Bush's AIDS "policy"

This is a solid and cutting critique of the deceptively positive AIDS plan
put forth in the recent SOTUA, as well as the Pharma-industry in general:

Behind Dramatic Declarations: Bush's AIDS Plan
by Sanjay Basu

Winning praise from the editorial staffs of The Washington Post and The
New York Times, Bush's AIDS plan has been described as a wonderful
"surprise" to those working against the global pandemic--a turnaround from
previous policy, especially for a White House that has for so long been
strongly connected to the patent-based pharmaceutical industry. Even some
major NGOs sat back in awe at the prospect of a $15 billion contribution
to AIDS (including $10 billion in new monies) from the Bush White House.
The plan is to include treatment--not just prevention--with generic
medicines.

But behind the rhetoric of the State of the Union lay a much darker
picture of White House policy. In the fine print of the Bush AIDS proposal
is a consistently with previous policies: the plan, first of all, excludes
36 of the highest burden African countries from receiving funds.

The $15 billion is also spread over five years (making it about
equivalent to the rounding error on the defense budget), and nearly all
but $200 million a year will be routed through mechanisms other than the
Global Fund for AIDS, TB and Malaria. The Global Fund contribution, in
other words, is unchanged. This reflects a continuation of White House
policy to undercut the Global Fund (preventing future, multilateral
commitments) while claiming to support anti-AIDS efforts. Previous AIDS
funds have also been consistently directed to USAID instead of the Global
Fund--and USAID's programs (which almost totally exclude treatment,
except for four pilot projects) have become notorious for failing to
provide appropriate, comprehensive care, as well as for "lapsing" into
abstinence-based-prevention-mode. The funds seem to be magically
"redistributed" away to other programs periodically. The Global Fund,
meanwhile, has declared bankruptcy as of last Friday.

But an even darker part of this AIDS plan relates to its policy on generic
drugs. Bush declared that AIDS drug prices have lowered to $300 per
year--which is correct, if you are purchasing from generic manufacturers.
The problem is that the US Trade Representative (USTR) has threatened poor
countries around the world with trade sanctions (using what it calls the
Special 301 Watch List), forcing them to change their intellectual
property rules to be more stringent than those required by the World Trade
Organization. Two of the main types of antiretroviral drugs--nevirapine
and 3TC--will be illegal to import to 37 of the African countries covered
by the Bush proposal precisely because of the consistent pressure of the
USTR to prevent generic competition for the U.S. pharmaceutical industry.
While the Bush plan claims to support generic funding, the policies of the
USTR under Bush simultaneously undercut the possibility of actual generic
use.

The story doesn't end there. Last December, at a WTO council meeting,
trade ministers from around the world were to settle on the mechanism by
which poor countries without the capacity to produce medicines were to
import cheap generic drugs. In November of 2001, at the Doha conference of
the WTO, the USTR and other trade ministers signed a declaration to allow
"access to medicines for all" on the premise that intellectual property
should be secondary to public health. They decided to also agree to a
mechanism (by December 2002) that would determine how generics could be
produced for exportation to poor countries without manufacturing capacity.
Such a declaration sounds charitable, but the fact that it had to be
declared is bordering on perverse. No one bothered to mention that a vast
amount of the research and development on AIDS drugs (sometimes through
the clinical trial stage) was paid for through tax payer funds directed
through the National Institutes of Health (NIH) to divisions of the NIH
and to universities: d4T was researched under the National Cancer
Institute and Yale, ddI under the NIH, 3TC under Emory and Yale,
nevirapine under NIAID and the NIH, and AZT under the NIH and the National
Cancer Institute. Similar R&D histories exist for nearly all classes of
medicines.

But in spite of these facts, the December 2002 meeting turned into a
stalemate. Rather than decide on a clear mechanism to allow generics to be
produced for exportation to the poorest of countries, the USTR decided to
"reinterpret" the declaration made at the Doha conference, claiming that
it applied only to a limited number of diseases, and also claiming that
the countries most able to produce medicines could not export to poor
countries. Even the legal mechanism for allowing exportation was to be
woefully complex, effectively rendering generic competition impossible.
The talks broke down after the USTR refused to negotiate. Even the EU
trade minister blamed the USTR's stubbornness for the lack of access to
medicines, calling it representative of the pharmaceutical industry's
"stupid" position.

The industry, and the USTR, claims that generics would undermine the
capacity to pay for research and development--that is, the research and
development that American taxpayers actually foot most of the bill for.
The industry doesn't bother to release it's own tax information, however,
which reveals that Merck this year used 13% of its profits on marketing
and only 5% on R&D, Pfizer spent 35% on marketing and only 15% on R&D, and
the industry overall spent 27% on marketing and 11% on R&D according the
Securities and Exchange Commission. That's not accounting for the fact
that 52% of new drugs on the market aren't even the result of R&D, but are
"me too" drugs that are simple reformulations of old products slapped with
new stickers.

The industry still claims that generics will undermine its business, even
as it continues to be ranked by Fortune Magazine as the world's most
profitable industry for 11 years in a row (having profits as a percentage
of revenue nearly three times the rest of the Fortune 500 industry). When
confronted with the fact that Africa comprises only 1.3% of the industry's
revenues (making its loss equivalent to "about three days fluctuation in
exchange rates," according to an industry analyst quoted in The Washington
Post), the industry claims that generic drugs will get diverted to the
North to undermine its key markets, and cites GlaxoSmithKline's recent
loss of AIDS drugs sent to Africa as a case in point. But a look at the
GSK case shows that Glaxo failed to even track the shipments and only
discovered after a year that its packages to Africa had been shipped
improperly, allowing them to be smuggled to Europe. Tracking mechanisms,
however, seem to be no trouble for neighborhood flower shops. Indian
generic manufacturers, meanwhile, have shipped medicines for over two
decades without a single case of "diversion".

But based on the rhetoric--and the $20 million in campaign contributions
(hard and soft)--of the patent-based pharmaceutical industry, the USTR and
the White House have decided to continue their campaign against generic
drugs. While losing the support of even the EU at the WTO, the USTR has
decided that if it can't multilaterally cut off access to cheaper
medicines for the poor, it will do so through bilateral and regional trade
agreements. So the current draft of the Free Trade Area of the Americas
excludes key public health protections and creates mechanisms far too
difficult to achieve generic access. One common mechanism used by the USTR
is to force one country to have another country pass legislation for
exportation of goods. In other words, India's government would have to
pass legislation to authorize exportation of medicines from Indian
companies to Pakistanis. What a politically feasible plan! The USTR is
expanding such a model in a second agreement with a group of Latin
American countries, a plan for sub-Saharan countries, and for bilateral
deals with countries like Morocco and Jordan.

Cutting off medicine access isn't the only hypocritical part of the Bush
AIDS plan, however. The deeper problem is not just one of medicine
access--it's that the economic and social effects of the free trade
agreements are precisely those that spread AIDS. Epidemiologists and
physicians have agreed that the number one epidemiological correlate to
AIDS (and TB, and a number of other infectious and non-infectious
diseases) is poverty. We saw the nasty effects of NAFTA on the health of
Mexicans, and now the Free Trade Area of the America's (FTAA) deal will
expand that to the entire Western hemisphere. Migration in Thailand, as
Walden Bello has shown, resulted from IMF packages there that destroyed
rural agricultural systems and broke up families as laborers traveled to
Bangkok for work. Marriages split, women lost jobs and entered into
prostitution for work, and AIDS and TB spread among the poorest. The same
trends have been established elsewhere. The excessive focus on "individual
behavior" in public discourse on AIDS neglects the fact that most people
in the world--according to broad surveys--know how HIV is transmitted.
People scratch their heads at the continual prevalence of "risk behaviors"
in spite of this, but it's not so surprising. If there's no food on the
table, and prostitution is the only work available, doesn't prostitution
make sense? If Anglo American destroys agricultural systems to set up a
mine, and laborers from hundreds of miles away travel there for pittance,
spending six-to-seven days a week in all-male barracks, what happens when
the company decides to "keep the workers happy" by supplying them with
alcohol and prostitutes on breaks? The issue is not so much "behavior" as
much as the conditions under which such behavior occurs.

And so the Bush AIDS plan may seem miraculous, and indeed it does add some
funds to AIDS programs. But AIDS has become increasingly commodified,
treated as a problem that can be solved with declarations while the
broader public health and socioeconomic context in which it occurs is
ignored. And that is the real problem with the Bush AIDS plan: as one hand
provides a poor, leaky bandage, the other cuts deeper into the wound.