Oxfam Launches Campaign Against Pharmaceutical Industry Pricing and Patent PoliciesOxfam International yesterday launched its "Cut the Cost" campaign against world trade laws on drug patents and the "high prices that western pharmaceutical companies charge for medicines in the world's poorest countries," singling out pharmaceutical giant GlaxoSmithKline, the London Independent reports. Oxfam is urging GSK, the world's largest pharmaceutical company after a $68 billion merger last year, to withdraw a legal challenge to "efforts by the South African government to import medicines from overseas at lower prices than the industry charges within South Africa." In addition, the charity is asking GSK to relinquish its patents in developing countries "if they make drugs unaffordable" and to donate 0.3% of its sales toward an international research fund run by the World Health Organization (Coyle, Independent, 2/12). The campaign comes a week after the World Trade Organization established a panel to review the legality of a Brazilian law that allows the South American nation to produce generic HIV/AIDS drugs (Toronto Star, 2/12). WTO provisions require all developing countries to establish patent laws by 2006 that will "make it easier for western companies to bring legal challenges against the use of generic competing drugs." International rules also allow developing countries to override patents in the case of "overwhelming public need," but most of these countries "lack the expertise and resources" to battle pharmaceutical companies in court. The Independent reports that Oxfam's campaign will "raise the public profile" of this issue "in the hope that the damage to the industry's reputation will hit the companies where it hurts, by denting their share prices" (Independent, 2/12). Oxfam Campaign Head Sophia Tickell said that shareholders will become "nervous" and morale will drop if the company is "repeatedly attacked over pricing and patent actions in the same way Shell was attacked for environmental policies in the Niger Delta and Nestle was attacked for promoting infant formula to poor women" (McNeil, New York Times, 2/13).
The Industry's Defense
Pharmaceutical companies argue that high prices on some drugs are "essential" to recover the costs associated with research and clinical trials, which are estimated at $500 million per drug. Oxfam acknowledged this argument, but cited cases in which companies "charge more for certain drugs in poor countries than in western markets," such as GSK's HIV/AIDS drug lamivudine, for which the company charges 20% more in Africa than in "many industrialized countries." The charity has also criticized GSK's participation in a program to provide drugs to Uganda and Senegal at reduced prices, saying that the company "has not spelled out the quantities it will make available and how long it will remain committed to the lower price." Justin Forsyth, Oxfam's policy director, said, "This is a wake-up call for GSK. The global pharmaceuticals industry runs a great risk if it continues to protect its profits and drug patents at all costs" (Independent, 2/12). Forsyth added, "This is the shadowy side of globalization. The balance has skewed too far towards corporate wealth rather than public health. Locally produced low-cost medicines are a lifeline for poor people" (Toronto Star, 2/12).
GSK vs. Oxfam
GSK Chair Sir Richard Sykes yesterday in an interview with BBC News said, "The issue is about intellectual property. The South Africans, for example, have signed up to something called TRIPS" -- an international trade agreement that states that countries that wish to take part in the global trade economy must respect the exclusive marketing rights of patent holders -- "which is about protecting intellectual property. Other countries have not." Sykes added, "Companies that make generic copies are pirates on the high seas, who can just take our drugs and say: 'Here you are. We have no investment in research and development, we can just make them -- and by the way, the standards and quality might be a bit "iffy" but there they are.'" Sykes continued, "Why should that happen? We don't believe in piracy -- we tried to stamp it out in the 17th and 18th centur[ies]. Why do we suddenly believe that we should allow piracy to take place, when we are offering these drugs to people at cost, which is better than the generic companies can do -- or we even give them away." Tickell said in response to Sykes' comments to the BBC, "Cheap copies of expensive drugs are the only option for poor people. For example in India, the vast majority of medicines used for treatment of malaria, tuberculosis, pneumonia are generic." In response to Sykes' research and development cost argument, Tickell said, "The U.K. companies, like other global pharmaceutical companies, mak[e] their money from sales in industrialized countries. The global pharmaceutical market recoups its R&D costs in developed countries. The availability of cheap generics in developing countries will not change this. Multinational drug companies must realize that people come before profits" (BBC News, 2/12).