E-drug: NGO letter against loans proposal
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Yesterday, the US Export-Import Bank announced a new initiative to
make $1 billion in loans per year to African countries to purchase
HIV/AIDS drugs. Below follows a letter from the Health GAP coalition
denouncing the new plan.
Robert Weissman
Essential Information |
Internet: rob@essential.org
HEALTH GAP COALITION
http://www.durban2000march.org
e-mail: healthgap@durban2000march.org
JULY 20, 2000
Dear President Clinton:
We are writing from the Health GAP coalition to express our strong
opposition to the just-announced initiative from the Export-Import
Bank to provide financing to African countries for AIDS drugs
purchases.
Health GAP is a coalition of individuals and organizations, which
works to assure access to essential medicines by people with HIV/AIDS
in the
developing world. We have played a leading role in persuading the U.S.
government to abandon its opposition to countries undertaking policies --
known as compulsory licensing and parallel importing --- that could
dramatically reduce the price of pharmaceuticals and which comport
with country obligations under the World Trade Organization's
Trade-Related Aspects of Intellectual Property (TRIPS) Agreement.
We believe today's announcement by the Ex-Im Bank represents a
substantial and unacceptable step backwards from the administration's
commitment not to interfere with TRIPS-compliant compulsory licensing
and parallel importing, mocks the administration and G-7's purported
effort to provide debt relief to developing countries, and runs
directly counter to the consensus at the just-completed world AIDS
conference that the key to addressing the AIDS epidemic lies in
ensuring poor countries gain access to medicines, not more debt.
The Ex-Im Bank proposal, coming on the heels of the XIII International
AIDS Conference in South Africa, is a striking example of past and
current policies clearly and forcefully repudiated by the public
health, economic and political leaders in Durban last week. Peter
Piot, General Secretary of UNAIDS, announced that the most important
factor in increasing drug access is competition between generic and
patented drugs. He also cited heavy debt burden as a crucial
impediment to effective action against the escalating African and
Asian AIDS epidemics.
Additionally, the Durban conference brought together thousands of
people with AIDS and activists from all continents who have united
around calls for debt relief and full treatment access, including
access to quality generic medication.
We demand that the United States heed the growing consensus for
policies of economic aid based on public health imperatives and not
the
profit-driven agenda of pharmaceutical corporations. We will not allow
retrograde proposals such as this to pass without widespread condemnation.
We are writing to urge you to take the necessary steps to cancel the
Ex-Im Bank initiative.
While there has been a laudable increase in US contributions to
combat the global AIDS epidemic, we agree that billions, rather than
millions of
dollars a year are necessary to begin to significantly address this
challenge.
However, rather than offering spurious loans that perpetuate the debt
spiral, the United States must provide billions of dollars in grants for
comprehensive treatment access programs, based in sound public health
and scientific standards, including cost-effective bulk purchasing of
generic medication; TRIPS-compliant mechanisms for generic production
or parallel importation; and significant, structural-adjustment free
debt relief. Such grants must be administered and overseen by an
international public health organization, such as UNAIDS or WHO, not
by a financial institution.
We oppose the current initiative on three primary grounds.
1. A New Debt Burden for Africa
It makes no sense to burden African countries with loans, when existing
debt burdens are undermining their ability to prevent and treat
HIV/AIDS (and to address other diseases, and other critical needs)
and when the AIDS epidemic is itself already undermining their
economic capacity. The Ex-Im loans would be made at commercial rates,
meaning the debt burden would be very high.
The United States and the G-7, through their Cologne Initiative, are
supposedly seeking to relieve poor countries of their presently
unmanageable debt burdens. If the intent of the initiative is to be
taken seriously, (despite inappropriate structural adjustment conditions
and an insufficient scale of debt relief), there is no plausible rationale
for piling new commercial-rate loans on poor countries at the same time
some of their debts are being forgiven.
2. Treatment Money Should Not Be Used for Corporate Welfare
All indications are that the Ex-Im loans will be used to buy drugs from
U.S. companies at a discounted rate similar to that which may be offered
to the United Nations.
Since money is clearly an enormous constraint in providing HIV/AIDS
medication, funding for HIV/AIDS treatment must be well spent, and
only on medicines at the lowest prices achievable. As reported, the
industry offer to the UN does not come close to meeting this standard.
Although there has been no distinct confirmation of the discount amounts
since the non-specific announcements from five pharmaceutical
companies in May, many published reports suggest the UN discounts
will be in the 80-85 percent range. Such price levels, which we
believe are far above production and distribution costs, will enable
the pharmaceutical companies to continue to profiteer from drug
sales, yet still keep treatment unaffordable for the vast majority of
people living with HIV.
Several well-researched studies, including a recent report from
Medicins Sans Frontiers (Doctors Without Borders), have shown that
the cost of HIV/AIDS medicines could decline an additional 90 percent
from the estimated drug industry discounts, so that the cost of
combination
HIV/AIDS drug therapies would be on the order of $200 per person per year.
3. No U.S. Government Initiative Should Interfere with African Efforts to
Undertake Compulsory Licensing and Parallel Importing
Linking the U.S. financing to purchases of U.S. or Western brand-name
drugs appears to be a means to preempt efforts by African and other
developing nations to lower prices through compulsory licensing and
parallel importing.
As the New York Times reported yesterday, "It seems unlikely that
Brazil, India or other nations that produce such drugs for home
consumption would have the export financing available to help African
nations buy the goods. The American loans, along with a recent
commitment by the World Bank to provide at least $500 million to help
African nations set up anti-AIDS initiatives, give added incentive to
African nations to treat many of their AIDS cases with Western
medicine."
Actually, the example of Brazil emphasizes the need for generic
competition. Through the use of generic production, Brazil has provided
combination anti-HIV treatments to over 90,000 people, and seen an
over 50% drop in the AIDS death rate. The savings on hospitalizations
and opportunistic infection treatment avoided were US$472 million
from 1997 -1999, and net cost per patient declined by 50% over the
same period as savings were increasingly realized and use of generics
became more widespread.
We would have hoped that by now the administration had abandoned the
impulse to prioritize U.S. corporate commercial concerns over the public
health imperatives of the African HIV/AIDS crisis. Such hope appears
to be misplaced.
As best we can tell from initial reports, the Ex-Im initiative is a plan
to supply overpriced drugs to Africa while burdening African nations
with new debt. That may be good corporate welfare policy, but it is
disastrous public health policy.
We urge you to terminate the Ex-Im policy before it gets underway and
makes the HIV/AIDS crisis worse.
Sincerely,
Dr. Alan Berkman, Health GAP Coalition
Julie Davids, Critical Path AIDS Project
Asia Russell, ACT UP Philadelphia
Robert Weissman, Co-Director, Essential Action
Robert Weissman <rob@essential.org>
Cc:
Al Gore, Vice President of the United States
James A. Harmon, President and Chairman of Export-Import Bank
Jackie M. Clegg, Vice Chair and Chief Operating Officer
William M. Daley, Ex Officio Board Member and former Secretary of Commerce
Charlene Barshefsky, U.S. Trade Representative
Members of the United States Senate
Members of the United States House of Representatives
--
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