WASHINGTON, Jun 1 (IPS) - UN Secretary General Kofi Annan is
playing down fears that US pressure could exclude cheaper,
generic drugs from a new global initiative to fight AIDS.
Annan, who spoke with journalists after addressing the US
Chamber of Commerce here Friday, said he was unaware of US
pressure to exclude generic treatments from the official
procurement list of the Global AIDS and Health Trust Fund,
announced recently at an African AIDS summit.
"We would want value for money and we would want to do it
(purchase drugs) as cost effectively as possible," Annan said.
"We will not exclude generic drugs."
The multilateral fund seeks annual contributions of between
seven billion and 10 billion dollars to address care,
treatment, and prevention of HIV/AIDS, tuberculosis and
malaria. Commitments from donor countries are expected at the
UN Special Session on HIV/AIDS in New York, June 25-27.
Annan's words likely will upset multinational pharmaceutical
companies, which have sought to block generic competition in
the area of AIDS drugs.
"We believe the fund should not be used to import generic drugs
into countries that have intellectual property rights laws,"
said Mark Grayson of the Pharmaceutical Research and
Manufacturers of America (PhRMA), a leading lobby group of US
Grayson highlighted South Africa as an example of a country
that, as a party to international intellectual property
agreements, should not import generics.
The Pretoria government recently won a major battle against the
industry when a group of drug firms withdrew a legal challenge
to new legislation granting the health minister power to import
or produce generic drugs.
"We believe we have already made a big contribution to AIDS
care by lowering our drug prices," Grayson said, referring to
an offer by five major drug makers to negotiate discounts
behind closed doors. Few sub-Saharan countries have taken up
Annan assured the business gathering that the global fund would
honour patent rights while at the same time expanding access to
cheap drugs to the poorest people. He provided no details on
how this would be done.
The pricing war pits major brand-name drug manufacturers in
wealthy countries against and generic producers in countries
like India and Thailand, which have yet to endorse to World
Trade Organisation's intellectual property regime.
Generic manufacturers are selling copies of patented triple
therapy combination anti-retroviral drugs to African
governments, such as those of Cameroon and Nigeria, for 350
dollars per patient per year. By contrast, brand name drugs
fetch between 10,000 dollars and 15,000 dollars on the US
The UN has brokered a country-by-country programme under which
five major pharmaceutical companies are offering triple therapy
drugs to Kenya at prices ranging from 1,300 dollars to 1,600
According to the French non-governmental group Doctors Without
Borders, however, stringent conditions attached to the
agreement mean that fewer than 2,000 of Kenya's 2.3 million
HIV-positive people are able to benefit.
The industry has long been charged with using the secret
country-by-country negotiations to extract conditions and
impose delays and limitations while obscuring price
Paul Davis, an activist with Health Gap Coalition, an AIDS
treatment network, said big pharmaceutical companies have the
backing of the US government in their opposition to including
generic drugs in the global AIDS fund.
Davis said US delegates at this week's governing board meeting
of UNAIDS, the Joint UN Programme on AIDS, made clear that the
US government would not compromise on generic drugs and would
oppose bulk procurement of drugs by the new global fund.
How the fund will operate remains unclear but Annan said it
probably would be run by a small secretariat outside the UN,
with financial operations housed at the World Bank.
"Currently all decisions are being made in non-transparent
negotiations between the US, European Union and various UN
agencies," Davis told IPS. "By the UN special session on
HIV/AIDS, most of the parameters and policies will have been
established, and will be announced to delegations."
Major commitments to the fund are expected at that meeting. The
US pledged 200 million dollars to the fund last month, becoming
the first country to do so, but its contribution has been
criticized as paltry compared to the magnitude of need.
The Health Gap Coalition is pushing for the AIDS fund to be
permitted to purchase drugs and other health commodities at the
best world prices, regardless of patent status.
"Generic competition has been the lever that has driven the
prices of AIDS drugs down," Davis said. "If they are excluded,
it would only serve the interests of pharmaceutical companies
and not the poor people who need the drugs most."
Patented medical products should also be available to poor
countries at or near marginal costs of production, through bulk
procurement, he added. Grayson, at PhRMA, disagreed.
"Our members feel that each company should have the right to
negotiate the prices of each drug with each purchaser," he
said, highlighting industry fears that large-scale purchases
through competitive bidding would put downward pressure on
patented drug prices.