World Bank data show that most spend more of their gross national product on their military than on health care. South Africa, with over 20% of its adult population HIV-positive, announced arms purchases of over $7 billion in 1999.
Africans also need to clean up their governments so that donated drugs are not diverted into black markets or to Europe for resale. Highly discounted GlaxoSmithKline AIDS drugs for West Africa, valued at €18 million ($20.4 million), were stolen in 2002 and then sold for higher prices in Europe.
In April 2001 Nigerian President Obasanjo announced that he was buying $3.5 million worth of generic AIDS drugs from CIPLA, an Indian company that copycats drugs developed by U.S. companies. The plan was to treat 15,000 Nigerians by the end of 2001. Two years later only 800 people are being treated, as most of the drugs have been stolen or have expired.
These tragic stories illustrate how little price and patents have to do with the problem of treating poor people. Caring about poor sick people and blaming patent laws is a cop-out. Caring about providing safe and high quality drugs and focusing on the real problems of infrastructure, both medical and moral, is the way to help the world's most needy.
Carol Adelman is a Senior Fellow at Hudson Institute and director of Hudson's Center for Global Prosperity. She served as a career foreign service officer for ten years and as an assistant administrator from 1988-1993 at the Agency for International Development (USAID).
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