AIDS Crisis Has Spurred Public Relations Challenges for Pharmaceutical Industry, Wall Street Journal Reports
The international pharmaceutical industry is "reeling from an unprecedented wave of public scorn," with the recent lawsuit against the South African government representing "only the latest in a string of business and public relations setbacks," the Wall Street Journal reports in a front-page story. "Worst of all," the African AIDS epidemic has exposed how large a profit companies make on their drugs, "a secret the industry has steadfastly guarded for decades." The Journal states that by lowering the price of AIDS drugs in African countries to a point that they say yields "no profit," the companies "have revealed that some medicines are priced -- excluding research expenses -- at eight to 10 times their cost of manufacturing and distribution." Tim Fuller, executive director of the Gray Panthers, a seniors advocacy group, said, "All you have to do is look at how much they're selling drugs for in other countries to see how high they're jacking up prices in the U.S." For example, Merck is selling its protease inhibitor drug Crixivan in poor nations at $600 per year per patient, compared to $6,016 in the United States. Similarly, GlaxoSmithKline is selling its AIDS drug Combivir in Africa for $730, compared to $6,289 in the United States. The Journal reports that some companies prefer to donate their drugs at no cost rather than lower costs and potentially expose their profit margin. For example, Pfizer Inc. in December offered to donate its antifungal drug Diflucan to AIDS patients in South Africa. Mark Heywood, head of South Africa's Treatment Action Campaign, said, "If the company had lowered its price to what generic makers charged, it would have shown the world what its profits were. People elsewhere might have started wondering why it has to charge so much." But in their defense, drug companies warn that by meeting demands for lower prices and reduced patent protection for AIDS drugs, the same demands may develop for other disease treatments. GSK CEO Jean-Pierre Garnier said, "Isn't it ironic that the companies that brought the drugs to market are the ones being criticized for people dying?" (Harris, Wall Street Journal, 4/23).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.