Kaiser Daily HIV/AIDS Report - Fri, 6 Apr 2001
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* US Senate Approves Additional $700 Million Over Two Years to Fight
HIV/AIDS in Developing Nations
* IAVI, U.S. Biotech Firms, Indian Manufacturers Collaborate to De-
velop AIDS Vaccine
* Annan Gets Continued Price-Reduction 'Assurances' from Six Drug
Makers at 'Secret' Meeting in Amsterdam
* Editorials Weigh in on Cheaper Drug Access in Developing World
--
US Senate Approves Additional $700 Million Over Two Years to Fight
HIV/AIDS in Developing Nations
The Senate passed by voice vote yesterday an amendment to the budget
proposal that would allocate an additional $700 million over the next
two years to fight HIV/AIDS in developing nations, the Philadelphia
Inquirer reports. The measure would boost total U.S. funding for in-
ternational HIV/AIDS efforts to $1.1 billion by 2003, with the "bulk"
of the new funding going to countries in sub-Saharan Africa that have
"developed clear plans to combat the epidemic" (Collins/Warner,
Philadelphia Inquirer, 4/6). The amendment calls for increases of
$200 million in fiscal year 2002 and $500 million in FY 2003, with
the new funding to be taken from the budget surplus. This year's
budget for international AIDS initiatives is about $460 million, but
the House has made "[s]imilar calls for doubling AIDS spending," the
Washington Post reports (DeYoung, Washington Post, 4/6). A spokesper-
son from the State Department declined to comment on the funding in-
crease, but said that the Bush administration plans to "propose an
increase in spending on the global epidemic in its 2002 budget," with
details to be disclosed later this month (Philadelphia Inquirer,
4/6). Secretary of State Colin Powell has asked for a 10% increase in
the department's global AIDS funding (Washington Post, 4/6).
International Fund
The amendment, sponsored by Sen. Bill Frist (R-Tenn.), would place
foreign aid for HIV/AIDS into an "international fund," which would
also contain contributions from other developed nations, private
foundations and "possibly even private corporations," the Inquirer
reports. The money in the fund, which would be overseen by interna-
tional monitors, would go toward the bulk purchasing of antiretrovi-
ral drugs "at greatly discounted prices." The proposal "does not
specify" how much of the new funding will go toward purchasing AIDS
drugs, but Frist added that "drugs alone are not enough," and called
for the expansion of HIV prevention programs and a greater number of
medical clinics and staff. Frist, chair of the Senate Foreign Rela-
tions subcommittee on African affairs, said, "Americans have always
been among the first to tackle the most difficult challenges of the
times. We must do no less when confronted with perhaps the worst in-
ternational health crisis since the bubonic plague ravaged Europe 600
years ago." He added that community-based organizations in Africa are
likely to be the "linchpin of success" in fighting the epidemic. The
United States currently spends about $260 million annually to fight
HIV/AIDS in Africa (Philadelphia Inquirer, 4/6). The spending in-
crease will bring the country "a considerable distance toward meeting
its part" of the United Nations' recommendation of $3 billion to $5
billion from wealthy nations to fight the spread of the disease in
Africa (Washington Post, 4/6). Harvard economist Jeffrey Sachs, how-
ever, said that the proposed spending increases are "not enough." On
Wednesday, Sachs outlined a plan, supported by United Nations agen-
cies, that calls for the United States to provide $1.5 billion per
year "immediately," with that contribution rising to $3.3 billion per
year over three years (Philadelphia Inquirer, 4/6).
--
IAVI, U.S. Biotech Firms, Indian Manufacturers Collaborate to Develop
AIDS Vaccine
U.S. and Indian researchers are "embarking on a bold experiment" to
determine if "reasonably priced AIDS vaccines" may be tested and
manufactured in developing countries without violating patents from
companies in developed nations, the Wall Street Journal reports. The
International AIDS Vaccine Initiative is negotiating a deal to permit
Serum Institute of India Ltd. to manufacture a vaccine using patented
vaccine-making technology developed by U.S. biotech firm Therion Bio-
logics Inc. "free of charge." At the same time, U.S. biotech company
Chiron Corp. is "scouting" for an Indian partner to assist with the
funding and development of an AIDS vaccine that is close to human
trials. Chiron may contract a $30 million technology-transfer fee
with either Shantha Biotechnology or Biological Events Ltd. to help
fund Chiron's initial vaccine research costs.
Avoiding a 'Battle'
IAVI President Seth Berkley is hoping for an AIDS vaccine to be si-
multaneously introduced in rich and poor countries, an unprecedented
move. "By investing in U.S. companies, and acting as a broker between
them and developing-world companies, IAVI is trying to avoid some of
the bruising battles over prices and patents that have enveloped
AIDS-treatment drugs recently," the Wall Street Journal says. For In-
dia, working with the United States on AIDS research may help "boost"
its goal of becoming a biotechnology power, and provide a way to stop
a disease that has infected 3.7 million Indians. U.S. biotech compa-
nies' ability to combine research efforts with those in India is
beneficial because vaccine research and production costs are lower,
and the country is a "fertile ground" for human clinical trials, as
the disease is rapidly spreading. However, researchers face a "sensi-
tive political issue" with human testing in India, and there is no
guarantee that the vaccines will work or be more effective than those
produced by other firms.
Protecting Technology
The Wall Street Journal reports that "protecting a technology while
spreading it isn't easy," as it can "leak out" to other manufacturers
or be applied to make other vaccines. But Indian officials and vac-
cine makers are aiming to convince foreign companies that they can be
trusted with the use of patented technologies, as long as the uses
are restricted. South Africa is also seeking an intellectual property
agreement with Chiron to grant it the right to make the vaccine for
southern Africa. For firms that are hesitant to transfer technology
for security concerns, IAVI has formed a "social venture capital"
fund that invests research and development funds in three biotech
companies, including Therion, and two academic institutions. Rather
than asking for monetary returns, IAVI requires its partners to price
the vaccine at a low cost for poorer countries while no limit is set
on prices for richer countries. IAVI retains the right to solicit
bids from other manufacturers in developing nations "to put teeth in
the agreement" (Schoofs/Pearl, Wall Street Journal, 4/6).
--
Annan Gets Continued Price-Reduction 'Assurances' from Six Drug Mak-
ers at 'Secret' Meeting in Amsterdam
U.N. Secretary-General Kofi Annan yesterday received "high-level as-
surances" from the chief executives of six of the world's "most pow-
erful" pharmaceutical firms that they would continue to "accelerate"
price reductions on AIDS medications for the developing world, the
Wall Street Journal reports. In return, the United Nations will not
take part in the "escalating crusade" against patent protection, the
Journal reports, calling this a "crucial concession." In a post-
meeting interview Annan said, "We affirmed to [the CEOs] that the in-
tellectual property regime is essential if companies are going to
have the incentive to do the research to produce effective medicines
for these diseases." Annan met for three hours yesterday with offi-
cials from Abbott Laboratories, Bristol-Myers Squibb, Boehringer
Ingelheim, Pfizer, Roche Holding and GlaxoSmithKline in Amsterdam on
"very short notice." Merck & Co. was "[n]otabl[y]" absent from the
meeting. Company executives had planned on attending but decided
against it on Wednesday night when lawyers warned them that "any talk
about specific pricing might be seen as price fixing" (Freedman, Wall
Street Journal, 4/6). The meeting was kept "secret" from reporters,
who were told a dinner with Dutch Queen Beatrix was the only commit-
ment on Annan's schedule (AP/Milwaukee Journal Sentinel, 4/6). World
Health Organization Director Gro Harlem Brundtland and UNAIDS Execu-
tive Director Dr. Peter Piot also took part in the meeting (UNAIDS
release, 4/5).
The Agreement
The pharmaceutical companies agreed to negotiate drug prices with the
50 "least-developed" countries as a group -- "abandoning the lengthy
process of cutting deals for AIDS drugs with each country individu-
ally," a process criticized as "slow and unwieldy," the Journal re-
ports. In an agreement reached in May, five leading drug companies,
excluding Abbott and Pfizer, agreed to reduce prices in Africa by 80%
to 90% on a country-to-country basis. Yesterday's agreement will also
extend the price reductions to developing nations outside of Africa,
as well as to "certain private, non-governmental agencies and employ-
ers" (Wall Street Journal, 4/6). Upon his return from Amsterdam
Thursday night, Abbott CEO Miles White said, "We want to focus our
efforts on those areas where there is no health care or little access
to health care. [Annan] wanted to make sure we aren't limiting our-
selves to Africa. The fact is, we are not" (Japsen, Chicago Tribune,
4/6).
A 'Personal Priority'
According to the AP/Milwaukee Journal Sentinel, the meeting was a
"signal that Annan is deepening his personal involvement in combating
AIDS in poor countries, before an AIDS summit this summer in New
York." Fighting AIDS "has become my personal priority," Annan said
(AP/Milwaukee Journal Sentinel, 4/6). But even with yesterday's pro-
gress, Annan failed to "exact specific pricing concessions that he
had hoped for." One meeting participant said Annan wanted "more com-
mitments" on pricing, but "none of [the drug company representatives]
wanted to talk about that because they are all a little spooked, es-
pecially the American companies, about antitrust." Annan said he was
"satisfied" with yesterday's results and denied that "specific pric-
ing concessions" were on his agenda. He also said he will conduct
"periodi[c]" meetings with the drug company officials to "review
their progress" over the coming months (Wall Street Journal, 4/6).
The meeting came on the heels of the announcement Wednesday of a
"massive" anti-AIDS plan to be "spearheaded" by the United Nations
and WHO. Harvard economist Jeffrey Sachs unveiled the basics of the
multi-billion dollar plan Wednesday. The proposal will be presented
at the special meeting of the U.N. General Assembly on AIDS in June
(Farley, Los Angeles Times, 4/6).
--
Editorials Weigh in on Cheaper Drug Access in Developing World
The quest to improve access to cheaper AIDS drugs in sub-Saharan Af-
rica continues to prompt responses from news sources across the
United States. The following is a sample:
* Newsday:
"Credit the world's pharmaceutical industry for finally slashing
prices on anti-HIV drugs in southern Africa. True, it acted in part
to polish its image and to protect its patents, but never mind. If it
is willing to supply medicine at close to cost in impoverished na-
tions where the epidemic is rampant, then rich nations such as the
United States should be willing to keep paying retail prices -- which
help underwrite research and development work," a Newsday editorial
says. But even with drug discounts, "larger" problems for drug dis-
tribution remain. The editorial asks, "First, how can Africa afford
drugs supplied even at cost? Second, who will administer the highly
complicated regimens to ensure that they are used safely?" The edito-
rial points to Harvard economist Jeffrey Sachs' plan announced ear-
lier this week that calls for donor nations to supply about $1.1 bil-
lion per year to a global trust fund to purchase drugs for about one
million Africans at cost and then distribute them in monitored plans
throughout the region. Although this plan is not without flaws, "it
should at least ignite a global conversation on how best to stave off
a looming holocaust," the editorial concludes (Newsday, 4/6).
* MSNBC.com:
Dr. Arthur Caplan, director of the Center for Bioethics at the Uni-
versity of Pennsylvania, writes in an op-ed, "If drugs are credited
with transforming HIV from an almost certain death sentence to a
chronic, manageable disease in developed nations, isn't it our moral
duty to make sure that people in the poorest countries hardest hit by
the AIDS epidemic have access to these same medications?" Maybe not,
he says, explaining that drugs "don't get to the heart of the AIDS
epidemic." Caplan continues, "Simply throwing drugs at countries that
have no educational or public health programs will not slow the
spread of the disease. Unless drug distribution is linked to public
health campaigns, AIDS will not be stopped. And the high cost of
drugs means that eventually, the patience of drug companies and their
shareholders for giving the medications away will run out and the me-
dia will get bored with the story of people in far-away lands dying
in droves for want of medications." Instead, those dying of AIDS in
poor nations need a "solid health care infrastructure" where they can
receive "a clean bed to lie in and safe water to drink," in addition
to donated drugs (Caplan, MSNBC.com, 4/4).
* Washington Post:
Although encouraging announcements of large drug price cuts have been
issued by drug giants over the last several weeks, a Washington Post
editorial says that the "industry needs to move further." While some
firms have "yet to offer serious discounts," other announcements
"have proved less significant than they seemed," as drug makers at-
tached so many conditions to the discounts that they "made almost no
difference." The editorial continues, "Still, the industry is getting
to the point where responsibility for the next step will fall to the
Bush administration and other leading governments," for even at dis-
counted rates "the cost of AIDS drugs exceeds the ability of poor
countries to pay, and the cost of the clinics and training necessary
to deliver the drugs makes the challenge even tougher" (Washington
Post, 4/2).
--
The Kaiser Daily HIV/AIDS Report is published for kaisernetwork.org,
a free service of The Henry J. Kaiser Family Foundation, by National
Journal Group Inc. c 2001 by National Journal Group Inc. and Kaiser
Family Foundation. All rights reserved.
--
Cecilia Snyder
mailto:csnyder@ccmc.org
--
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