AIDS Drugs for Africa


Scott McLarty

On
Wednesday, May 10, President Clinton issued an Executive Order (EO) titled
“Access to HIV/AIDS Pharmaceuticals and Medical Technologies.” The order
reverses the White House’s earlier policy and says the U.S. will no longer
challenge sub-Saharan African nations that seek to produce low-cost generic
AIDS drugs (“compulsory licensing”) and buy low-cost drugs on the
international market through comparison shopping (“parallel importing”).

It’s an
important shift in policy, but deserves close scrutiny. In the past, the U.S.,
in the person of Trade Representative Charlene Barshefsky, has threatened
non-white developing nations with economic sanctions for using these practices
to help suffering populations. The threats were never leveled against white
and wealthy North American and European nations that used compulsory licensing
and parallel importing. There was little pretense that she did so on behalf of
powerful U.S. pharmaceutical lobbies with close ties to both Clinton and Gore.

Vice-president
Gore had also leveled these threats, during meetings of the U.S./South Africa
Binational Commission (BNC), of which Gore and South African President Thabo
Mbeki are co-chairs. Gore enjoys a cozy relationship with drug companies; his
connections include David Beier (domestic policy advisor), former head
lobbyist for Genentech; Tony Podesta (advisor), lobbyist for the
Pharmaceutical Manufacturer’s Association; Tom Downey (confidant), lobbyist
for Merck; and Peter Knight (fundraiser), former Schering-Plough lobbyist.

Clinton’s
action, at this late date, has less to do with his own good will than with the
embarrassing protests the Administration faced from AIDS activists at Gore
campaign stops in 1999, from critics like Ralph Nader, and from outraged
nations around the world. The Clinton administration finally caved in when
Senators Dianne Feinstein (D-CA) and Russ Feingold (D-WI) threatened to
filibuster Clinton’s “Africa Growth and Opportunity Act,” which would
open up Africa to even more exploitation in the name of “free trade,”
unless he alters the policy.

The EO is also
a capitulation to the demands of the Health GAP (Global Access Project)
Coalition at the April 12 meeting with Clinton officials, including the U.S.
Trade Representative (USTR), Office of AIDS Policy, National Security Council,
and Health and Human Services staffers. AIDS activists thus deserve the credit
for the policy reversal, not Clinton or Gore.

The Clinton
White House—especially Gore—thus repositions itself politically on a
sensitive issue, especially in light of the role Nader played in exposing an
atrocious trade policy—Nader’s run on the Green ticket may block Gore’s
bid for the White House. This is an executive order, not a piece of
legislation, and can be rescinded by any future executive. It’s therefore an
incentive (“constraint” or “blackmail” are perhaps better words) for
anyone who cares about the issue to vote for Gore, since Nader has no chance
of winning the 2000 election.”

The EO also
follows Clinton’s declaration in April that AIDS is an international
security threat. The statement was motivated by a CIA report titled “The
Global Infectious Disease Threat and Its Implications for the United
States,” and dated January, 2000. (It can be read at www.cia.gov/cia/publications/nie/report/nie99-17d.html.)
The report was released as a “National Intelligence Estimate” and analyzes
in detail the global impact of HIV, its similarities and differences with
numerous other epidemics, and current trends in the spread and efforts to
contain it, with a list of “plausible scenarios” for the course of the
disease.

Some of the
most revealing sections of the report cover the economic and
“macroeconomic” impact, such as likely trade disruptions, lowered life
expectancy and population count, shattered family structure, and political
destabilization. In developing countries, HIV “will hamper the development
of a civil society and other underpinnings of democracy” as “infiltration
of these diseases into the ruling political and military elites and middle
classes…are likely to intensify the struggle for political power to control
scarce state resources.”

The resulting
risks to the U.S. include bioterrorist warfare and terrorism (the report
doesn’t limit itself to HIV), the closing of borders to trade, drops in
employee productivity, increases in employee benefit costs, and tolls on
corporate profits and foreign investment. The report admits that “the
negative impact on health care delivery of privatization and the transitions
in former communist states is likely to be most heavily felt in the immediate
future,” although the economic allegiances of those compiling the data are
clear, despite the failure of corporate-based health coverage in the U.S,
i.e.,: “Free market reforms eventually will improve health care delivery.”

Critics have
noted that Clinton’s executive order does not cover South American and Asian
countries, which, we can presume, remain under threat of sanctions. The EO
does not cover drugs for diseases unrelated to HIV.

The EO also
digresses from the main issue—access to medicine—and focuses on the need
of sub-Saharan African nations to undertake prevention and education. But the
steps many African countries have taken or will take towards prevention and
education do not erase the fact that lots of Africans are already infected,
and need medicine for AIDS and other ailments as soon as possible.

The EO never
admits that compulsory licensing and parallel importing are already compliant
with international trade law (TRIPS)—a point raised by protestors, by South
Africa and other countries, and by the U.S. Patent and Trademark Office in
March 1999. Instead, it sets up a review process that requires a sub-Saharan
nation’s drug policy to win approval by the U.S., and ominously, requires
confirmation from U.S. authorities—i.e., U.S. Trade Representatives, who
have always acted in the service of pharmaceutical firms—that the nation’s
policy is in compliance with the intellectual property rights agreements in
TRIPS.

Up to this
point, the USTR and the Clinton administration usually ignored or
misrepresented the TRIPS intellectual property rights guarantees, which is why
the U.S. has threatened African nations for the past few years for trying to
use compulsory licensing and parallel importing to get low-cost AIDS drugs to
their people. In a June 25, 1999 letter to James Clyburn of the Congressional
Black Caucus, Vice-president Gore said he supports “South Africa’s effort
to enhance health care for its people, including efforts to engage in
compulsory licensing and parallel importing of pharmaceuticals—so long as
they are done in a way consistent with international agreements.” Gore thus
obfuscated the fact that the practices are already compliant.

Congress
colluded with the policy. The House of Representatives rejected the Sanders
Amendment to a state department appropriations bill, in a 307 to 117 vote on
July 21, 1999, which would have blocked the state department from pressuring
Asian and African nations to drop practices necessary to make essential drugs
available when the practices comply with TRIPS. Seven members of the Black
Caucus and 110 Democrats voted to eliminate the Sanders Amendment.

Clinton’s
EO is therefore a dramatic reversal in policy, but its effect will be limited.
A May 11 press statement by Medecins Sans Frontieres (Doctors Without Borders)
said “While the Executive Order is a step in the right direction, Doctors
Without Borders is concerned with its restriction to only HIV/AIDS drugs in
‘beneficiary’ sub-Saharan African countries. This falls short of the
statement made by President Clinton in Seattle on December 1, 1999, in which
he broadly stated that the United States will, ‘henceforward implement its
health care and trade policies in a manner that ensures that people in the
poorest countries won’t have to go without medicine they so desperately
need’.”

The EO
doesn’t set up a program or direct money toward any program, but it
establishes a policy on which U.S. Trade Representatives may negotiate in the
future, preventing them, we hope, from bullying African nations for taking
steps to help sick citizens.

In another
arena, however, the U.S. maintained the earlier pro-corporate policy. At the
53rd World Health Assembly in Geneva, Switzerland on May 17, 2000, the U.S.
delegation, headed by Dr. Tom Novotny, led the opposition to an amendment to
the World Health Organization’s HIV/AIDS resolution. The amendment, proposed
by Brazil, would have established a worldwide database of medicines and prices
that would have given countries a certain amount of leverage in negotiating
purchases from drug companies. The database would serve as proof that the
ability of generic drugs in any given country pulls down all drug prices.

At one point,
Dr. Novotny lied to delegates that compulsory licensing is illegal in the U.S.
In fact, the U.S. issues hundreds of compulsory licenses every year. Finally,
on May 20, WHA voted for a compromised version of the proposed amendment,
after the U.S. and other western nations debated a coalition that included
Zimbabwe, Swaziland, Mozambique, and other developing nations. Ministers from
these nations insisted that their national public health policies could not
depend on bargains with multinational drug companies. The compromise blocked
Swaziland’s recommendation to advocate parallel importing.

“The fierce
insistence by African delegations that access to affordable medication take
priority over the interest of drug companies was a wake-up call to the
industry-besotted U.S. delegation,” said Asia Russell in a press release
from ACT UP. “In spite of strong opposition, developing nations successfully
changed the mandate of the WHO on the crucial issue of affordable medications
for HIV.”

“The actions
of the U.S. representatives caused some delegates to question the sincerity of
the Clinton [executive] order,” added Sharon Ann Lynch of ACT UP
Philadelphia.

In response to
Clinton’s executive order, five U.S. drug companies, in an agreement with
WHO’s UNAIDS office, announced on May 11 that they will offer huge discounts
on AIDS drugs in several African countries. Bristol-Myers Squibb, Glaxo
Wellcome PLC, Merck, Roche Holding AG, and Boehringer Ingelheim GmbH said
they’ll reduce some of their prices to as little as 10 to 15 percent of
American prices.

This has little
to do with “commitment” to helping the sick. The motivation is fear that
generic drug production, now less likely to be challenged by the U.S., will
cost these companies their monopolies on many drugs. Activists worry that
nations accepting these discounts may be required to cease generic drug
production. What looks like charity is a useful strategy to defend high prices
and maintain monopolies, instead of allowing national governments a measure of
medical self-reliance and, ironically, the kind of capitalist competition that
would reduce prices.

ACT UP
Philadelphia released a statement on May 12 charging that “the prohibition
against compulsory licensing ties the hands of poor nations seeking self
sufficiency, and imposes a remedy dependant on the generosity of multinational
corporations.” ACT UP also notes that the price reductions offered by
industry would not be sufficient to ensure widespread access in poor
countries.

According to
the May 11 analysis by Doctors Without Borders, “The net effect of
implementing this type of program could lead to a further consolidation of the
AIDS drug market in the hands of a small number of multinational drug
companies. It will likely discourage the growth of manufacturing capacity in
developing countries.”

“The African
initiative also helps penetrate one of the darkest secrets of the
pharmaceutical industry: how they set prices, said David Paltiel, an associate
professor of health policy and administration at the Yale Medical School. The
fact that prices for AIDS drugs can be reduced 90 percent without producing
losses for the companies shows that drug prices are largely set by determining
what the market will bear, not what the price of the product is, he said.
Sidney Wolfe, director of Public Citizen, an advocacy group in Washington, DC,
said that drug makers’ contention that they are selling their drugs at
near-cost when they slash the price by 85 percent to 90 percent simply isn’t
accurate. The cost of producing the drugs, Dr. Wolfe said, is far less than 10
percent of their American prices” (“AIDS Drug Plan Spurs Call To Cut
Prices Elsewhere,” Wall Street Journal, May 12, 2000).

(American
prices for drugs are much higher than prices for the same drugs in European
nations and Canada, because government officials who administer their
respective national health coverage plans negotiate the prices in those
nations. The U.S. does not provide guaranteed national health insurance, so
drug prices are negotiated by competing HMOs. One of the results is that older
Americans, especially folks on Medicare, which doesn’t cover prescription
drugs, often pay prohibitive prices that push many into poverty.)

“At world
trade conferences like the one in Seattle in December that attracted many
protesters, drug companies have been portrayed as racking up record profits by
concentrating on drugs to cure relatively minor problems like obesity,
baldness and impotence among rich Americans, Western Europeans and Japanese,
who make up 80 percent of the world drug market, while ignoring dire suffering
in places like Africa, which buys 1 percent of the world’s drugs”
(“Companies to Cut Cost of AIDS Drugs for Poor Nations,” the New York
Times
, May 12, 2000).

Doctors Without
Borders notes that initiatives designed under the advice of pharmaceutical
firms have resulted in minimal price reductions, and urges widespread generic
competition, anathema to private corporations: “The solution to the access
crisis should not be driven by protecting commercial interests.”

The
organization contrasts corporate-friendly initiatives with Brazil’s national
health policy: “By the end of the year 2000, by using more cost-effective,
locally produced generic drugs, Brazil will be able to offer combination
anti-retroviral therapy to its citizens at approximately U.S. $1,000 per year
compared to a global price of $10,000 to $15,000. Political commitment plus
high quality local production has already led to a dramatic increase in access
to AIDS drugs in Brazil.”

Among ACT UP
activists, the reaction was skeptical. “While price reductions are a
positive step, the recent drug company announcement is also a public relations
move. Industry is busy planting news stories in the Financial Times and
other outlets claiming that pricing is no longer the problem, and that African
nations are unwilling or too corrupt or incompetent to take advantage of this
offer,” said Abdul Hakim of ACT UP. “But at this year’s World Health
Assembly, PhRMA’s fear moved closer to reality: empowered developing nations
demanded and won unfettered rights to pursue creating autonomous, sustainable
programs for affordable medication access.”

In response to
both the President’s EO and the announcement by the drug companies, ACT UP
reasserted several demands:


  • 1. Deep price reductions for people with HIV in developing nations
  • 2. Agreement from firms
    that hold patents to grant voluntary licenses for alternative drug
    production and importation by poor countries
  • 3. Reduced corporate drug
    prices must not require an agreement by a country to abandon compulsory
    licensing and parallel importing
  • 4. Significant price
    reduction must cover all drugs used to treat HIV, not only anti-viral
    drugs
  • 5. An open and
    transparent development of policy, involving local representatives and
    consumers at all levels
  • 6. Suspension of lawsuits
    against nations that use strategies like compulsory licensing and parallel
    importing

ACT UP’s role
continues to be crucial in challenging administration policy and corporate
profiteering, and it reveals a sea change within the organization itself. In
the late 1980s and much of the 1990s, ACT UP New York served as a model for
chapters that sprang up around the U.S., and New York led the movement for
access to AIDS drugs, housing for people with HIV, sane education and
prevention policies, and universal health care. As members began to fall away,
through death, burn-out, attraction to other activist venues, the smothering
effect of a president who claimed to “feel our pain” while offering some
access and a few concessions, and many other reasons, ACT UP New York’s
presence faded.

By the end of
the 1990s, Philadelphia had become the center of ACT UP activity. ACT UP
Philly took the lead on the crisis of drug access in developing nations. Its
membership displays the changing demographic of AIDS. At a major demonstration
on October 8, 1999 at the office of USTR Charlene Barshefsky in Washington,
DC, the overwhelming majority of participants were bused in from Philadelphia,
and out of over 500 protestors, at least 90 percent were African American, a
fact ignored by both mainstream and gay media.

Fourteen people
were arrested for lying down in the street in an act of civil disobedience.
ACT UP Philly also organized protests to coincide with World AIDS Day and the
WTO summit in Seattle on November 30 and December 1, and sent buses to the
mid-April protests at the World Bank and International Monetary Fund in
Washington, DC. Some ACT UP members and others reported severe abuse by DC
police and U.S. Marshals.

ACT UP
Philadelphia suffered a tremendous blow on May 10 with the death of Kiyoshi
Kuromiya, a long-time activist for the rights and well being of queers and
people with HIV. Kiyoshi founded and published the Critical Path
AIDS Project newsletter and source of information on access to aggressive HIV
treatments. Philadelphia FIGHT, its fiscal sponsor, said it would continue the
work of Critical Path, under the interim leadership of Julie Davids,
founder of Project TEACH (Treatment Education Activists Combating HIV).
                            Z

Scott
McLarty is active in the DC Statehood Green Party and has participated in ACT
UP.