Kaiser Daily HIV/AIDS Report - Thu, 12 Apr 2001
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WHO/WTO Summit on Access to AIDS Drugs Recommends Differential Pric-
ing System
The World Health Organization/World Trade Organization three-day sum-
mit in Norway on AIDS drug access ended yesterday, with most confer-
ence participants agreeing that assigning medicines different prices
for different countries is a "feasible means" of making anti-AIDS
drugs more affordable for developing nations. This practice, called
differential pricing, was "widely" believed to be a good step toward
solving the problem, according to a WTO/WHO release. Adrian Otten,
director of the WTO's Intellectual Property Division, said, "Although
participants clearly approached the issues from different points of
view, there was broad recognition that differential pricing could
play an important role in ensuring access to existing drugs at af-
fordable prices, particularly in the poorest countries, while the
patent system would be allowed to continue to play its role in pro-
viding incentives for research and development into new drugs"
(WTO/WHO release, 4/11).
WHO Director-General Gro Harlem Brundtland noted that differential
pricing could lead to a 90% to 99% reduction in some drug prices
(Brundtland speech text, 4/11). However, the conference attendees
also agreed that policies must be put in place to ensure that cheaper
drugs for developing nations do not "fin[d] their way into rich coun-
try markets," as such safeguards are "[c]ritical" to the success of
the program. Some summit participants were "concerned" that the lower
prices for developing nations might be used as "reference points for
price controls in industrialized countries." Conference participants
agreed that a "wide mix of options" is needed to successfully imple-
ment a system of differential pricing, and they suggested a variety
of efforts, such as creating "the right conditions" so that the mar-
ket determines differential pricing; offering discounts that are ne-
gotiated bilaterally between companies and purchasers, which could
include bulk purchasing; issuing licenses agreed to voluntarily be-
tween patent owners and generic manufacturers; and implementing
global procurement and distribution systems.
Patent Laws and More Money
Although differential pricing was a central theme of the conference,
participants also discussed existing patent laws and the need for ad-
ditional international funding to fight HIV/AIDS in Africa.
Brundtland said, "We heard from the experts that much lower prices
can be achieved for the poorest countries. Equally important is
strengthening health systems, and, for the poorest countries, secur-
ing additional international financing." Participants "acknowledged"
that protecting intellectual property rights is "an important incen-
tive for research and development into new drugs," but some said that
other ways of encouraging R&D need to be explored as well. The con-
ference found that countries "need to be able to make use of the pub-
lic health safeguards built into the TRIPS agreement," including pro-
visions allowing compulsory licensing and parallel importing. Several
participants felt that competition from generic drug makers also
plays "an important role" in controlling prices and improving produc-
tion efficiency. In the area of international financing, the confer-
ence concluded that "significant amounts" of money from other coun-
tries is necessary to both purchase anti-AIDS drugs and help improve
existing health care systems so that the drugs can be distributed ef-
fectively (WTO/WHO release, 4/11). In her closing remarks, Brundtland
noted that three areas of discussion need further analysis, including
how to "handle" differential pricing for "middle income countries,"
which "represent a potential market for the diversion of cheaper
drugs." In addition, trade and health officials need "greater clar-
ity" on what is legal and what is illegal concerning parallel trade.
She concluded that for all of the possible solutions discussed at the
conference, "predictability and sustainability must remain the watch-
word" (Brundtland speech text, 4/11). The conclusions reached at the
conference will be discussed at WHO's Health Assembly next month and
at a special discussion on intellectual property rights and drug ac-
cess held by the WTO's Council on TRIPS (WTO/WHO release, 4/11).
AIDS Groups 'Disappointed' With Summit
AIDS groups have criticized the summit for failing to bring about
concrete promises from drug companies to lower the prices of AIDS
drugs for developing nations. In a joint statement, five non-
governmental organizations "expressed disappointment" over the con-
ference's outcome, stating, "No real progress was made to bring drug
prices for the essential drugs down." The summit's organizers, how-
ever, said that "no binding decisions had been planned" for the ses-
sion (Mellgren, Associated Press, 4/11). ACT UP/Paris criticized the
summit's purpose, stating that the meeting was based on the "absurd
and wrong hypothesis ... that the solution [to drug access] would lie
with the philanthropy of western laboratories." The group says that
the right to compulsory licensing outlined in the TRIPS agreement
"must not be undermined," but instead "must become the rule" (ACT
UP/Paris release, 4/6).
--
Cecilia Snyder
mailto:csnyder@ccmc.org
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