Despite ‘Public Relations Beating,’ Pharmaceutical Companies Continue to Thrive, American Spectator Reports
Although pharmaceutical companies have taken a "public relations beating" over the price of AIDS drugs in sub-Saharan Africa, activist groups leading the criticism hope to spur the "abandonment of patent rights," not "free drugs for poor people," the American Spectator reports. According to the Spectator, consumer organizations such as South Africa's Treatment Action Campaign and Ralph Nader's Consumer Project on Technology -- run by James Love -- "actually resist philanthropic offers." One group, for example, "disparaged" Pfizer Inc.'s offer to donate to South Africa the drug Diflucan, a treatment for AIDS-related fungal infections, while "ecstatic" activists cheered Bristol-Myers Squibb Co.'s decision to stop enforcing patent rights on the antiretroviral drug d4T. The Spectator asks rhetorically, "Wouldn't [abandoning patent rights] stifle the next round of yet-to-be-invented life-saving drugs?" but answers that this issue is "[n]ot Nader's concern." An unnamed vice president with one of the "bigger" drug companies admitted, "[AIDS], probably more than any other [disease] in the history of mankind, has been subject to politics ... when it comes to engaging in politics, we're bad at it." The Spectator reports that drug firms have "yet to figure out how to prevail, at least in PR, over those who seem virtuous mainly because they earn nothing."
Money for Nothing
Despite "adverse publicity," drug companies have raked in "tons of money," with share prices "holding up." However, pharmaceutical firms "never thought of themselves as having a stake in Africa, nor much of one in AIDS generally." The unnamed pharmaceutical executive said, "I think it's fair to say no research-based company is going to live or die at the margin by antivirals," pointing out that the "real money" lies in anti-hypertension, cholesterol and pain drugs, as well as antidepressants, antibiotics and "all the rest." According to the Spectator, pharmaceutical companies' sales worldwide tally about $200 billion annually, with Africa accounting for just 1% and AIDS medicines 2.5% of drug sales. Drug companies could "give [AIDS] drugs away" in Africa, the Spectator reports, adding, "It's not so much the cost of giveaways or forgone sub-Saharan sales, but the slippery slope. If these drugs can be made available in poor countries, why not other drugs? And if drugs can be cheaper abroad, why not cheaper at home?" The pharmaceutical executive added, "Now it's not just AIDS [that is] pressing us on, but communicable diseases, malaria and tuberculosis." Meanwhile, drug companies spend $600 million to bring a new treatment to the market, with only one in 5,000 potential drugs moving through the "12-year testing and approval pipeline." In addition, "increasing competition" between pharmaceutical firms -- "even when armed with patents" -- "means the life-span of market exclusivity is not what it was," the Spectator reports.
Let's Make a Deal?
Still, the Spectator reports that drug firms may establish a "kind of Marshall AIDS Plan," with the Organization for Economic Cooperation and Development and the European Community purchasing and distributing medicines -- a deal that may "keep everyone happy except taxpayers." In the United States, pharmaceutical companies have "resisted" a prescription drug benefit under Medicare, fearing that the government, by becoming the "dominant or 'monopoly' buyer," would "soon dictat[e]" prices. However, they have raised "no objection" to government reimbursement of antiretrovirals under the AIDS Drug Assistance Program, which costs taxpayers $750 million per year. Meanwhile, the Spectator reports that the Consumer Project on Technology has formed a not-for-profit company that will "soon ask the government to allow it to make a low-cost version of d4T," an AIDS drug sold in the United States for $10 per day, as well as cancer drugs and other medicines. The Spectator reports, "Ralph Nader and Jamie Love want to go into the pharmaceutical business themselves? Interesting! Why ... [would] the commercial exigencies of selling, even as a not-for-profit, ... end their supposed moral superiority?" (Bethell, American Spectator, May 2001).