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Gay Men's Health Crisis
Global Patent Police Block Cost-Reduction Efforts

Toby Kasper

March 10, 1999


Although the U.S. is still far from guaranteeing universal access to HIV treatments to its residents, the situation here pales in comparison to that in the developing world. Sub-Saharan Africa has been hardest hit by the global AIDS epidemic, with rates of infection exceeding 30% in some regions, yet the drugs that have extended the lives of so many Americans are simply unavailable there. To the extent that they can be found at all, they are generally priced at levels similar to those in the U.S. despite the fact that average incomes in Africa are a fraction of wages here.

Drug prices are so high because the pharmaceutical companies that develop and/or market the drugs retain patents to them, the exclusive rights to produce and sell the protected drug for a period of 20 years. In recognition that this patent protection system might result in a grave unavailability of life-saving medications, a set of measures that allows the protections to be overridden in emergencies has been codified in international law. In particular, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, a provision of the World Trade Organization, recognizes the right of governments to circumvent the normal patent protections "in the case of a national emergency or other circumstances of extreme urgency" (quoted from Article 31 of the TRIPS Agreement).

After reaching an agreement with the patent holder on royalty payments, governments may issue what is called a compulsory license allowing a local generic drug company to manufacture and sell the medication. Because generic drug companies do not have to recoup research and development costs and so can sell drugs for close to what they cost to produce, compulsory licensing generally leads to a dramatic fall in the drug's retail price. According to Jamie Love, the director of Ralph Nader's Consumer Project on Technology, the prices for HIV medications in the developing world could fall 50% to 90% if local firms were allowed to produce them. Since so few expensive antiretroviral drugs are currently being sold in poor nations, compulsory licensing would not represent any significant loss in profits to the pharmaceutical companies. The drug companies, though, are worried that lower prices abroad would generate increased pressure for them to bring down costs for the U.S. and European markets. They fear in particular that a global gray market would develop for the cheap licensed drugs.

Two countries have attempted to bring HIV treatments down to affordable levels via compulsory licensing, but stiff American opposition has blocked these efforts. Thailand once considered issuing a compulsory license for the antifungal drug fluconazole, but U.S. trade sanctions forced the country to abandon its plans. Today, fluconazole remains out of reach for most of the estimated 135,000 to 180,000 Thais who suffer from AIDS-related cryptococcal meningitis. Barriers to treatment for the one million Thais with HIV increased last fall. The government, financially pinched by the current recession, removed AZT and ddI from its list of subsidized medicines, while dismissing activists' demands for compulsory licensing.

The U.S. again imposed trade sanctions when South Africa tried to codify the principles of compulsory licensure in a revision of its national Medicines Act. Vice-President Al Gore personally raised the issue with South African Deputy President Thabo Mbeki, urging him to drop the compulsory licensing provisions. Although the South Africans have refused to repeal the compulsory licensing section, U.S. government officials have extracted promises that its provisions will not be invoked.

The "Africa Growth and Opportunity Act," now before the House of Representative as HR434, would further restrict the use of compulsory licenses in Africa by tying investment and development funds to respect for intellectual property rights. The Act also includes a host of trade and financial incentives for complying with the reductions in health and other social services imposed by multinational lending organizations. These measures are supposed to stabilize poor countries' currencies and reduce their enormous international debt burdens.

An alternative bill, the "H.O.P.E. for Africa Act," HR 772, contains measures that cancel some of this debt. It also supports infrastructure improvements, targets development aid for health care and protects the use of compulsory licensing in emergencies.

More than a thousand people rallied in Washington, D.C., on April 21, 1999, to support the second of these bills. Twenty-one were arrested after blocking the doors to the building housing the Pharmaceutical Research and Manufacturers Association, a lobbying group for the drug industry. More information on the future activities of the Health GAP (Global Access Project) Coalition, which sponsored the April 21 rally, may be obtained from Toby Kasper in GMHC's Department of Treatment Education and Advocacy, 212/367-1474 or

On Wednesday, June 9, from 6:30 to 8:30 P.M. in Room 405/410, GMHC will hold a free community forum on these issues, entitled "Access to Life-Saving Medicines in the Developing World: Understanding the Crisis." Speakers will include Daniel Berman, campaign manager for the Doctors Without Borders/Médecins Sans Frontières "Access to Essential Medicines Campaign" and Eric Sawyer, director of the HIV/AIDS Human Rights Project. To register for this forum, call 212/367-1330 and enter 832 at the prompt.