In AIDS Of Profits

The United Nations, an organization considered more an irritant than a friend by the Bush Administration,did some stock taking this week on the occasion of the World AIDs Day. Secretary General Kofi Annan warnedthat action had fallen far short of words and that none of the goals set two years ago by the General Assemblyto fight the pandemic were likely to be met by 2005, the target year.

Things are not on track to reduce the scale and impact of the disease. The idea was to halve the rate ofinfection among infants and to cut by a quarter the number of young people infected with HIV in the worstaffected countries. With 10 new infections occurring every minute, failure stares the world community in theface.

Then in a direct jab at the Supreme Leader, Annan said there was no "us" and "them" in the world ofAIDS, only the silence of death. Annan’s anger stemmed partly from a vote in the General Assembly last monthon a resolution calling for greater access to medicines to fight AIDs and for national plans to make treatmentavailable to all.

That vote was 167 in favour and 1 (one) against. And that single, sole, isolated vote against theresolution belonged to George Bush. The compassionate conservative just didn’t find it in his heart to votefor anything that may remotely smack of a threat to the big pharmaceutical companies. Affordable access tomedicines for AIDs? How can they grant it and still be the most profitable of all companies in corporateAmerica, their return on investment the highest?

According to a Fortune 500 list, the 14 top pharmaceutical companies made a combined profit of over$37 billion last year. Each of the top four firms, Merck, Johnson & Johnson, Pfizer, and GlaxoSmithKline,had profits exceeding that of the entire Defense/Aerospace industry. Pfizer, for instance, almost earneddouble the entire Defense/Aerospace industry ($4.9 billion) by raking in $7.8 billion itself. According to anOxfam study, the top seven pharma companies have a market capitalization larger than India’s or Mexico’s.

Now consider this: the US is 24th in overall health according to the latest survey by the World HealthOrganization. Western European countries, where drugs are often much cheaper, consistently rank in the top 10for overall health. Many people in the US cut their pills in half or take medicine on alternate days becausethey can’t afford the exorbitant prices. On an average American patients pay double of what others might forthe same medicine in other countries.

And they will continue to do so because the pharma companies tell the US government how to vote -- and it’snever their conscience. The office of the US Trade Representative has often acted as the "official"negotiator for what the companies want, their position papers distributed widely by the powerfulPharmaceutical Research and Manufacturers of America (PhaRMA).

Four Indian companies are providing the anti-retroviral treatment for victims in African countries at afraction of the cost ($600/per patient/per year) compared to the nearly $15,000 it costs for the same therapyin the US. The right to produce generic AIDs drugs was won after a long, hard fight with the big companies.But distribution is still a problem because the big companies constantly try to intimidate small countries notto use cheaper, generic drugs.

The big pharma companies justify their enormous prices on the basis of the high R&D cost without whichthe "risky" and "innovative" work they so valiantly perform would be left undone. They have scared USpolicy makers and misled the world because their claim simply isn’t true. A study by Public Citizen foundthat the money drug companies actually spend on R&D is one-fifth of the figure they claim

Besides, many of the leading drugs are a result of publicly funded R&D through the National Institutesof Health (NIH). The study, based on government and industry data obtained from NIH, showed that governmentscientists conducted at least 55 percent of the research projects that led to the development of the fivetop-selling drugs in 1995.

Another harrowing fact: only about 22 percent of the new drugs introduced in the market over the past twodecades were really "new" meaning they were breakthroughs. The rest were "copies" dressed up andredesigned with no gain over the existing stocks. In reality, as several studies by concerned organizationshave shown, the pharmaceutical industry needs to keep prices high because it spends twice more on advertising,marketing and administration than on R&D.

The top executives have embarrassingly high salaries even by American corporate standards. In the year2000, Pfizer’s chairman William Steere made $40.2 million excluding the stock options. Bristol-Myers Squibb’stop man, C.A. Heimbold held $227.9 million in stock options alone. These men are leading the fight againstcompanies in India, Brazil and Mexico making generic drugs for the poor with a thin profit margin.