Tax Break to AIDS Drug Makers Would Encourage Price Cuts in Developing Nations, Kessler Says
President Bush has a "rare opportunity to change the world" by granting pharmaceutical companies a tax break large enough to encourage them to distribute free AIDS drugs in developing nations, the "only price most who live there can afford," former FDA Commissioner and current Yale School of Medicine Dean David Kessler writes in a USA Today op-ed. Writing in the form of a letter to the president, Kessler continues, "If you act, other pieces of the international AIDS battle could fall into place," adding that developing nations and nongovernmental organizations will find ways to manage drug delivery if medications are available. Kessler estimates that tax subsidies of roughly "$500 per patient in developing nations" -- or less than $20 billion per year -- would be enough for the companies to cover their costs and provide drugs for free, calling that figure "not too high a price to forestall the illness, hospital care and death of 35 million people." Further, Kessler says, tax breaks carry neither the "controversy of eminent domain nor the misery of a pure laissez-faire market," and they could be implemented quickly, then reviewed in a few years after newer drugs and vaccines will likely have entered the market. While drugmakers worry that cutting overseas prices will force lower prices in the United States, Kessler writes, "U.S. prices are not driven by those in the Third World. Nor is it likely that cheap overseas drugs will be resold here, especially if we stringently enforce import laws." He concludes, "If you act, others will follow. ... Few leaders have a chance to do something so bold, so important -- and so good" (Kessler, USA Today, 4/5).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.