91av

TODAY or tomorrow, a five-year-old child in a slum in Kenya will die
painfully of dysentery. This is not unusual. A thousand children in the world
die like this every day. And the toll is rising now that three-quarters of
the Shigella bacteria that cause dysentery resist treatment with old
antibiotics like ampicillin.

Yet over in neighbouring Uganda, amid similar poverty, another five-year-old
will get dysentery and survive. The difference: ciprofloxacin, a relatively new
antibiotic that still kills Shigella. In Uganda this lifesaver sells
for just seven cents a tablet. In Kenya, each pill costs $2.42, putting a
course of treatment utterly beyond the means of most parents.

And the reason for the vast price difference? Drug patents. All year a
conflict has been simmering about patents and the poor. Now it is about to break
as delegates and “anti-globalisation” street protesters converge on Genoa for
next week’s summit of the G8 nations. High on the agenda of the meeting is how
the rich world and its pharmaceuticals giants can get more lifesaving drugs into
the hands of the poor. But 91av has learned that the solutions
up for grabs could in the end deprive the poor of drugs instead of widening
access.

The situation in East Africa goes to the heart of the problem. Kenya has long
had laws respecting patents. Uganda hasn’t. So Kenya dutifully buys the patented
medicines it needs at premium prices from global chemicals giants, Bayer in the
case of ciprofloxacin. Uganda shops around for cheap “generic” copies, importing
them from countries like India, where patent laws are as liberal as its own and
small firms churn out patented drugs for just a few cents a pill.

Nobody is doing anything illegal. Lives are being saved. Yet within a few
years Uganda’s supply of those cheap drugs may dry up. That’s because world
trade regulations are slowly coming into force that will give countries like
Uganda and India only a few years, until 2005, to start recognising drug
patents. If they refuse they risk losing valuable export markets for their own
goods. That, say campaigners, could mean the death of the cheap generic drugs
industry—and yet more dysentery victims.

You probably thought the battle for cheaper medicines for the poor was all
but over. Faced with a PR nightmare a few months ago, the companies that make
patented AIDS drugs slashed their prices in Africa. Then drugs giant Eli Lilly
and others discounted expensive drugs used to treat antibiotic-resistant TB
(91av, 7 July, p 6).
And in June the UN announced a Global
Health Fund of $7 to $10 billion to fight AIDS, TB and malaria in
poor countries, much of it earmarked for drugs.

But scratch the surface and you find a grimmer picture. Total pledges for the
Global Health Fund barely reach a tenth of the target, while fierce patent
protection makes the newer drugs unaffordable for the developing world, which
increasingly needs them (see Table).

“As new diseases emerge, and pathogens become resistant to older drugs, the
poor need newer drugs,” says Ellen ‘t Hoen of the medical aid group
Médecins Sans Frontières. “Those are often too expensive.”

Worse, as the eight richest countries go to Genoa to debate how to make drugs
cheaper, deadlock looms. The US is at loggerheads with Europe over an EU
proposal, and both sides reject the one move campaigners believe would best
guarantee affordable drugs—giving generics manufacturers dispensation to
compete with the big multinationals in selling patented drugs to the poor after
the 2005 deadline.

Threats are already flying behind the scenes. The European Union says it will
withhold contributions to the UN’s Global Health Fund unless the drugs industry
agrees to a “global tiered pricing system”. Companies, it says, must
systematically sell to the fund, or in poor countries, for less than
patent-protected prices. But the US is having none of that. In late June, in a
letter seen by 91av, US Trade Representative Robert Zoellick
wrote to EU Trade Commissioner Pascal Lamy rejecting price tiering. Zoellick
said the US prefers to trust companies to offer the “lowest possible price”.

This, unfortunately, still results in comparatively expensive drugs. This
year Merck and other big companies that sell anti-HIV therapies in South Africa
lowered their prices from $10,000 a year to $1000. But Aurobindo,
an Indian generics maker, offers the same drugs in South Africa for
$295.

What’s more, while big drugs companies continue to give highly publicised
discounts with one hand, they are quietly strangling the competition from
generics manufacturers with the other. Last year drugs giant GlaxoSmithKline
attacked Cipla, a Bombay-based generics producer, for selling copies of its
patented HIV drugs for less than the company’s own discounted price. Cipla
suspended sales in Ghana and offered to pay GlaxoSmithKline 5 per cent of its
earnings in Uganda as a royalty—a move patent rules allow. The
multinational has not granted Cipla the licence. “They’re prepared to cut their
prices,” says Jamie Love of US pressure group Consumer Project on Technology,
“but what they really don’t want is competition.”

Being at the mercy of companies with such monopolies is unwise, agrees ‘t
Hoen: “You can’t deal with an access problem for 80 per cent of the world’s
population with ad hoc price discounts and drug donation.”

Oxfam, too, insists that simply using aid money to buy patent-protected drugs
for poor people will always be more expensive, for both donors and recipients,
than allowing the generics manufacturers to compete for customers.

Ironically, the international trade rules at the heart of the world’s move
towards a globalised free market permit such competition. The key
treaty—the Trade-Related Aspects of Intellectual Property Rights, or
TRIPS—allows a move called “compulsory licensing”. In theory, it means a
country can import a cheap generic drug for any reason it wants, as long as it
offers to pay the patent holder a fair share of any profits. In practice, few
countries have made use of compulsory licences—and they face the wrath of
rich governments and big business if they try.

Last year, the Thai government’s Generic Pharmaceutical Organisation wanted
to make an anti-HIV drug, didanosine, patented by US-based Bristol-Myers Squibb.
The GPO asked the Thai government to issue a compulsory licence to allow this,
but Thailand backed down under US pressure, including a letter from the US Trade
Representative calling such licences “undesirable”.

When the Dominican Republic was debating a law allowing compulsory licensing,
the EU and the US threatend to cut Dominican exports. In the end the law was
passed. “Now we’ll see what happens,” says Love.

There have been concessions. Last month the US withdrew its opposition to a
compulsory licensing law in Brazil that has held down the prices of HIV drugs
and is credited with slowing down the spread of the virus. And despite
opposition from the pharmaceuticals industry, Kenya has just passed a law
permitting compulsory licensing. “Now it just has to use it,” says Love.

If it does, Kenya could soon join Uganda and shop around for cheap dysentery
drugs for its children. But the shopping spree won’t last long. TRIPS is
supposed to apply in all countries by 2005. And when all countries respect
patents, there will be no cheap patented generics on the market. The Indian
generics manufacturers are widely expected to switch to producing more lucrative
drugs for rich countries.

Incredibly, the entire future of trade globalisation may hang on resolving
all this. A new round of negotiations for global trade rules begins in Qatar in
November at which developing countries are expected to ask for a suspension of
TRIPS on goods needed for public health. The pharmaceuticals industry says
that’s unacceptable—it insists that continued patent protection of prices
is vital to pay for the discovery of new drugs.

Yet developing countries account for only 18 per cent of pharmaceuticals
sales and an even lower proportion of patent revenues. Couldn’t one of the
world’s most profitable industries forgo patent protection in developing
countries in the name of humanity?

Everyone now agrees that people should no longer die needlessly simply
because they cannot afford drugs. But a global battle looms over whether the
entire world patents system will have to change before this can happen, or
whether largesse from drugs companies and governments is enough.

And every day that the arguing continues, another thousand children die
of curable dysentery.