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Inter Press Service
HEALTH: UN Chief Endorses Generic Drugs for Global AIDS Fund
Gumisai Mutume
June 1, 2001
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 drug makers.

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 the offer.

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 market.

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 dollars.

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 transparency.

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.