Cheaper drugs are as important as improved health infrastructure

Thompson Ayodele is of course right to emphasize in his recent opinion piece (“Africa’s Failing Infrastructure Renders Compulsory Licensing Pointless,” April 28) the urgent necessity of improving Africa’s healthcare infrastructure.

Thompson Ayodele is of course right to emphasize in his recent opinion piece (“Africa’s Failing Infrastructure Renders Compulsory Licensing Pointless,” April 28) the urgent necessity of improving Africa’s healthcare infrastructure.

Unfortunately, invoking the infrastructure issue is for Mr. Ayodele a technique to disparage current debates at the World Health Organization (WHO) over the means to improve pharmaceutical research and development (R&D) and to lower drug prices.

Mr. Ayodele is completely mistaken in suggesting that the need to strengthen health  systems is a reason not to pay attention to the price of drugs. There is no trade off  between the two.

Poor people in Africa need more investment in healthcare and better functioning health systems. But they also need access to life-saving medicines, and new R&D directed to the priority health needs of the continent.

The WHO discussions aim to identify means to advance both innovation and access to the fruits of innovation. The idea is to create incentives for the development of new medicines to meet priority health needs in developing countries, and to make those products available on an affordable basis.

Mr. Ayodele may have an ideological commitment to the patent monopoly system for R&D, but there is no serious argument that it is failing developing countries - especially the world’s poorest countries.

Big Pharma charges far more for its patent monopoly-protected medicines than patients or governments in Africa can afford. At thousands of dollars a year per person - and sometimes more than $100,000 per year - drug prices are gouging consumers in rich countries.

These prices are completely out of reach for all but the elite in developing nations. Generic competition is the key mechanism to lowering prices and making drugs affordable in Africa and other developing countries.

The case of HIV/AIDS drugs is illustrative. Ten years ago, before generic competition, brand-name companies charged roughly the same price for lifesaving HIV/AIDS drugs in Africa as they did in rich countries - $10,000 a year per person, or more. An HIV diagnosis was a death sentence.

Today, the price is as low as $100 per person - a price decline that leveraged a huge increase in donor money that otherwise would not have been made available. The severe problems with healthcare infrastructure notwithstanding, two million people living with HIV/AIDS in Africa are today receiving treatment.

Much more needs to be done - and improving infrastructure is a top priority. Only about 30 percent of those in need are receiving treatment. But without the price reductions brought about by generic competition, almost all of the 2 million people in Africa now receiving treatment would be dead or would die soon.

Rather than criticizing countries like Thailand that are issuing lawful compulsory licenses - government authorizations of generic competition for products that remain on patent - Mr. Ayodele should be pointing to them as an example to be followed.

They are, after all, promoting market competition and lowering price. In Thailand’s case, it is acquiring generic versions of a heart disease drug for 1/70th the price charged by the brand-name company.

Lower prices from compulsory licenses have enabled Thailand to triple the number of people receiving important medical treatments. But African and other developing countries need more than cheaper drugs.

They need medical R&D for priority health problems that brand-name drug companies have no incentive to address.
Patents are not worth much if they offer monopolies on sales to a population that - no matter how large - has little buying power.

Developing countries comprise 80 percent of the world’s population but amount to only 13 percent of the global market for medical products. (Africa represents less than 2 percent of the global pharmaceutical market.)

As a result, there is little corporate sector R&D devoted to the needs of developing countries. A review by Doctors Without Borders found that of 1,556 new drugs placed on the market between 1975 and 2004, only 21 were for “neglected diseases” - diseases endemic to developing countries.

At the World Health Organization negotiations, debate is underway about different arrangements to spur private sector R&D - ideas that would pay drug companies, but not lead to high drug prices. One exciting idea revolves around prize funds, with drug innovators paid large cash awards, but all drugs being made available, immediately, as low-priced generics.

Ideologues and those who would prioritize the narrow commercial interests of Big Pharma over public health objectives have reason to reflexively defend a patent monopoly-based R&D system that is not working for the developing world.

For everyone else, the rising interest in new institutional arrangements to promote the complementary public health objectives of innovation and access is something to embrace.

Robert Weissman is director of Essential Action, a public health advocacy and corporate accountability group based in Washington, DC. 

Contact: rob@essential.org

 

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