Behind Dramatic Declarations: Bush’s AIDS Plan


Winning praise from the editorial staffs of The Washington Post and The New York Times, Bush’s AIDS plan has been described as a wonderful “surprise” to those working against the global pandemic–a turnaround from previous policy, especially for a White House that has for so long been strongly connected to the patent-based pharmaceutical industry. Even some major NGOs sat back in awe at the prospect of a $15 billion contribution to AIDS (including $10 billion in new monies) from the Bush White House. The plan is to include treatment–not just prevention–with generic medicines.

But behind the rhetoric of the State of the Union lay a much darker picture of White House policy. In the fine print of the Bush AIDS proposal is a consistently with previous policies: the plan, first of all, excludes 36 of the highest burden African countries from receiving funds. The $15 billion is also spread over five years (making it about equivalent to the rounding error on the defense budget), and nearly all but $200 million a year will be routed through mechanisms other than the Global Fund for AIDS, TB and Malaria. The Global Fund contribution, in other words, is unchanged. This reflects a continuation of White House policy to undercut the Global Fund (preventing future, multilateral commitments) while claiming to support anti-AIDS efforts. Previous AIDS funds have also been consistently directed to USAID instead of the Global Fund–and USAID’s programs (which almost totally exclude treatment, except for four pilot projects) have become notorious for failing to provide appropriate, comprehensive care, as well as for “lapsing” into abstinence-based-prevention-mode. The funds seem to be magically “redistributed” away to other programs periodically. The Global Fund, meanwhile, has declared bankruptcy as of last Friday.

But an even darker part of this AIDS plan relates to its policy on generic drugs. Bush declared that AIDS drug prices have lowered to $300 per year–which is correct, if you are purchasing from generic manufacturers. The problem is that the US Trade Representative (USTR) has threatened poor countries around the world with trade sanctions (using what it calls the Special 301 Watch List), forcing them to change their intellectual property rules to be more stringent than those required by the World Trade Organization. Two of the main types of antiretroviral drugs–nevirapine and 3TC–will be illegal to import to 37 of the African countries covered by the Bush proposal precisely because of the consistent pressure of the USTR to prevent generic competition for the U.S. pharmaceutical industry. While the Bush plan claims to support generic funding, the policies of the USTR under Bush simultaneously undercut the possibility of actual generic use.

The story doesn’t end there. Last December, at a WTO council meeting, trade ministers from around the world were to settle on the mechanism by which poor countries without the capacity to produce medicines were to import cheap generic drugs. In November of 2001, at the Doha conference of the WTO, the USTR and other trade ministers signed a declaration to allow “access to medicines for all” on the premise that intellectual property should be secondary to public health. They decided to also agree to a mechanism (by December 2002) that would determine how generics could be produced for exportation to poor countries without manufacturing capacity. Such a declaration sounds charitable, but the fact that it had to be declared is bordering on perverse. No one bothered to mention that a vast amount of the research and development on AIDS drugs (sometimes through the clinical trial stage) was paid for through tax payer funds directed through the National Institutes of Health (NIH) to divisions of the NIH and to universities: d4T was researched under the National Cancer Institute and Yale, ddI under the NIH, 3TC under Emory and Yale, nevirapine under NIAID and the NIH, and AZT under the NIH and the National Cancer Institute. Similar R&D histories exist for nearly all classes of medicines.

But in spite of these facts, the December 2002 meeting turned into a stalemate. Rather than decide on a clear mechanism to allow generics to be produced for exportation to the poorest of countries, the USTR decided to “reinterpret” the declaration made at the Doha conference, claiming that it applied only to a limited number of diseases, and also claiming that the countries most able to produce medicines could not export to poor countries. Even the legal mechanism for allowing exportation was to be woefully complex, effectively rendering generic competition impossible. The talks broke down after the USTR refused to negotiate. Even the EU trade minister blamed the USTR’s stubbornness for the lack of access to medicines, calling it representative of the pharmaceutical industry’s “stupid” position.

The industry, and the USTR, claims that generics would undermine the capacity to pay for research and development–that is, the research and development that American taxpayers actually foot most of the bill for. The industry doesn’t bother to release it’s own tax information, however, which reveals that Merck this year used 13% of its profits on marketing and only 5% on R&D, Pfizer spent 35% on marketing and only 15% on R&D, and the industry overall spent 27% on marketing and 11% on R&D according the Securities and Exchange Commission. That’s not accounting for the fact that 52% of new drugs on the market aren’t even the result of R&D, but are “me too” drugs that are simple reformulations of old products slapped with new stickers.

The industry still claims that generics will undermine its business, even as it continues to be ranked by Fortune Magazine as the world’s most profitable industry for 11 years in a row (having profits as a percentage of revenue nearly three times the rest of the Fortune 500 industry). When confronted with the fact that Africa comprises only 1.3% of the industry’s revenues (making its loss equivalent to “about three days fluctuation in exchange rates,” according to an industry analyst quoted in The Washington Post), the industry claims that generic drugs will get diverted to the North to undermine its key markets, and cites GlaxoSmithKline’s recent loss of AIDS drugs sent to Africa as a case in point. But a look at the GSK case shows that Glaxo failed to even track the shipments and only discovered after a year that its packages to Africa had been shipped improperly, allowing them to be smuggled to Europe. Tracking mechanisms, however, seem to be no trouble for neighborhood flower shops. Indian generic manufacturers, meanwhile, have shipped medicines for over two decades without a single case of “diversion”.

But based on the rhetoric–and the $20 million in campaign contributions (hard and soft)–of the patent-based pharmaceutical industry, the USTR and the White House have decided to continue their campaign against generic drugs. While losing the support of even the EU at the WTO, the USTR has decided that if it can’t multilaterally cut off access to cheaper medicines for the poor, it will do so through bilateral and regional trade agreements. So the current draft of the Free Trade Area of the Americas excludes key public health protections and creates mechanisms far too difficult to achieve generic access. One common mechanism used by the USTR is to force one country to have another country pass legislation for exportation of goods. In other words, India’s government would have to pass legislation to authorize exportation of medicines from Indian companies to Pakistanis. What a politically feasible plan! The USTR is expanding such a model in a second agreement with a group of Latin American countries, a plan for sub-Saharan countries, and for bilateral deals with countries like Morocco and Jordan.

Cutting off medicine access isn’t the only hypocritical part of the Bush AIDS plan, however. The deeper problem is not just one of medicine access–it’s that the economic and social effects of the free trade agreements are precisely those that spread AIDS. Epidemiologists and physicians have agreed that the number one epidemiological correlate to AIDS (and TB, and a number of other infectious and non-infectious diseases) is poverty. We saw the nasty effects of NAFTA on the health of Mexicans, and now the Free Trade Area of the America’s (FTAA) deal will expand that to the entire Western hemisphere. Migration in Thailand, as Walden Bello has shown, resulted from IMF packages there that destroyed rural agricultural systems and broke up families as laborers traveled to Bangkok for work. Marriages split, women lost jobs and entered into prostitution for work, and AIDS and TB spread among the poorest. The same trends have been established elsewhere. The excessive focus on “individual behavior” in public discourse on AIDS neglects the fact that most people in the world–according to broad surveys–know how HIV is transmitted. People scratch their heads at the continual prevalence of “risk behaviors” in spite of this, but it’s not so surprising. If there’s no food on the table, and prostitution is the only work available, doesn’t prostitution make sense? If Anglo American destroys agricultural systems to set up a mine, and laborers from hundreds of miles away travel there for pittance, spending six-to-seven days a week in all-male barracks, what happens when the company decides to “keep the workers happy” by supplying them with alcohol and prostitutes on breaks? The issue is not so much “behavior” as much as the conditions under which such behavior occurs.

And so the Bush AIDS plan may seem miraculous, and indeed it does add some funds to AIDS programs. But AIDS has become increasingly commodified, treated as a problem that can be solved with declarations while the broader public health and socioeconomic context in which it occurs is ignored. And that is the real problem with the Bush AIDS plan: as one hand provides a poor, leaky bandage, the other cuts deeper into the wound.

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