The High Cost of AIDS Drugs in Africa

By Julia M. Hernandez, J.D. candidate 2003

UNAIDS estimates that as of December 2000, approximately 36.1 million people in the world live with HIV and AIDS.  About 25.3 million of those people are adults and children in Sub-Saharan Africa.  Fewer than 25,000 of the afflicted people in Africa actually receive treatment.  To a large extent, the reason for this is a lack of access to treatment and the high cost of medications.  UNAIDS estimates that the cost of treatment and care for those Africans infected and their families would be approximately US $1.5 billion.  Several billion more dollars would be required for antiretroviral therapy and prevention.

This worldwide epidemic has prompted numerous calls for help from the pharmaceutical manufacturers in the form of lower prices, donations of drugs, and expanded access to treatments for developing countries such as those in Sub-Saharan Africa.  For example, Nelson Mandela recently criticized makers of AIDS drugs for charging exorbitant prices when most people cannot afford them. Brendan Boyle, Mandela Slams Drug Makers, Chides South African Government, http://dailynews.yahoo.com/h/nm/20010415/wl/health_safrica_dc_1.html. He also criticized the South African government for failing to adequately negotiate with drug companies for affordable prices.

On the other side, pharmaceutical manufacturers claim that they need to charge high prices for their drugs to offset the cost of research and development.  The Pharmaceutical Research and Manufacturers of America estimates that drug companies spent over $20 billion dollars on research in 1999.  Rosemary Sweeney, Comment, The U.S. Push for Worldwide Patent Protection for Drugs Meets the AIDS Crisis in Thailand: A Devastating Collision, 9 PAC. RIM L. & POL’Y J. 445, 468 (2000).  The production and sale of generic versions of AIDS drugs at lower prices affect the pharmaceutical manufacturers’ ability to fund further research because the sales of their versions decrease.  Pharmaceutical companies estimate that they lose between one and five billion dollars each year due to unauthorized copying of their drugs. Id. at 450.  Pharmaceutical companies also claim that parallel importing decreases sales of their drugs and cuts the money that would normally go to research and development.  Parallel importing is when people buy drugs in countries where prices are lower, and resell them in direct competition with the pharmaceutical companies in developed countries.

In an effort to pressure developing countries to implement stricter patent protection laws, several drug companies recently filed a lawsuit against the South African government.  They subsequently dropped the lawsuit.  A representative of South Africa’s Pharmaceutical Manufacturers Association, Mirryena Deeb, claimed that the companies dropped the suit because the South African government agreed to consult the companies as legislators write the regulations to implement the law. Steven Swindells, Drug Firms Drop S.African AIDS Case, http://dailynews.yahoo.com/h/nm/20010419/wl/safrica_drugs_dc_2.html .  AIDS activists and human rights groups strongly criticized the lawsuit brought by pharmaceutical companies.  The activists claimed that the pharmaceuticals companies’ main interest lay in profits while millions of people suffer and die for lack of resources and treatments which the pharmaceutical companies could help provide.

The United States has acted as an advocate for pharmaceutical companies in the past by threatening trade sanctions on developing countries that do not honor drug patents.  Now, the United States claims that it will lessen the pressure on developing countries as long as they adhere to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) which most nations agreed to in 1992.  Countries that signed the agreement promised to enforce drug patents.

In line with the spirit of this promise, the United States, under the George W. Bush administration, donated $200 million to a UNAIDS global trust fund established to combat AIDS.  The United States was the first country to contribute to this fund.  AIDS activists criticized the size of the United States donation deeming it too small as compared to the need.  Tony Karon, Why Bush’s $200-Million AIDS Donation May Mean Nothing (05/15/01) available at http://www.time.com/time/world/article/0,8599,109907,00.html.  However, UNAIDS remains optimistic that the initiative of the US may spur contributions from other countries as well as private donations to total $1 billion dollars by the end of this year.  John Donnelly, AIDS Fund Giving Lags as Nations, Agencies Wrangle (05/24/01) available at http://www.boston.com/dailyglobe2/144/nation/.  Unfortunately, Africans suffering from AIDS need $7-10 billion yearly for treatment.  The future and efficacy of this fund remains in question.  Perhaps the United Nations Special Session on HIV and AIDS scheduled for June 25-27th in New York will spell out the logistics of this fund.

United States support of the global trust fund and the abandonment of the lawsuit against South Africa by pharmaceutical companies may signal a step towards lower drug prices and greater availability of AIDS drugs to developing countries.  Billions of lives may depend on the development of the UNAIDS fund as a source of funding for AIDS therapy and prevention programs in developing countries.  Pricing and patent policies of pharmaceutical companies will also play an important role in the future of the AIDS epidemic in Africa and other developing countries.

07/23/01