Global public health: access to essential medicines.

Key Points

* Combinations of available pharmaceuticals--too expensive for nearly all of the infected people in the developing world--could enable many afflicted with HIV/AIDS to live relatively normal lives.

* Recent multinational pharmaceutical company offers of price reductions have not succeeded in making lifesaving AIDS medicines available to those in need in developing countries.

* Compulsory licensing policies could help developing country governments make essential medicines more affordable to their citizens.

One in five adult South Africans, one in seven Kenyans, and one in four Zimbabweans has HIV/AIDS. Former U.S. Surgeon General David Satcher has likened the HIV/AIDS epidemic in Africa to the plague that decimated Europe in the fourteenth century.

Existing treatments, which enable many people with HIV/AIDS in the U.S. and other industrialized countries to live relatively healthy lives, are unavailable to all but a few people in Africa. Until recently, lifesaving HIV/AIDS drug cocktails cost $10,000-$15,000 a year in many African countries--vastly out of reach for all but a small handful of the growing African population with HIV/AIDS.

For millions of HIV-infected people, there is a crying need to make lifesaving drugs more available--and quickly. It is crucial that rich countries provide adequate funding for the new Global Fund to Fight AIDS, Tuberculosis, and Malaria. The fund has made an initial round of grants, pledging $1.5 billion in support for projects over a five-year period--the bulk of the $1.9 billion currently at the Global Fund's disposal for this time period. Yet this amount is puny compared to the need: The Global Fund needs roughly $10 billion a year to address the AIDS pandemic and other infectious diseases wracking Africa and poor countries elsewhere, according to public health experts.

With pharmaceuticals constituting such a huge component of the cost of treating people with HIV, the price of drugs will remain a crucial factor in determining whether, and how many, people with HIV/AIDS receive treatment, irrespective of the level of donor support for the Global Fund to fight AIDS. Brand-name drug companies have responded to negative publicity on drug pricing by announcing some concessionary deals on some of their products. But these price reductions are limited in scope and have done little to make drugs available to HIV-positive people in poor countries.

A vital tool to help achieve affordability of essential medicines is the option of compulsory licensing. Compulsory licensing enables any government to instruct a patent holder to license the right to use its patent to a company, government agency, or other party. Zimbabwe, for example, could issue a license to a local company for an HIV/AIDS drug manufactured by Bristol-Myers Squibb. The Zimbabwean firm would then manufacture the drug for sale in Zimbabwe under a generic name, and it would pay a reasonable royalty to Bristol-Myers Squibb on each sale.

Compulsory licensing lowers prices to consumers by creating competition in the market for the patented good. Its impact is similar to the introduction of generic competition at the end of a drug's patent term--prices come tumbling down. Compulsory licensing can lower the price of medicines by 95% or more.

Compulsory licensing is permitted under the international trade rules established by the General Agreement on Tariffs and Trade (GATT) and administered by the World Trade Organization (WTO). It is regularly used in industrialized countries, including the United States. One of the GATT agreements, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), contains the international rules that the WTO enforces regarding intellectual property (patents, copyrights, and trademarks). Industry, especially the pharmaceutical sector, exercised heavy influence over the TRIPS agreement negotiations, and many public interest advocates generally believe that the TRIPS agreement inappropriately favors corporations.

In general, the TRIPS agreement requires countries to adopt U.S.-style patent systems, which apply both to products and processes and last for 20 years. This has compelled many developing countries--which had followed the lead of virtually every industrialized country in enacting weak patent rules while they were still industrializing (many European countries did not recognize patents until the 1970s)--to refashion their patent rules dramatically.

But despite the TRIPS document's biases and the requirements that it imposes on signatory countries, the agreement does permit compulsory licensing. Even so, multinational pharmaceutical companies object to the practice, which they perceive as curtailing corporate profits. Under pressure, the Clinton administration retreated from its longstanding, aggressive opposition to developing country efforts to undertake compulsory licensing. The Bush administration has continued the revised Clinton policy but, like the Clinton administration, continues to pose serious obstacles to effective utilization of this crucial policy instrument.