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Background: Price of AIDS

A background report on the economic issues surrounding AIDS drugs.

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  • SUSAN DENTZER:

    An estimated 36 million people worldwide are infected with HIV, the virus that causes AIDS. In recent years, new antiviral drugs have prolonged lives and slashed death rates of AIDS sufferers in many western countries. But prices for these medications can range from $10,000 to $15,000 a year for combinations of drugs, called cocktails. That puts them out of reach of much of the developing world, where AIDS crisis has hit hardest. Debrewerk Zewdie is the World Bank's top official monitoring the AIDS pandemic.

  • DEBREWORK ZEWDIE:

    The health expenditure for most of these countries is $12 per year, per person. To expect these countries to provide the resources for anti- retroviral drugs would not be realistic.

  • SUSAN DENTZER:

    As a result, in sub-Saharan Africa, where an estimated 24 million are infected with HIV, fewer than one in 1,000 are getting the advanced drug therapy. That means that having AIDS there is a sentence to die a long, slow, painful death. At the core of the problem is the fact that, like many drugs, antiviral medications are protected by patents. Under a global agreement, most countries now award such patent protection for 20 years. That means drug manufacturers have a number of years to set prices where they want, to recoup development costs, and earn profits. Last year five major pharmaceutical companies that hold patents on antiviral drugs agreed to sell them at discounts to countries hit hard by the AIDS pandemic. But so far only three countries — Senegal, Uganda and Rwanda — have negotiated arrangements with the manufacturers. They reportedly obtain drugs at a discounted price of about $1,000 per person, per year.

  • DEBREWORK ZEWDIE:

    One thing that works for Senegal is that the prevalence rate is still very low, it's still around 1 percent. And the people that require anti-retroviral drugs are very few in number. But if you take countries that are hit hardest by this epidemic where prevalence rates are 10 percent, 20 percent, even at $1,000 per person, per year, these are costs that most of these countries will never be able to support.

  • SUSAN DENTZER:

    As a result, some countries and companies have tried to chip away at patent protections to get drugs to millions in need. Recently Cipla Ltd., a drug company based in India, offered to produce a combination of antiviral drugs that are close copies of patented products. It said it would sell those drugs to the international assistance group Doctors Without Borders for just $350 per patient, per year. Cipla has offered to pay the companies that hold patents to the drugs a small royalty — equal to 5 percent of sales — for a license to produce them. At least two companies are reportedly contemplating Cipla's offer. Brazil, where an estimated half million people are infected with HIV, has taken a different tack. In 1998, the government began making copies of antiviral drugs under a law that declared patents issued before May 1997 null and void in Brazil. Now it is also threatening to produce at least two other antiviral drugs patented after 1997. With the patent holders and the U.S. trade representative fighting the plan, the dispute is now headed for the World Trade Organization. International officials, like Zewdie, are calling for unprecedented efforts to get antiviral drugs and other treatments to the hardest-hit countries.

  • DEBREWORK ZEWDIE:

    I think this is almost a defining moment in history where each entity in this game has to come together and give in and compromise.

  • SUSAN DENTZER:

    If not, these officials say the costs of battling the pandemic will only balloon, as the death toll and infection rates continue to rise in much of the world.

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