Profit Margins and Mortality Rates

By Joanne Mariner, FindLaw.com. Posted November 26, 2003.

Here are some numbers to consider: 14 million, 35.9 billion, and 1.

The first is an estimate of the number of people who will die of AIDS and other treatable diseases over the course of the coming year, most of them in the poor countries of the developing world.

The second figure represents the combined 2002 profits, in dollars, of the 10 biggest pharmaceutical companies listed in Fortune magazine's annual review of America's largest businesses.

The third figure corresponds to the number of countries that, last week, voted against a U.N. resolution on access to drugs in global epidemics such as HIV/AIDS, tuberculosis and malaria. The resolution emphasized that the failure to deliver life-saving drugs to millions of people who are living with HIV/AIDS constitutes a global health emergency. One hundred sixty seven countries voted in favor of the resolution. The single vote against it was cast by the United States.

Sadly, these numbers are closely related. To protect their exorbitant profits, drug companies are fighting the production and distribution of cheap generic versions of patented drugs. Unable to afford the medicines that could save their lives, millions of poor people around the world die of treatable illnesses every year.

And, as the recent U.N. vote exemplifies, the drug companies have a reliable ally. Not only does the U.S. government use its considerable economic power to bully developing countries into restricting access to low-cost generics, it continues to try to change the international rules that allow such generics to be made in the first place.

Unnecessary Deaths

In their vulnerability to treatable diseases, the rich and the poor live in different worlds. Every year, millions of people in developing countries die of illnesses that they would likely have survived had they lived in Europe or the United States. A key factor in the enormous global disparities in death rates is poor peoples' lack of access to needed drugs.

Consider the case of HIV/AIDS. An estimated 42 million people are living with HIV/AIDS worldwide, 39 million of them in the developing world. India alone has at least 4.5 million people who are HIV-positive, and possibly many more.

In the United States and other rich countries, since the advent of anti-retroviral drug treatment, AIDS has become a manageable disease, not a death sentence. But for the millions living with HIV in the developing world, prospects for effective treatment remain dim.

At present, only a tiny minority of HIV-positive people in poor countries have access to anti-retroviral drugs. For the others, as well as some marginalized populations in rich countries, the cost of treatment remains prohibitively high.

Patent Protections and Profits

Nothing in the ingredients of anti-retroviral drug treatment makes it inherently expensive. Indeed, when a combination of generic drugs is used, treatment costs are about $600 per patient per year.

But companies that profit from drug sales prefer to keep drug costs artificially high. In the United States, the cost of anti-retroviral drugs is generally in the range of $10,000 to $15,000 per patient annually, and people with advanced cases of AIDS may pay far more. Relying on international patent protections, drug companies have been trying to maintain high drug prices globally by restricting the production and distribution of low-cost generic substitutes.

Global patent protections are tied to global rules on trade, specifically, the rules of the World Trade Organization. Although the WTO's strict intellectual property rules carve out exceptions for national health emergencies, they still go a long way toward limiting poor peoples' access to life-saving medicines.

And as Oxfam has shown in a paper titled "Patent Injustice," the problem extends beyond HIV/AIDS. Brand-name drugs for a number of major diseases cost several times more than their generic equivalents. The increasing drug resistance of endemic illnesses such as tuberculosis and malaria -- and the resulting need for access to new drugs -- means that the WTO's monopolistic pricing rules threaten many millions of the world's poor.

The Brazil Model

Despite the WTO's restrictions, some developing countries have made important steps in meeting their peoples' drug treatment needs.

In Brazil, notably, extensive prevention efforts combined with state-funded anti-retroviral treatment have reduced AIDS-related deaths by more than half since 1996. The cornerstone of Brazil's treatment program has been the local production of generic equivalents of brand-name anti-retroviral drugs, which has driven down the cost of treatment enormously.

But Brazil's successes, and those of countries like it, have been hard fought. The WTO rules have been a battleground on which Brazil and others have fought a series of high-stakes skirmishes with drug companies.

Backed by one of the world's richest and most politically influential industrial lobbies, the drug companies have enlisted the U.S. government as a loyal ally in the campaign against generics. Through the office of the U.S. Trade Representative, the United States has fought to advance the interests of the pharmaceutical industry, pressuring other governments on a bilateral basis and threatening to seek trade sanctions via the WTO.

The U.S. vote last Wednesday in the Third Committee of the U.N. General Assembly was not too surprising, given this record. Still, it was dismaying to find the United States willing to stand alone against 167 other countries -- as if it were a matter of principle to oppose a resolution calling for widespread public access to the drugs necessary to combat global epidemics such as HIV/AIDS, tuberculosis and malaria.

Future Trade Agreements

The U.N. vote is, moreover, a worrisome portent for the future. At present, the U.S. Trade Representative is negotiating a number of bilateral and multilateral trade agreements, including the proposed Free Trade Area of the Americas. Given U.S. advocacy on behalf of pharmaceutical companies‚ interests, these agreements are likely to go beyond the WTO's rules in protecting drug patents.

President George Bush, in a number of his most high-profile speeches, has expressed a rhetorical determination to assist in the global fight against HIV/AIDS. By allowing U.S. officials to lead the world in protecting the commercial interests of drug companies, he betrays his public commitment to this cause.

Joanne Mariner is a New York-based human rights attorney.

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