April 24, 2006
The Value of an African Life According to Merck
I wanted to follow up on yesterday’s post on AIDS in Africa. This weekend was the 2nd Annual U.N. Documentary Film Festival. It had many great films: long format, short format and PSAs that deal with different cultural, economic, and human rights issues in the developing world.
One of the films presented yesterday was Value of a Life: Aids in Africa Revisited. I thought it was poignant. In 2003, the U.N.’s HIV/AIDS special representative returned to Africa to document his journey. In the short film, Lewis travels with a group of Canadian agencies throughout Africa. They challenge the Canadian government to pass legislation allowing patents to be circumvented in favor of inexpensive, generic AIDS drugs. Of course after the screening I just got mad about the unfairness of patents on intellectual propety.
While pharmaceutical companies such as Merck and Pfizer have reduced the price of AIDS drugs, this is not enough and not nearly as effective as allowing generic drugs to be made. I think more people need to be outraged by this.
The pharmaceuticals industry has made huge investments in research and development. On the whole, the research has paid off, both in the development of effective new drugs and in profits for the firms. But the rest of their argument is self-serving…
Without keeping high prices, drug companies argue that it couldn’t develop many of these drugs at all. How can this be true? Given the hundreds of millions of dollars that pharmaceutical companies make thanks to intellectual property rights—compared to how much of this money is allotted for research. Most likely the amount of money spend in marketing and image branding exceeds what is going into research. In 2004, Pfizer is listed as having 52.5 billion in healthcare revenue and less than $8 billion going toward research and development
Besides even if it takes $200 million to develop a new drug, so what? Revenue is in the billions. Developing countries should be allowed to make generic drugs. I think a loss of revenue is okay if it will save people’s lives. There’s no sense of the Greater Good with big business, huh?
When the Fourth Ministerial Meeting of the World Trade Organization adopted, in November 2001, a declaration that public health concerns overrode intellectual property rights, pharmaceutical companies spent the next two years trying to undermine the agreement by pressuring countries to attach conditions to the sale of essential drugs by countries with drug manufacturing capacity to those without it.
For an interesting read take a look at “Safeguarding the Future”. It offers a commentary on the effect of drug patents given the problem so for many AIDS sufferers:
“If patents safeguard a future, perhaps it is the future of private-sector research. It is certainly that of the pharmaceuticals companies’ shareholders, but it is never that of the people who are ill.”
A persistent fear among pharmaceuticals manufacturers is that drugs sold in poor countries at low prices would be redirected to rich countries and undercut the companies’ primary source of revenue. As a result, they sometimes charge high prices in poor countries for newly developed drugs, or simply decline to sell there at all.
Despite such concerns, two months ago Merck reduced the price for Crixivan to 600 dollars per year and Stocrin to 500 dollars in developing countries. The price works out to 1.64 dollars per day for Crixivan and 1.37 dollars per day for Stocrin. This is hardly affordable if half the world is living on less than $2 a day—and with most African countries having very high rates of unemployment.
This move by Merck comes amid a ccourt case in South Africa in which 39 global drug companies are seeking to protect their patent rights by challenging a law allowing the import of low-cost generic drugs. The companies claim in their lawsuit that the use of cheap generic drugs made by companies that have not poured billions of dollars into research will override patent rights and put the entire industry at risk. It’s highly doubtful that a billion-dollar industry will be at risk.
Meanwhile we have to think about the lack of labor force or social capital in most African countries as a generation of children raise their younger siblings and grow up without their parents.
An estimated 4.2 million South Africans are infected with HIV or AIDS, and the epidemic is even worse in other sub-Saharan African nations.
“Solving the world AIDS crisis will require something that governments, international lending institutions and multinational companies — the other flank of international governance — often lack: compassion and the ability to see beyond profit. Racism also will have to be factored into such moral calculus.”
— Tamara Straus, The Moral Calculus of AIDS, April 10 2001