Patents, prices & patients: the example of HIV/AIDS

This is an excerpt from an open letter regarding Free Trade Areas of the Americas (FTAA) sent by the US office of MSF in Spring, 2002. To read the full letter, download a Word document of the full text here.

Just two years ago, the average cost of a triple combination of antiretrovirals was between $10,000-$15,000 per patient per year, and today it is available for as little as $300 per patient per year. These price reductions were the direct result of international public pressure and generic competition.

According to the World Health Organization, there are currently 1.8 million people living with HIV/AIDS in Latin America and Caribbean, and 110,000 AIDS deaths were recorded in the region in 2001. The Caribbean is the second-most affected region in the world, after sub-Saharan Africa.

In several Caribbean countries, HIV/AIDS has become a leading cause of death (footnote 1). The AIDS epidemic is having major consequences for tropical infectious diseases in the region, such as Chagas disease (American trypanosomiasis) and tuberculosis. Hundreds of thousands of people with HIV/AIDS in developing countries in the Americas do not have access to antiretroviral therapy which, in wealthy countries such as the U.S., has dramatically extended and improved the lives of people living with HIV/AIDS, reducing AIDS-related deaths by over 70% (footnote 2) —simply because they cannot afford it.

Price is not the only reason that people do not get the medicines they need, but it is a major barrier. As MSF and other non-governmental organizations have been pointing out for over two years, the high cost of medicines is often linked to patents.

Patents give their owners a monopoly to use, manufacture, sell, and import the patented product and therefore to sell it at the most profitable price, which may not be the most equitable price in most developing countries. As shown in the table below, generic competition is crucial to ensuring downward pressure on drug prices—as we have witnessed in countless instances in the field, particularly with antiretrovirals for the treatment of HIV/AIDS.

ALT

Just two years ago, the average cost of a triple combination of antiretrovirals was between $10,000-$15,000 per patient per year, and today it is available for as little as $300 per patient per year. These price reductions were the direct result of international public pressure and generic competition, particularly from Indian and Brazilian manufacturers.

Generic competition was possible because of the lack of patent protection in those countries. In the coming years, such competition will not be possible due to the filing of patents on pharmaceuticals in key developing countries with manufacturing capacity, unless flexible conditions for granting compulsory licenses are available, as per the Doha Declaration, and compulsory licenses are routinely issued to address public health concerns. Compulsory licensing of pharmaceuticals is one of the most important policy tools for ensuring generic competition.

The case of AIDS drug prices helps illustrate what is to come when all new pharmaceutical products will be patent protected in 2006, after most WTO members have implemented the TRIPS Agreement (Footnote 3). For all these new medicines, generic competition will be stamped out. As a consequence, prices of new medicines will inevitably shoot up, far beyond the means of patients in need. The lever that has brought the price of AIDS drugs down will be lost.

Footnotes:

1 - EPIupdate2001_en.doc - Accessed April 20, 2002.
2 - According to the U.S. National Institute of Allergies and Infectious Diseases (at the National Institutes of Health) and the Centers for Disease Control and Prevention, the estimated annual number of AIDS-related deaths in the United States fell approximately 70 percent from 1995 to 1999, from 51,117 deaths in 1995 to 15,245 deaths in 2000. This drop is attributed primarily to the introduction of highly active antiretroviral therapy (HAART). Centers for Disease Control and Prevention (CDC). HIV/AIDS Surveillance Report 2001; 13 (no.1):1-41.
3 - Recently extended to 2016 for least-developed countries, as per the WTO Declaration on the TRIPS Agreement and Public Health, available at here