Kaiser Daily HIV/AIDS Report - Wed, 11 Apr 2001
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NPR's 'Morning Edition' Features Discussion on Access to Anti-AIDS
Drugs
NPR's "Morning Edition" today features a discussion on the issues
surrounding access to anti-AIDS drugs in Africa and other poor na-
tions. NPR's Richard Harris points out that the majority of people in
African nations are unable to afford medicines for a variety of
treatable diseases, such as malaria, and that activists in the United
States and elsewhere have not pushed extensively for cheaper prices
for these medications. Harvard University economics professor Michael
Kremer said that most Americans do not suffer from malaria and other
diseases common in Africa; therefore, awareness of these problems has
not been acute. However, he noted, since HIV/AIDS is a problem in the
United States, people here can identify with its detrimental impact,
and the same activist community that pushed for better HIV treatments
in the United States has now turned its focus to Africa. On the topic
of the WHO/WTO summit taking place this week in Norway, Daniel Calla-
han, director of international programs at the Hastings Center, an
independent research institute, said that discounts by pharmaceutical
companies are not enough to get drugs to all who need them. "If there
were a lot more people putting money into [fighting HIV] besides the
drug companies ... maybe we can begin to make a dent in this thing,"
he said. Harris concluded that the summit "isn't likely to result in
a firm commitment to solutions, but at least the parties are all sit-
ting down" (Edwards, "Morning Edition," NPR, 4/10). An audio file of
the full conversation will be available later today at:
http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=04/10/2001&PrgID=3
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Slate.com Features Debate on Pharmaceutical Drug Pricing for AIDS
Merrill Goozner, former chief economics correspondent for the Chicago
Tribune and professor of journalism at New York University, and An-
drew Sullivan, senior editor at the New Republic and daily writer for
andrewsullivan.com, this week are engaged in a Slate.com "dialogue"
on whether the high drug prices charged by the pharmaceutical indus-
try are necessary to protect innovation. Slate.com's "dialogue" sec-
tion is a regular section featuring debates between experts in vari-
ous areas. Goozner writes, "The campaign to make lifesaving AIDS
medicine available to the world's poor has chalked up major victories
in recent months." The media "debunk[ed] the drug industry's logic on
each of its key objections" to making affordable drugs more widely
available, and the industry's recent offers to discount anti-AIDS
drugs for developing countries "represented a tacit admission that
many of their arguments simply couldn't withstand scrutiny," he adds.
To "outline the state of the debate," Goozner says that the "first
and foremost" issue is price. Drug firms are charging medicines at
"exorbitant levels" by claiming they need investment return on mil-
lions spent during drug research and development. But as government
agencies like the NIH and not-for-profit institutions provide sig-
nificant drug research funding for AIDS and other disease, as well as
perform considerable portions of that research, "industry claims that
it costs over $500 million to bring a single drug to market are pre-
posterous." He adds, "Despite an AIDS drug market that has grown to
more than $7 billion a year in the United States alone, this imbal-
ance in effort continues. The [NIH] will spend $2.3 billion in AIDS-
related research next year." Further, he estimates that more than 40%
of R&D is spent on the production of "copycat" drugs for conditions
such as heartburn. Goozner adds, "[T]he development of anti-AIDS
drugs, like the public awareness campaigns that have largely stopped
the spread of AIDS in the developed world, should be seen for what
they are: a triumph of public health -- not private sector R&D."
The Other Side
Sullivan responds to Goozner's argument that "achievement shouldn't
be rewarded in the marketplace because the government actually did
most of the research for our pharmaceutical revolution" by noting
that "over 70% of pharmaceutical research and development comes from
the private sector -- and that proportion is growing. [Pharmaceutical
companies] take huge risks and occasionally reap the rewards." Drug
prices have not been pushed up beyond inflation because as consumer
prices rose 19% between 1993 and 1999, drug prices only increased
18.1%. Adjusting for R&D shows drug company profit margins at 9%,
"still a healthy margin" but needed "to offset the epic risks that
drug research entails. ... One of the reasons for patents and profits
on successful drugs is to balance out the huge losses and bankrupt-
cies that occur every day in this industry for the failed drugs,"
Sullivan writes. Hesitancy to provide discounted drugs to poorer na-
tions stems from the concern that Americans will demand to receive
the "same rock-bottom prices -- thereby eviscerating the very incen-
tives that made the drugs possible in the first place." Sullivan con-
cludes, "Far from being overpriced, the current prices for new drugs
are actually massively underpriced when you factor in the benefits"
of saving hospitalization costs. "The bottom line is that if you fac-
tor in increased longevity, productivity, and declines in hospitali-
zation, every new, expensive drug on the market saves far, far more
than it costs." To weigh in on the drug pricing debate, enter:
http://slate.msn.com/code/thefray/thefray.asp?post=1&t=dialogues
into your Web browser (Slate.com, 4/9).
--
Cecilia Snyder
mailto:csnyder@ccmc.org
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