BY NORM DIXON
The United States government, at the urging of the big Western drug corporations, is attempting to prevent Brazil expanding its production of cheap "generic" versions of patented anti-AIDS medicines. If Washington and the drug lords succeed, Brazil's policy of providing free anti-retroviral medicines to people diagnosed with HIV will be endangered. Hundreds of thousands of people will die needlessly and prematurely.
It is the widespread availability of cheap, mostly Brazilian-produced generic (i.e., non-brand name) anti-AIDS medicines that has allowed the Brazilian government to distribute them free of charge to all the country's people who have been diagnosed as being HIV+. At present, more than 90,000 are receiving free medicine.
Generic medicines can be bought at prices up to 95% cheaper than the brand-name drugs marketed by the huge Western pharmaceutical corporations. In the US and Europe, brand-name combinations of anti-AIDS medicines cost up to US$15,000 per patient per year. Brazil produces them for US$3000 per patient per year and may soon be able to reduce that to less than US$700.
The Indian company Cipla has recently offered generic anti-retrovirals for US$600 per patient per year to African governments, and to the humanitarian organisation Medecins Sans Frontieres for use in Africa for US$350 per year. Another Indian firm, Hetero Drugs, announced in early March it would sell the same drugs for US$347 a year.
Free treatment
Since Brazil's free medicine program was introduced in 1997, the death rate from AIDS-related diseases has been halved and the number of AIDS-related hospitalisations slashed by 80%. The incidence of tuberculosis in HIV+ people has dropped by half.
The program's current annual cost of US$440 million a year is offset by savings to the health budget of about US$210 million. These savings result from fewer and shorter hospital stays by AIDS patients and other savings to the health system.
In 1994, the World Bank predicted that Brazil would have 1.2 million HIV+ people. Because of the availability of medicines, the transmission rate has been cut and the number of HIV+ people has stabilised at about 580,000. However, most are unaware that they have the condition.
For Brazil to continue to extend its program to reach these people — and prevent hundreds of thousands of premature deaths — it must be able to continue to expand its supplies of affordable life-prolonging medicines. Washington and the predatory drug combines have other ideas.
It has been Brazil's ability to evade the Western drug corporations' monopoly of the production, distribution and marketing of anti-AIDS medicines that has laid the basis of its successful AIDS-fighting policies.
The super profits of the Western drug monopolies are only possible because, in rich countries, a patent on a new medicine guarantees the big corporations a 20-year monopoly on its production and marketing. This allows the drug lords to charge whatever they think the market (or the richest part of the market) will be prepared to pay. Medicine prices are unrelated to the cost of production or the forces of supply and demand. During the 20-year period, potential competitors are prohibited from producing and marketing inexpensive versions. Massive super profits for the Western drug tsars is the result.
From 2000, Third World countries are required to legislate to ensure that their national laws protect Western pharmaceutical corporations' patents for the 20-year period as required by World Trade Organisation (WTO) agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). If they fail to do so, Third World countries may face WTO-sponsored trade sanctions. While members of the WTO have until 2006 to comply with TRIPS, all are required to grant provisional "market exclusivity" for patents filed after 1995.
According to the British aid agency Oxfam, the WTO rules "will raise the price of medicines, including those needed for the treatment of poverty-related illness". The intention of the rules is to prevent Third World generic drugs industries from "producing and exporting".
In May 1997, under pressure from the West, Brazil introduced new patent laws to comply with TRIPS. But there was an important loophole: before May 1997, drugs could not be patented in Brazil.
Following the passing of its 1997 law, Brazil's state pharmaceutical firms began to build factories and develop the scientific and technological expertise to produce generic versions of anti-AIDS drugs that had been patented before May 1997.
Brazil now produces seven of the 12 anti-AIDS medicines used in the country and supplies almost 20% of its needs. Medicine prices have tumbled, both for AIDS sufferers and Brazil's cash-strapped health system, by an average 79%.
Brazil's law also states that, to maintain a patent, a patent-holder must manufacture its product in Brazil rather than simply importing it. The patent holder has three years to comply or it may be forced to forfeit its patent to a local manufacturer prepared to make the product in Brazil.
In 1999, Brazil's president decreed that the country's AIDS crisis was a "national emergency" and as such — consistent with WTO TRIPS provisions that allow patents to be overridden in such situations — the Brazilian government could issue compulsory licences to Brazilian state firms to produce copies of anti-AIDS medicines patented since 1997.
In February, the Brazilian government announced that if the world market prices two anti-AIDS drugs — US-based Merck's efavirenz (retailed as Stocrin) and nelfinavir (marketed as Viracept), which is jointly patented by Switzerland's Hoffman-La Roche and US-based Pfizer — are not reduced by June, then Brazilian companies will be permitted to produce the medicines.
The annual wholesale price for a course of treatment of efavirenz is US$4500 and US$7100 for nelfinavir. Brazilian generics would wholesale for at least half that.
The US pharmaceutical giants, claiming that Brazil's "use it or lose it" patent provision breaches the WTO treaty, rushed to the US government and demanded that the US government take action. Last May, Washington formally complained to the WTO and on January 8 asked the WTO to form a dispute panel to arbitrate and issue a binding ruling against Brazil's patent law.
South Africa's Treatment Action Campaign (TAC) on February 5 joined with hundreds of Brazilian organisations to demand that the US government drop its WTO complaint against Brazil.
"The complaint is an attempt by the United States government to destroy Brazil's generic pharmaceutical industry", stated the TAC. "This callous action threatens the lives of millions of people living with HIV/AIDS. It will not only hamper access to medicines for Brazil's 500,000 people with HIV, but also many Third World countries who are hoping to import Brazil's cheap medicines and to accept Brazil's offer of knowledge transfer...
"Clearly, this is an attempt by the US government to intimidate Brazil and other poor countries attempting to break their dependency on multinational pharmaceutical companies. The complaint protects the interests of the multinational pharmaceutical industry and its exorbitant profits alone. It is not even in the interest of most people in the USA, who pay extremely high prices for pharmaceutical products."
WTO
The TAC called on the WTO to immediately convene its dispute settlement body and rule, in line with TRIPS, that any country is allowed to produce generic versions of essential drugs to protect public health and nutrition. "Failure to do this will demonstrate that the WTO simply defends the interests of the USA and multinational companies", the TAC stated.
The Western drug tsars fear that AIDS sufferers and public health authorities in the West, where the vast bulk of the drug combines' profits are made, will realise that life-saving drugs are massively overpriced and demand access to the cheaper generic alternatives. In 2000, the sales revenue from anti-retroviral drugs was US$3.4 billion.
However, the income derived from anti-AIDS drugs is just the tip of the iceberg for the drug lords. According to the pharmaceutical consulting firm IMS Health, the forecast total global pharmaceutical revenue for 2002 will be a massive US$406 billion, with almost 80% coming from the advanced capitalist countries (North America, Europe, Japan and Australasia). Western corporations control more than 90% of global patents on pharmaceutical products.
Third World generic pharmaceutical manufacturers could provide many necessary drugs at a fraction of the cost of the patented counterparts. Brazil's offer to transfer the know-how and technology of its pharmaceutical industry to other large Third World countries and South Africa, set alarm bells ringing in Washington. Hundreds of millions live in countries wealthy enough to emulate Brazil's example.
The US and European pharmaceutical giants and their governments — in the name of free trade — are using the WTO to try to destroy competition from Third World pharmaceutical companies, most notably from Brazil and India.
AIDS is not the only killer disease that is being allowed to decimate the world's populations for want of affordable medicines. In 2001, about 9 million people in the Third World will die of pneumonia (3.9 million), diarrhoea (2.2 million), tuberculosis (1.7 million) and malaria (1.1 million).
The central goal of the WTO TRIPS agreement is to restore the West's monopoly on new drugs. As Oxfam points out in its recent report, Patent Injustice: How World Trade Rules Threaten the Health of Poor People, the "next generation of front-line drugs which could treat [these] major killers ... will be patented. There will be no inexpensive generic versions available until after patent expiry — which under WTO rules is at least 20 years from the filing date ... Since it will be illegal to produce low-cost generic copies for at least 20 years, the major source of downwards pressure on prices [and Western profits] will be removed."
Washington, European governments and the giant Western pharmaceutical corporations fear that if Brazil's right to manufacture and export generic versions of patented anti-AIDS medicines to deal with national health emergencies is upheld, many Third World governments — and perhaps First World AIDS sufferers and health authorities — may follow their lead.