CORPORATE FOCUS: Once a Big Drug Company, Always a Big Drug Company

One of the perquisites of power is that the powerful can always command a fresh start. Past crimes and misdemeanors, and even current misdeeds, are not held against them.

Consider the case of the pharmaceutical industry and the issue of access to HIV/AIDS and other essential medicines.

The rich countries are now, belatedly, gearing up to commit some substantial monies to address HIV/AIDS in Africa and elsewhere in the developing world. The brand-name pharmaceutical companies are jockeying for a central role in determining how those monies are spent. And, unless sufficient public opposition emerges, they are likely to secure it.

There is now no serious dispute that the brand-name pharmaceutical companies have worked overtime to deny poor countries access to lifesaving medicines.

The industry insistence in maintaining its lawsuit challenging South Africa's Medicines Act helped forge a broad, worldwide consensus -- from the New York Times to the European Parliament -- against the industry's role in interfering with poor countries' efforts to promote access to essential medicines. International condemnation forced the industry to back down in the suit, but the South Africa case was only one of many instances where the industry has played a pernicious role. Big Pharma's obsession has been to block the introduction of generic competition -- which has the potential to bring drug prices down by 95 percent or more -- and it has employed misleading propaganda campaigns, threats of litigation, promises of trade sanctions, and new trade agreements to advance its aims.

Against this backdrop comes a set of proposals for a global AIDS fund, or a global tropical disease fund. In late June, the United Nations will hold a special session on HIV/AIDS. Then the elite rich countries, grouped together in the G8, will meet in Genoa, Italy, in July. There is widespread expectation that the rich countries will agree to a framework for a new fund, and make preliminary dollar commitments. UN Secretary General Kofi Annan has requested contributions of $7 billion to $10 billion per year. The United States is expected to announce a $200 million commitment shortly.

How the fund will be governed and operated remains very unclear.

One possible starting point is a new, U.S.-initiated fund, housed at the World Bank. The World Bank AIDS Trust Fund was created by Congressional action last year, and the United States has allocated $20 million for the fund. This fund was intended to galvanize international donations, but they have not materialized, and some thought the fund would never get off the ground. However, Kofi Annan's proposal for a global fund sounded very similar to the World Bank AIDS Trust Fund, leading some to think the World Bank entity would be revamped and become the big global fund.

That makes governance of the fund very important. The U.S. Treasury Department is in charge of establishing the charter for the World Bank AIDS Trust Fund. The Treasury Department's proposal envisions a governing board made up of donors, with some participation by recipient countries. "Donors" would include not just governments, but private parties -- meaning not just private foundations, but private corporations É including the drug companies. Under the Treasury Department proposal, for $5 million contributions, the drug companies would be able to buy themselves seats on the Trust Fund's governing board.

This is a morally outrageous proposal. There are many parties to blame for the horrible toll taken by the AIDS pandemic in poor countries (with as many as one in three adults now HIV-positive in some African countries, and virtually all of the HIV-positive people certain to die from AIDS unless treatment costs are radically reduced), but the drug companies are hugely culpable. That they would be permitted a key role in directing the world's belated response to the crisis dishonors the memories of the millions who have died preventable deaths from HIV/AIDS.

Underlying the moral argument are very practical considerations. Big Pharma participation on the governing body of new global fund would create an irresolvable, structural conflict of interest.

For example, a crucial decision for the new fund will be whether it buys drugs at best world prices, from multiple sources, including generics. The brand-name companies are intent on excluding generics, and the brand-name companies certainly should not have a role in the fund's decision-making on this issue.

Suggestions that the brand-name companies could simply recuse themselves from such issues offer no solution. The brand-name companies should not be positioned to influence fellow board members. And lots of decisions the board will make -- from matters relating to the mechanisms to deliver drugs, drug registration rules, preferred drug regimens, and much more -- will involve issues where drug company conflicts will be pervasive, but may not be recognized.

If Big Pharma wants to redeem itself and be "part of the solution" to the AIDS pandemic, there is plenty it can do, starting with issuing licenses for its HIV/AIDS drugs to the World Health Organization, which could then contract with generic makers to provide cheap drugs for distribution in poor countries. But putting the industry in charge, or partially in charge, of the primary global response to HIV/AIDS -- while the brand-name companies continue to place enormous obstacles in the way of the generic competition that could make AIDS drugs far more affordable and save millions of lives -- would be unconscionable.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and co-director of Essential Action, a corporate accountability group. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).


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