The poor need medicines, but the drug industry is not a global charity

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The Independent Online

At first humanitarian glance, the merits of the case which opened yesterday in Pretoria could not be clearer. The defendant is South Africa, 10 per cent of its population infected by the HIV virus, needing billions of dollars it does not have to pay world-market prices for the drugs required to treat this modern plague. And the plaintiffs? None other than the big drug companies, dripping billions of dollars in profits, refusing to permit the cheap production of their drugs which could save thousands of lives.

At first humanitarian glance, the merits of the case which opened yesterday in Pretoria could not be clearer. The defendant is South Africa, 10 per cent of its population infected by the HIV virus, needing billions of dollars it does not have to pay world-market prices for the drugs required to treat this modern plague. And the plaintiffs? None other than the big drug companies, dripping billions of dollars in profits, refusing to permit the cheap production of their drugs which could save thousands of lives.

As one Oxfam official fulminates, "At the end of the seven days of this trial, 5,000 poor South Africans will be dead who were alive at the beginning of it. In the same time, the top five drug companies will have sold $1.3bn of medicines." So there, with the help of some misleading statistics, you have it: wicked multinational corporations putting bloated First World profits ahead of Third World lives. Fine, emotive stuff - except it is simplification verging on distortion.

We would be the last to deny the desperate need to get vital drugs to those who need them, at prices they can afford. But the drug industry is not, and so long as it operates in a capitalist system cannot be, a global charity. Of course it must generate profits for shareholders; but no less important is the generation of revenue to recoup its huge research and development costs.

Producing drugs is a gamble; unless they are allowed to make money on successful drugs, say the companies, they will have no incentive to develop new ones; for every Zantac, Prozac or Viagra, there are a hundred expensively researched ventures which come to nothing.

Usually, this does not greatly matter. The medications above were invented to improve the quality of life in rich countries rather than save lives in poor ones, however grudgingly we pay the going rate. The problem arises when a drug becomes a public-health necessity, not only here but in the poorer world, too. And so to Aids in southern Africa and the courtroom in Pretoria. The companies are not seeking to bleed South Africa dry, but to protect patent rights on their products.

South Africa's case may be less watertight than it seems. At least two immediate questions need answers: is it true that the companies have offered HIV drugs to the country at generic prices, but have received no answer? And second, why has South Africa not invoked its emergency right under World Trade Organisation rules to compulsory licensing - to give a drug patent to another company to produce, irrespective of whether the original patent holder agrees? Health emergencies come no bigger than the sub-Saharan Aids crisis.

But the current dispute raises more basic issues about the international drugs business. Might we not, for instance, consider speeding drug-approval regimes, which would cut research costs and get products to market sooner and more cheaply, albeit at a greater risk? More obviously, bilateral aid programmes must increase, as must Western government funding of research, particularly into tropical medicines. This, too, might help nudge prices lower - but not low enough to bring them within the reach of poorer Third World countries.

Most important, it cannot be beyond the wit of man to devise a workable, policeable system of differential pricing. Purists will insist that two-tier markets are inherently leaky, that cheap drugs meant for the Third World will be channelled back to the First World by unscrupulous profiteers. Of course there will be abuse. But a measure of cheating is a price worth paying for a compromise protecting both the legitimate interests of the drug companies, and the lives of African generations yet unborn.

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