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The Global Challenge of Access to Treatment and the Issue of Compulsory Licensing

December 2000

“We have upside down access to AIDS drugs in this world. The drugs are where the disease is not, and the disease is where the drugs are not. Commercial interests come above human suffering.”

Peter Mugyenyi
Joint Clinical Research Center, Kampala, Uganda

The Brazilian people with AIDS organization, Grupo Pela VIDDA invited TAG’s Mark Harrington to discuss The Global Challenges of Access to Treatment and Compulsory Licensing at the 10th National Meeting of People Living with HIV and AIDS in Rio de Janeiro on November 3. His talk was followed by that of Jorge Bermudez who, as coordinator of Brazil’s Center for Pharmaceutical Policies, helps implement the Brazilian federal policy of providing free locally-manufactured antiretroviral drugs to its citizens with HIV. A complete transcript of the two presentations is available at the TAG website. An abbreviated version of their remarks appears below.

The 10th Encontro Nacional was held, incongruously, at the Brazilian Jockey Club, a white, fascist-era edifice in downtown Rio. Several hundred PWAs from around the country attended the three-day conference, along with a smattering of international delegates. The conference was enormously diverse with, seemingly, a slight preponderance of women. Over fifty people attended the treatment access/compulsory licensing session. Since the primary language of most was Portuguese, I edited my talk, alternating sentence-for-sentence with my translator, Alex from Grupo Pela VIDDA/RJ.

When asked to discuss the global challenge of access to treatment and the issue of compulsory licensing, I did not feel like the best person to address these issues. To be sure, as a treatment activist working in New York City for the past twelve years, I am aware of issues of poverty and inequitable access to health care. The organization I work for, Treatment Action Group (TAG), has focused for eight years on speeding up research and treatment of HIV and AIDS. But other activists in Brazil, South Africa, and the U.S. have been the leaders on these issues, including some of you from Grupo Pela Vidda, South Africa’s Treatment Action Campaign (TAC) and Médecins sans Frontières, and in the U.S., the Consumer Project on Technology (CPT), Health GAP, and ACT UP/Philadelphia, among others.

It’s impossible to discuss global treatment access issues without also acknowledging the unmet needs of health care access in the U.S. Of all the world’s rich nations, the United States has the least equitable health care system. Rich people get some of the best health care in the world; poor people may get poor care, or no care at all. These inequities mean that people with HIV in the U.S. may get very different care depending on their class, gender, ethnicity, insurance coverage, and location. While AIDS activists have not been able to get universal health care in the U.S., they have been able to pressure the government to develop special programs for HIV-infected people. Each state has its own program to provide free treatment to poor people with HIV. Some of these programs enroll many people and cover many drugs; others enroll few people and have minimal coverage.

Issues of access to treatment, then, are not restricted to developing countries, although there the scale of the problem is more acute. I was intrigued about being asked to address this topic in Brazil because here there is a pioneering effort to provide antiretroviral medication to thousands of people with HIV despite the fact that Brazil is a developing country whose poor have many other pressing needs.

It’s particularly interesting for me to see what has worked in Brazil, and how it’s happened, because of the contrast with what we saw in South Africa at the Durban AIDS conference earlier this year. There, another developing country’s government is having a very difficult time coming to grips with a much larger HIV epidemic. There is a powerful, articulate, mobilized grassroots advocacy effort going on in South Africa by the Treatment Action Campaign (TAC) to pressure the government, and the drug companies, to broaden access to drugs for AIDS and HIV. Many of the issues which have been addressed relatively successfully in Brazil have yet to be fully addressed by South Africa’s new democratic government.

So I am here to learn from you why this program was initiated, who supported it, what the struggles were to implement it, how it’s going, what the challenges are, and whether or not this initiative can be adapted or adopted in other developing country settings. I will be exploring some big issues such as global access to treatment, intellectual property rights, and compulsory licensing, but I have more questions than answers.

The Need for Global Access to HIV/AIDS Treatments

I’m not going to talk much about the need for global access to treatments for HIV and AIDS. HIV-infected High Court Judge Edwin Cameron of South Africa stated this need most clearly:

Nearly 34 million people in our world are this moment dying [of AIDS]. And they are dying because they don’t have the privilege that I have, of purchasing my health and life . . . Now why should I have the privilege of purchasing my life and health when 34 million people in the resource poor world are falling ill, feeling sick to death, and are dying? That to me . . . seems a moral inequity of such fundamental proportions that no one can look at it and fail to be spurred to think and act upon it. That is something which we in Africa cannot accept. It is something that the developed world also cannot accept.

Before discussing the issues of compulsory licensing, parallel importing, and generic drugs versus brand-name pharmaceuticals, I would like to briefly survey the responses of different sectors to the need for global treatment access. I will review:

  1. The response of the pharmaceutical industry;
  2. The response of rich country governments;
  3. The response of UNAIDS (the Joint UN Programme for HIV/AIDS); and finally
  4. The response of developing countries

I. The Pharmaceutical Industry

According to IMS Health, a private, pharmaceutical industry consulting firm, in two years the global pharmaceutical market will bring in total revenues of $406 billion. And an overwhelming 77.9% of that anticipated global pharmaceutical revenue will come from North America, Europe, and Japan. Very little of their revenue will come from the developing countries where HIV is most common. Far more drug company revenue, however, will come from Latin America, Southeast Asia, and the Indian subcontinent than will come from Africa. This may explain, at least in part, why so many drug company discounts and donation programs announced thus far have focused mainly on African countries rather than on the developing world as a whole (although there are exceptions).

Last year, antiretroviral drugs brought in about $3.4 billion in sales. This figure is estimated to more than double to between $7-8.7 billion per year in just seven major markets: the U.S., Britain, France, Germany, Italy, Spain and Japan. One consulting firm estimated that “price reductions of 75-80% for branded drugs could help to wipe out generic competition in emerging markets such as Brazil, China, India, South Africa, and Thailand.”

However, until very recently, most companies preferred strategies other than major price reductions for dealing with AIDS in poor countries. These strategies included:

  • Ignoring AIDS in the developing world;
  • Setting a “one world, one price” policy, in the face of enormous disparities in income between and within countries affected by HIV;
  • Selling expensive drugs for AIDS and HIV to tiny rich elites in poor countries;
  • Applying pressure on the U.S. and other rich countries to pressure poor countries not to make generic drugs;
  • Starting charitable programs in one or a few affected countries to increase support for AIDS-related programs; and finally
  • Most recently, a set of promises to provide developing countries with steep discounts or even free drugs.

These most recent promises were made in the run-up to the Durban AIDS conference with its inevitable focus on the inaccessibility of treatment for 95% of the world’s 34 million HIV-infected people, and, so far as I am aware, not one person has received a single pill as a result of any of these promised price reductions or drug give-away programs.

Among the flurry of recent drug company initiatives are the following:

  • Bristol-Myers Squibb, makers of ddI (Videx brand didanosine) and d4T (Zerit brand stavudine), has promised $100 million to its “Secure the Future” program, which involves setting up HIV prevention, treatment, and research programs in a number of African countries.
  • Bristol-Myers Squibb has, most recently, promised to reduce the prices of ddI and d4T to about $500 per year in Senegal. This is part of the five-company promise made in May 2000 to provide steep discounts for developing countries. Senegal has 79,000 people living with HIV. If one quarter of them need antiretroviral therapy (because their CD4 counts are below 250) this would mean that about 20,000 Senegalese would need anti-HIV therapy. The BMS discount, when added to one by Merck (see below), would bring the cost of one year’s triple therapy to between $950-$1,850 per year. The median income in Senegal is $510 per year. One article estimated that about 670 adults and 200 children would be treated by 2003. Clearly these price discounts are insufficient, and will reach too few HIV-infected people in Senegal.
  • Boehringer Ingelheim will offer Viramune brand nevirapine free for a five year period to developing countries for prevention of mother-to-child HIV transmission.
  • Glaxo-Wellcome, the first big company to announce a specific price reduction for HIV drugs in poor countries, has offered to reduce the cost of Combivir (AZT and 3TC) from about $16 per day in rich countries to $2 per day in selected poor countries. (This would still come to $730/year for double therapy for a single person, which is more than the average annual income in many countries affected by HIV.)
  • Merck & Co. has provided $3 million to the Harvard AIDS Institute for its Enhancing Care Initiative (ECI) in Brazil and Senegal. Soon the program may be expanded to South Africa and Thailand. Merck has also given $1 million to upgrade the library of the University of Cape Town Medical School.
  • Merck & Co. has announced a five-year, $50 million gift to the Republic of Botswana, in conjunction with the Gates Foundation, which is also giving $50 million. This program will support development of a comprehensive infrastructure for dealing with HIV in Botswana, a country of 1.5 million people, about 290,000 of whom are living with HIV. The Merck donation will be at least in part in the form of unspecified drug subsidies. There are some problems with this. If one quarter of Botswana’s HIV-infected population require anti-HIV therapy, that means about 50,000 people per year will need to be served. If Merck and Gates together are giving $10 million to Botswana per year, this means that 50,000 could be treated per year if the cost of antiretroviral therapy was two hundred dollars per year. There would be no money left over for prevention, testing and counseling, health care clinics, treatment and prevention of opportunistic infections, and palliative care.
  • Merck has also signaled its intention to provide discounts on the price of indinavir and/or efavirenz (Crixivan and Stocrin) to Senegal. The discounted price may be somewhere between $450 and $1,300. This is the first time Merck has explicitly abandoned its “one world, one price” stance. This discount will be applied along with the discounts from Glaxo and BMS, bringing the cost of triple therapy in that country to $950-$1,850 per year.
  • The Swiss giant Hoffmann-La Roche, makers of HIVID brand zalcitabine (ddC) and Invirase and Fortovase brands saquinavir, and marketers of Viracept brand nelfinavir to most of the world, has also promised steep discounts under the UNAIDS program. However, they have not announced any specific figures or places where this will take place. In the meantime, they are helping support a health care education program called SHARE, which is carried out by the International AIDS Society (IAS), and gives grants to various community based organizations in the U.S., Brazil, South Africa, Eastern Europe and elsewhere.
  • Abbott Laboratories developed an agreement with Tanzania in late June 2000 and is providing “initial grants in Mbeya, an especially poor region in southwest Tanzania where AIDS is rampant.”
  • In response to a campaign by South Africa’s Treatment Action Campaign (TAC) and Médecins sans Frontières (MSF), Pfizer has agreed to provide free fluconazole (Diflucan) to South Africans who are diagnosed with cryptococcal meningitis. However, this offer is restricted to one country and one AIDS complication. TAC and MSF have demanded that Pfizer broaden the offer to include treatment for esophageal candidiasis and to include other poor countries, or that Pfizer agree to a compulsory license for a local company to manufacture cheap generic fluconazole. In the meantime, TAC has imported 5,000 pills of inexpensive Thai fluconazole (Biozole), some of which has been submitted to the government for quality control testing.

Clearly, these initiatives, while praise-worthy, are not enough. They are, however, a move towards what WHO calls “equity pricing,” a system “whereby companies sell patent-protected pharmaceuticals at, or close to, cost in poor countries, while charging higher prices in developed countries to ensure a return on the costs of R&D.” In Durban, former Glaxo executive and current AlphaVax CEO Peter Young concluded that HIV-related drugs and vaccines could provide “globally attractive commercial opportunit[ies] even with close to break-even developing country pricing — but [this would be] dependent on political consensus for differential pricing.”

Whatever the fate of differential pricing, in any case, the programs announced to date will reduce prices too little and reach too few of the world’s HIV infected people. What are rich country governments and multilateral agencies such as the United Nations doing?

II. The Response of Rich Country Governments

Rich country governments have, until recently, given very little thought to AIDS in the developing world. As recently as 1996, just about $350 million was spent on international AIDS programs by the world’s richest 29 countries. In recent years, with prosperity in the U.S. and Europe, more attention has been focused on AIDS around the world. The U.S., for example, is increasing its support for international AIDS programs by about $100 million this year.

However, the rich country governments have been profoundly ambivalent in their approach to the struggle for affordable treatments in developing countries. For example, the U.S. government has pressured many developing country governments, such as Brazil, South Africa, and Thailand, to restrict the availability of generic drugs, impose strict new patent requirements on pharmaceuticals, and outlaw parallel importing of cheaper drugs. For example, on a recent visit to Brazil, then-U.S. Commerce Secretary (and later campaign chairman for VP Gore) William Daley brought along Merck’s president and Pfizer’s vice president.

Recently, after a dogged campaign against Vice President Al Gore led by Health-GAP, ACT UP/Philadelphia, and the Consumer Project on Technology (CPT), the U.S. changed its position on compulsory licensing and parallel importing of drugs for sub-Saharan African countries. But these changes did not affect U.S. policy towards Latin American or Asian countries which also have large and growing epidemics.

Just as confusing was the U.S. Import-Export Bank’s offer, made just after the Durban AIDS conference, of $50-100 million to developing countries to buy drugs for HIV and AIDS. This comes in a year with a global campaign to reduce developing country debt. So far, no country has accepted the U.S. offer.

The U.S. also uses its influential if not paramount positions in the World Bank, the World Trade Organization (WTO), and other multilateral agencies to push an agenda which often benefits the pharmaceutical companies and their shareholders in rich countries at the expense of developing countries.

III. The Response of Multilateral Agencies and UNAIDS

Efforts by multilateral UN agencies to address this issue have also been disappointing, perhaps because they are generally beholden to their largest funders, who are the rich countries with a strong interest in preserving pharmaceutical profits and intellectual property rights. UNICEF responded slowly to research showing that cheap anti-HIV regimens could reduce the incidence of mother-to-child transmission. The World Bank was also late to respond to AIDS, although it is now increasing support for AIDS programs. International Monetary Fund (IMF)-mandated structural reforms often resulted in decreased health care spending in developing countries that were hard hit by AIDS. The Joint UN Programme for HIV/AIDS, UNAIDS, is grossly underfunded — it receives just $60 million per year to deal with the global pandemic.

UNAIDS has several broad initiatives to support increased investment in AIDS programs worldwide, such as proposing debt relief for poor countries; about 20 countries may benefit form this scheme in the near future, but here I will focus on the UNAIDS pilot HIV drug access initiative.

In November 1997 UNAIDS initiated a pilot HIV Drug Access Initiative to see whether it would be possible, by working with drug companies and four developing country governments, to secure significant price decreases for AIDS drugs, thereby enabling those countries to treat a greater number of their HIV-infected people. The four countries selected were Chile, Ivory Coast, Uganda, and Vietnam. Pharmaceutical partners included Bristol-Myers Squibb, DuPont, Glaxo-Wellcome, Hoffmann-La Roche, Merck, Organon Teknika, and Virco. The U.S. Centers for Disease Control (CDC) and the French ANRS (Agence National de la Recherche du SIDA) helped provide support for project evaluation.

Each country established a national HIV drug policy oversight committee to oversee the program. Non-profit companies were established to purchase drugs and provide them to participating health centers. A variety of programs were established to educate health care providers and patients about treatment and to provide ancillary care.

According to a UNAIDS evaluation issued in August 1999, among the lessons learned from this program are:

“Improving access to drugs requires strong political will to change current drug supply and delivery systems.”

“There is little difference in terms of costs, infrastructure requirements, and difficulty in administration between antiretrovirals and cheap opportunistic infection (OI) drugs. The more important distinction is between expensive drugs such as antiretrovirals and sophisticated OI drugs, and non-expensive and essential drugs.”

“The announcement of the initiative created high expectations, which could not be met by the program.”

What were the actual concrete results of the pilot program?

The Experience of Uganda

In Uganda, six mid-level centers were established outside of Kampala for providing “more sophisticated treatments” for OIs and AIDS-related cancers. One hundred and eighty-three physicians and health care workers were trained on the use of antiretrovirals. Five clinics in Kampala now provide antiretroviral therapy. UNAIDS claims that Uganda would have the capacity to treat 850 patients by the last quarter of 1999, and 1,200 patients by the last quarter of 2000. Since UNAIDS estimates that Uganda has about 930,000 people living with HIV, this program is reaching just about one tenth of one percent of the country’s HIV infected people.

Not everyone is pleased with the UNAIDS program in Uganda. At a satellite symposium in Durban, one Ugandan doctor was very critical. At the TAC/MSF symposium on Improved Access to HIV/AIDS Drugs in Developing Countries, Dr. Peter Mugyenyi from the Joint Clinical Research Center in Kampala discussed “Market Failure in Uganda.” He said:

We have upside down access to AIDS drugs in this world. The drugs are where the disease is not, and the disease is where the drugs are not. Commercial interests come above human suffering. The UNAIDS pilot treatment access initiative which has been carried out for the last two years in Ivory Coast and Uganda has not been a success. It has resulted in no appreciable reduction in the cost of drugs. In some cases, prices went up. It’s been a miserable failure. It never started in Vietnam, and whether it did anything in Chile remains a puzzle.

The UNAIDS/pharmaceutical company announcement this spring about “massive” price reductions was more political than practical; it was done for the media. They say “we are negotiating,” but I don’t understand what this negotiation is all about. If you’re going to reduce the cost, reduce the cost. If you’re not going to reduce the cost, then just shut up. The UNAIDS initiative is not enough. We need to explore compulsory licensing, generic drugs, and other new innovative methods. First lower the price — then make the announcement. We need the governments to help us. All AIDS drugs should be put on the essential drugs list.

The Experience of Ivory Coast

In Côte d’Ivoire, 190 physicians have been trained. About 650 patients were receiving drugs through the initiative by mid-1999. Eight referral centers and four follow-up centers were established in Abidjan, and there are four follow-up centers outside the capital. Some additional assistance was provided by the French government through its International Therapeutic Solidarity Fund. UNAIDS estimates that 1,500 patients may be treated by the end of 2000. Since Côte d’Ivoire has about 800,000 people living with HIV, this program is reaching between 0.1-0.2% of the HIV infected population.

Vietnam and Chile

The Vietnamese and Chilean programs were started later than the African ones, and were still in development when UNAIDS assessed the pilot program. UNAIDS estimated that it would be treating 400 people in Vietnam and 1,800 in Chile by the end of 2000. “Negotiations continue with drug companies to seek further drug reductions.”

UNAIDS continues to describe the pilot project as a success. Last month, it announced that almost 4,000 patients in the four countries have received drugs through the program. UNAIDS intends to involve six more Asian and African countries. Of course, treatment of 4,000 people with HIV is better than nothing, but this represents just a drop in the bucket of the worldwide pandemic. Four thousand is just 1/8,500 of the world’s HIV infected population.

Recognizing this, in October 2000 UNAIDS, UNICEF and WHO announced a public tender to provide certain AIDS-related medications and diagnostics “at a preferential price to developing countries . . . to accelerate sustained access to, and use of, high-quality interventions for the treatment and care of HIV/AIDS-related illnesses, and to prevent mother-to-child transmission of HIV.” It is unclear whether these agencies have the money to actually purchase anything.

Clearly more needs to be done. What can be learned from developing countries and their own experience with trying to provide drug access?

IV. The Response of Developing Countries

Most developing countries have acted like deer caught in headlights when it comes to providing leadership of any kind around HIV prevention, treatment, and care. Some very poor countries, such as Senegal and Uganda, have provided leadership focusing on prevention and human rights. Some medium-income countries, such as Thailand, have also developed effective prevention programs. We already reviewed UNAIDS-supported programs in Senegal and Uganda which may result in antiretroviral treatment for about between 0.1-1.0% of their HIV-infected people. Thailand is doing a bit better on treatment, but not much, partly because of the high cost of drugs. Despite pharmaceutical company pressure, Thailand is making some generic antiretrovirals, such as ddI and d4T. However, the Thai News Agency reported last month that just 3,000 of Thailand’s one million HIV-infected people can afford therapy. Negotiations are ongoing between the Thai government and drug companies.

The Example of Brazil

Of all the developing countries, Brazil has done the best job of making anti-HIV treatment available to a significant proportion of its 580,000 HIV-infected people. Since Brazil never had restrictive patent laws which limit the use of generic drugs in, for example, South Africa or Guatemala, it started making its own nucleoside analogues such as AZT, ddI, etc., in the mid-1990s. Brazil invoked the “national emergency” provisions of the Trade Related Intellectual Property (TRIPs) clause of the WTO treaty to begin manufacturing its own antiretrovirals. Since 1996 the AIDS mortality rate has declined by about 50%. According to its most recent reports, Brazil will spend $400 million this year to make medication available to 87,500 people with HIV. Brazilian made generic nucleoside analogues have brought the prices of those drugs down by 72%, while the prices of brand-name protease inhibitors and NNRTIs has dropped by just nine percent. This means that the price of a triple therapy regimen is somewhere around $4,000 per person per year in Brazil, compared with up to $15,000 per year in the U.S.. The government estimates it has saved $422 million in health care costs by providing these drugs.

Questions for the Future

Having reviewed the efforts made by drug companies, rich countries, UNAIDS, and a few developing countries, it is clear that no solutions will be available to people with HIV unless there is both political leadership in the affected country and massive, effective grassroots mobilization of the affected and at-risk communities.

Oddly, even a spokesman for Pharmaceutical Research & Manufacturers of America (PhRMA), the drug company lobbying powerhouse in Washington, D.C., acknowledged Brazil’s efforts. In a recent Washington Post article he said, “Five years ago, President Cardoso realized they were having a problem, and he made a point to do something about it . . . Brazilians certainly should be praised for working on what could have been a terrible situation.”

In Durban, the Brazilian government issued an offer to provide technical assistance to other developing countries to share experience regarding distributing antiretrovirals free of charge to those who need them. It proposed to the World Health Assembly and UNAIDS the establishment of a data bank to provide comparative information on drug prices worldwide.

Clearly an unusual combination of factors contributed to this unprecedented and encouraging experience. While I am not familiar with all the details, it seems that, at a minimum, these factors included:

  1. An articulate and well-mobilized HIV/AIDS advocacy community;
  2. Intelligent use of mass media and other means of communicating to powerful elites;
  3. Unusual government commitment to addressing the HIV epidemic;
  4. An existing local pharmaceutical manufacturing infrastructure;and
  5. An unusually lenient drug patent regime.

Key Questions

I would like to know more about how the Brazilian program was proposed, developed, and implemented, and about what are its strong points and weak points. Specifically:

  1. How many people with HIV at greatest need are receiving antiretrovirals?
  2. How broad is access to necessary opportunistic infection (OI) prophylaxis and treatment?
  3. How good is the quality of the locally-produced anti-HIV drugs made in Brazil, and what steps are taken to guarantee their quality and purity?
  4. Does Brazil have the technical capacity to scale up production to make these generics available to other developing countries?
  5. What is being done to explore the possibility of manufacturing cheap generic protease inhibitors and NNRTIs?
  6. What kind of trade pressure is Brazil coming under from the pharmaceutical industry, the U.S. and European governments, and the WTO?
  7. What can be done by advocates in the North to support Brazil’s efforts, and what can be done by advocates in the South to emulate them?

Finally, even if the price of triple therapy were reduced to $200-500 per person per year, there would still be millions of people who would be unlikely to receive them because of problems with health care infrastructure, lack of political will, lack of resources, etc. A long-term solution will involve new agreements between developing countries, rich countries, and the pharmaceutical and generic drug industries, among others. What can advocates do to speed up the development and implementation of these long-term solutions?

Thanks again for the opportunity to discuss and learn more about these issues.

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