THE PRICE OF AIDS
February 21, 2001

After a background report, a panel examines the economic issues surrounding AIDS drugs. The NewsHour Health Unit is funded by a grant from The Henry J. Kaiser Family Foundation.

 

Online Special: The AIDS Crisis Feb. 8, 2001: New recommend-ations for anti-retroviral drugs July 13, 2000: Richard Holbrooke on the international response to the AIDS epidemic. July 12, 2000: The staggering levels of AIDS. July 10, 2000: International AIDS Conference July 6, 2000: Botswana has one of the highest rates of AIDS in the world May 2, 2000: AIDS as a national security threat Aug. 31, 1999: Tracking AIDS in America June 3, 1999: Mbeki wins election Dec. 2, 1998: AIDS rate on the rise in South Africa July 24, 1996: An interview with South African President Thabo Mbeki Browse the NewsHour's coverage of health.   News for Students: AIDS and HIV are hitting young people too, with force.     World Bank resources on HIV/AIDS World Health Organization resources on HIV/AIDS	ELIZABETH FARNSWORTH: And we turn now to Joelle Tanguy, the U.S. executive director of the organization Doctors Without Borders, a leader in the campaign for cheaper AIDS drugs; Jeffrey Sachs, a professor at Harvard University and chairman of the World Health Organization's Commission on Macroeconomics and Health; Dr. Glaudine Mtshali, South Africa's health representative to the U.S., Canada, and Brazil; and Shannon Herzfeld, senior vice president of international affairs for PhRMA, an association representing American drug makers. ELIZABETH FARNSWORTH: Joelle Tanguy, do you agree with what Ms. Zewdie said, the World Bank representative we just heard, that, quote, we are in almost a defining moment in history in our dealing with worldwide AIDS -- and if so why? JOELLE TANGUY: I would actually agree. I think what is happening here is that we used to be a couple of years ago simply, you know, we do field work in Africa and Latin America and Asia -- totally frustrated doctors really witness to the patients not being even able to contemplate treatment for AIDS, for opportunistic diseases of AIDS, as well as a number of other infectious disease conditions. Now we are looking at a situation where the issue is finally being understood as a global issue -- as a global issue, not just an African issue, not just a Latin America issue and to a global issue is required a global response. And the second point is this, beyond a lot of the announcements that have happened in recent years, I think we are getting close now to having the first stumbling block removed along the way of treating AIDS patients: The price. And we can move on and address some of the other issues. ELIZABETH FARNSWORTH: Dr. Mtshali, do you agree with that and how important for South Africa is today's announcement about the free drug from Pfizer? DR. GLAUDINE MTSHALI: For South Africa it's very important. I think you may be aware that South Africa has attempted doing what Brazil is doing at present and for which it is highly commended. We had passed legislation in '97 already that would have allowed South Africa to import cheaper drugs or to produce its own generic versions, but unfortunately we were taken to court by 40 pharmaceutical companies and we will be in court about that in the next two weeks. But it is critical for us. We also understand that we must have the necessary infrastructure in order to make sure that those drugs are appropriately given, taken and monitored. ELIZABETH FARNSWORTH: And, Jeffrey Sachs, you've said that the current situation is a catch 22 situation; what do you mean?
	Forces coming together
	JEFFREY SACHS: Well, the problem is that a number of forces have to come together to make a solution, but I think it's about to happen actually. What the drug companies have done recently is said, yes, we will cut the price sharply. As your story indicated three countries have already negotiated significant discounts, but nothing has happened since then because those countries are too poor to buy the drugs even at a very deep discount. There is one player that has not come forward yet but I think will, and that is the U.S. government and counterparts among the rich countries in Europe and Japan. Unless the rich countries put up the money to buy these drugs at the discounted prices, and provide them essentially for free in the impoverished countries in Africa, nothing will happen. But if the donor countries now come forward and say, yes, the prices are low enough that we are actually able to foresee a large scale effort at treatment, then I think the pieces will quickly come into play. ELIZABETH FARNSWORTH: And, Shannon Herzfeld, before we go on, briefly, what is your view of the current moment, how do the drug companies see it? Is this really the turning point? SHANNON HERZFELD: I think we are firmly committed to make sure that our life saving therapies get to patients not only in the U.S. and in Western Europe but into all countries, even the poorest of countries. And, in fact, we have been working hard for that goal. We discovered, we develop medicines, life saving therapies, but we can't get them to patients in the safe and effective way alone. We need partners. We need developing country partners. We need non-government organizations, and, as Dr. Sachs has noted, we also need the developed world to continue to take notice because the burden is great. ELIZABETH FARNSWORTH: Okay. We'll come back to solutions in a second but I want to get specific now. Joelle Tanguy, explain the Cipla offer to your organization and what difference it would make in a specific program in sub-Saharan Africa, for example. JOELLE TANGUY: The Cipla… generic manufacturer Cipla made an offer to which we are responding at the moment by trying to extend it to all other organizations, governmental and nongovernmental - UN agencies and so on -- involved in the treatment of patients in the world. AIDS patients. And what we are trying to say is that what you are saying is you can produce for $350. That is great. We actually believe that; we believe that competition can even drop the price further down -- possibly to $200. Let's make sure that this is made available to those who need it, and let's make sure that we can understand that the generic manufacturers just as the way that they have dropped the price in vaccines to such an extent that you can, you know, vaccinate in Africa for measles now where as you could not at the beginning of the introduction of the drugs, then it's the same thing here, that we have to engage generic manufacturers as well and not necessarily Cipla but a number of other initiatives is very successful initiatives in Brazil which have demonstrated that generic competition can drop the price. And when it's accompanied by a political will, a real commitment to address the crisis, then it really can have, you know, incredible effects such as a drop of mortality and morbidity of 50 percent and some major savings in public health support. ELIZABETH FARNSWORTH: Shannon Herzfeld, what is the view of your member companies of this offer?
	Copying products made elsewhere
	SHANNON HERZFELD: Well, I think Cipla has garnered quite a bit of attention in these past few weeks by making their offer but we all need to realize that Cipla is a very old India company who has made their business out of copying products that were invented in America and Western Europe. And they make a wide array of products from muscle relaxants to moisturizers, and now they are getting into the anti-retroviral business. I think the more important thing is to look at India. India has - ELIZABETH FARNSWORTH: What is your view of their offer? SHANNON HERZFELD: I think it is a distraction. I think we need to realize that every day in India, 3,500 people became HIV positive. And the World Bank says by 2005, there will be 35 million people in India who are HIV positive. Cipla is not a research company. The cures that are going to come to those Indians are going to come from our industry. And that is where the resources ought to be directed. ELIZABETH FARNSWORTH: It has been reported that had some of the companies are thinking of licensing the drug to Cipla, is that not true? SHANNON HERZFELD: I think any individual company is allowed to go into a license discussion with any company anywhere in the world. I don't have information. But I think we need to once again remember that long-term, 24 million people in Africa, perhaps 35 million people in India, are going to need simpler therapies, preventative vaccines and eventually a cure. That is going to come from the research-based industry. ELIZABETH FARNSWORTH: Dr. Mtshali, what is your response to that, and what does this mean for South Africa, the possible ability to get much cheaper drugs through somebody like Cipla? DR. GLAUDINE MTSHALI: I really think that is one of the initiatives that we will need to watch very carefully. I think Brazil has already shown that with price -- with generic substitution, there is leverage in that it forces down the prices of drugs. It's shown that there is an article that we read recently that shows that without a competitive drug that, for example, Brazil produces, prices over a four-year period may drop by about 9 percent. But when there is a generic equivalent, it can easily drop by about 79, 80 percent, which I think is what we need to work towards. If there is an understanding that competition drives down prices, then there is a road for generic drug manufacturers. And we certainly want to look at that example that is in Brazil and that is elsewhere. -- South Africa looks at sustainable solutions. And that is why when we talk about offers, drug offers, we want to make sure that it is paired with the initiatives that Pfizer has undertaken which is to also contribute towards infrastructure because it doesn't help to just drop drugs into a country and then not be able to sustain the introduction of them. ELIZABETH FARNSWORTH: I actually wanted to ask you about that, very briefly, the question is always raised whether a country like South Africa can distribute and provide these drugs safely with follow-up and the necessary testing.
	More resources from developed countries
	DR. GLAUDINE MTSHALI: We have a certain level of infrastructure but we certainly would need a lot more resources from the developed countries, from partners such as the pharmaceutical companies and I do think that we need to keep the partnership open. We do need the research and development of pharmaceuticals as well as generic manufacturers but we need to be willing to look at what countries are doing in order to build on existing infrastructure. ELIZABETH FARNSWORTH: All right. Jeffrey Sachs, put this in perspective for us, and while you're doing that, lay out what you would like to happen which is - you mentioned it before - U.S. Government help getting these drugs to poor people in other countries. JEFFREY SACHS: Thank you. I think it has to be understood that Brazil has an average income per year of about $3,000 per person. But most of sub-Saharan Africa has an average income of roughly $300 per person. They can't afford the drugs even at the highly discounted prices. So I think the issue of generics or major pharmaceuticals is not really the point. The major pharmaceuticals are ready to drop the prices substantially. We ought to take that offer and protect their intellectual property rights at the same time so they have the incentives to continue to innovate. But with the discounted prices, we need to get the drugs to the poorest people and the poorest countries and that is going to cost money that is going to have to come from the rich countries. It's really time right now for the United States and Europe to step up and put what for us is very modest amounts, but for Africa would be life-saving amounts of millions of people per year's lives saved of a few billion dollars to be able to purchase the drugs at discount and then get them safely and effectively to the people that need them. It has to be said also these are not easy medications to use. If there isn't high adherence by the patients, then there is a risk of rapid development of drug resistance so there has to be a lot of scaling up of capacity, a lot of training and a lot of new methods, some of which are being explored by my own colleagues at Harvard for example who have been successfully treating very poor people in Haiti using directly observed treatment where you watch the patients take the drugs to make sure that the adherence rates are high. All of this is to say that we need an international effort of partnership where the major pharmaceutical companies do what they've said they'll do, drop the prices -- where we respect their property rights, where the rich countries put up some of the resources and where the poor countries commit to make their meager resources but vital resources available for well thought out strategies and where our major scientific centers like the National Institutes of Health help to ensure that these complex drugs and protocols are used effectively to really save lives. If you do all of that, millions of people can be saved. Thank you. ELIZABETH FARNSWORTH: Joelle Tanguy, we have fairly limited time left, and I want all the rest of you to comment on that and say what you think really must be done right away.
	Need to subsidize
	JOELLE TANGUY: I agree with Jeffrey Sachs, that the political commitment, the collective engagement into subsidizing some of the poorer countries, the ones who any way even at $200 which is the price where it's not yet but hopefully we can drive it at will not be able to access the medicine. We need to subsidize that. We need now to make that political commitment. However, the devil is in the details in the proposal. We have to make sure that what we provide is really converging towards what we are trying to do which is not protect a trade agreement but fundamentally respond to a public health crisis and make sure that everything we do does respond to that. Further competition in order to respond to that crisis, supporting the governments that want to take the crisis head-on, address it, with local production, that would be good. That would be effective in some countries. So it's an either or situation but it's a definitely a frontal commitment for subsidies and engagement. ELIZABETH FARNSWORTH: Shannon Herzfeld, what is your view of what needs to be done now, briefly? SHANNON HERZFELD: We need structures in place to assure that when our medicines go into a country they actually get to the patients to which they are intended. Right now 88 percent of all pharmaceuticals going into sub-Sahara Africa still don't reach the proper patient. And until that is fixed, we end up possibly doing more harm than good, particularly with difficult therapies like HIV, AIDS and tuberculosis. ELIZABETH FARNSWORTH: And, Dr. Mtshali, what do you see in the near future that must be done? DR. GLAUDINE MTSHALI: We need to continue working on these partnerships. We need to make sure if we make offers to any country that it should not preclude other options that are available, for example, the local manufacturing of drugs. Of course, we need to make sure that we work on a vaccine and that we also improve the prevention components so that people in the first place do not get infected. ELIZABETH FARNSWORTH: Thank you all very much.