story of the decade, and perhaps the century, has finally made it to the front
pages: millions of people who could be saved are dying from AIDS. The reason for
their unnecessary, premature, and often agonizing deaths is now becoming clear:
it is pure, unadulterated greed.
is a scandal of biblical proportions. The $350 billion pharmaceutical industry
– one of the most profitable and powerful in the world — has teamed up with
its allies in the US government to deny millions of people access to affordable,
life- saving drugs.
the United States, people who are infected with the HIV virus can now have their
lives extended indefinitely through a combination of drugs known as AIDS
cocktails. The cost of these drugs is $10,000 to $15,000 a year — placing them
far out of reach of the 33 million people in low-income countries, including 25
million in sub-Saharan Africa, who need them.
the cost of producing these drugs is a tiny fraction of their price. An Indian
generic drug manufacturer, Cipla, recently offered to provide the drugs to
governments for $600 and to non- governmental organizations for $350.
millions of people these drugs would become affordable; in the poorer countries,
where annual income per person is in this range, they would be affordable with
relatively modest foreign aid from the richer countries.
the pharmaceutical companies are adamant. "They are stealing my intellectual
property, and I cannot accept that," said a top Merck official.
people would not be convinced by this argument. Should millions of people be
condemned to death in order to protect the patents of pharmaceutical companies?
the face of growing political pressure and moral outrage, the drug companies
have begun to offer some of these drugs at increasingly steep discounts. But
even Merck’s latest offer, ostensibly at cost for two of the commonly used drugs
that make up the AIDS "triple cocktail," would still leave the price at 3-4
times what generic competition would bring.
are also a number of other problems with allowing private monopolies to
determine the price and availability of these desperately needed medicines. The
cost in human life could be very high if they decide to drag their feet, demand
other concessions, change their prices, or otherwise abuse their God-like power
over the lives of millions.
companies counter with an economic argument: these drugs would not exist if not
for the monopoly profits that finance research and development. But there are
other ways to fund this research — in fact many of most expensive new drugs
were discovered with the help of public funds.
a strictly economic point of view, a patent monopoly is a very inferior means of
financing research. A basic principle of standard microeconomics is that the
price of a good should be equal to the cost of producing an additional unit.
Monopoly pricing, especially at 15 or 20 times the cost of production — is
enormously wasteful and inefficient. And in the case of essential medicines, the
toll of this inefficiency is measured in human lives.
matter of law, US patents do not automatically extend beyond our borders. But
the drug companies and their allies in Washington have a formidable arsenal of
weapons to force compliance from poor countries. These include economic
pressures, lawsuits, and the World Trade Organization. When South Africa —
where 4.2 million people are infected with the AIDS virus — passed its
Medicines Act in 1997 to make these drugs more cheaply available, Washington
retaliated with trade sanctions, postponed aid, and other economic threats.
Public pressure from activist groups forced the Clinton administration to
reverse its policy against South Africa. But the battle was far from over. For
example, the United States is currently pursuing a complaint against Brazil at
the World Trade Organization over a Brazilian law aimed at increasing domestic
production of AIDS drugs. And the pharmaceutical companies are still challenging
South Africa’s law in that country’s courts.
is a simple reform that is consistent with basic humanitarian as well as
economic principles: no enforcement of patents for essential medicines in low-
income countries. This would allow for treatment of millions of people who would
pharmaceutical companies do not appear ready to abandon their quest for
worldwide monopolies over the drugs that they produce. But the public is
becoming increasingly aware of their role, and it is hideously indefensible. It
may take more severe pressures — such as boycotts by consumers and investors of
the offending companies — before they get the message. But sooner or later,
they will have to let go.
Weisbrot is co-director of the Center for Economic and Policy Research in