When multinational companies have -exclusive marketing rights over medicines, they tend to demand high prices which are often unaffordable to the vast majority of people living in developing countries - the price of a medicine is not determined by public health needs nor related to production costs.
It is now well known that there are massive differences in prices of anti-retroviral treatments, depending on whether the drugs are protected by patents or not. However, price is also a barrier for the efficient treatment of other prevalent diseases in developing countries, as they require the use of recent antibiotics which are still under patent.
Azythromicin is an antibiotic used to treat respiratory and sexually transmitted infections, which are among the most highly prevalent diseases in developing countries. In Kenya, azythromicin is - patented by the pharmaceutical company Pfizer and marketed under the trade name Zithromax®. The Kenyan trade price per 250mg capsule of Zithromax® was US$2.70 in October 2001. In India, where pharmaceutical products are not covered by patents, many generic manufacturers market azythromicin. Because of this competition, the Indian retail price for Pfizer's Zithromax® is much lower than Kenya's trade price: US$0.84 in March 2001 (3.2 times cheaper).
The TRIPS Agreement allows for parallel importation, which enables countries to obtain patented medicines at the lowest price available on the market. Developing countries must be allowed to use this legitimate mechanism to reduce the -overall cost of medicines. If Kenya were to parallel import India's cheaper Zithromax®, more than twice as many people could be treated on the same budget.
Furthermore, if the Kenyan government issued a compulsory license (another TRIPS safeguard) for azythromicin, generic versions of the drug could be imported from India, where retail generic prices range from US$0.39 to 0.54. Kenya could then treat 5 to 7 times more patients on the same budget.