Lou Dobbs, Call Your Office
July 14, 2004 8:10 AM   Subscribe

Lou Dobbs, Call Your Office If Lou Dobbs, the fair-trade crusader, only knew about this one! A few months ago, activists and journalists were blasting the U.S. for plans to buy only branded drugs, made by companies like Merck, to treat patients in poor countries under the president's $15 billion AIDS relief program[...] The result is that the way has been paved for U.S. taxpayers to spend billions to buy drugs made in India that are copies of medicines invented in the United States
posted by Postroad (31 comments total)
"Let's be clear. This unprecedented policy gives a big boost to companies in developing countries that specialize in ripping off U.S. drugs while those drugs are still on patent. How fair is that?"

Holy shit. How fair is that? How fair is it to put profits before human lives? And in any case, this goldrush is illusory:

Many critics see big pharmaceutical companies behind the Bush administration's preference for costlier brand-name drugs, conservative Christians behind its heavy promotion of abstinence, and hard-line unilateralists behind its decision to bypass the Global Fund to Fight AIDS, Tuberculosis and Malaria in creating its own plan.... the administration's refusal thus far to use its money to buy generics is complicating the roll-out of its own emergency plan.

Doctors Without Borders and the President's Emergency Plan for AIDS Relief (PEPFAR)... There is no medical or scientific basis for the Bush Administration's attacks against WHO prequalified generic medicines, and the U.S. is isolated in its view that WHO prequalification standards are not sufficient to guide national drug regulatory authorities and purchasers in assessing drug quality, safety and efficacy. The project is supported by other United Nations agencies including UNICEF, UNAIDS, and UNFPA as well as the World Bank, the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Columbia University MTCT-Plus Initiative, the Clinton Foundation, and frontline providers of treatment. The only possible explanation for the Bush Administration's position on WHO prequalification is that it is more interested in protecting the interests of the pharmaceutical industry than it is in expanding ARV treatment to the largest number of people possible.

posted by stonerose at 8:28 AM on July 14, 2004

Sounds good to me.
posted by Ethereal Bligh at 8:28 AM on July 14, 2004

I don't see what the problem is. That US money is going to help more people and less corporations? I mean, hell, you've gotta be really hard up to make the argument that it's better to serve American corporate interests than third-world human interests.
posted by dogmatic at 8:30 AM on July 14, 2004

I'd rather not see more jobs go overseas, but cheaper medicines have a priority. Particularly for Africa where AIDS is ravaging the place.
posted by destro at 8:30 AM on July 14, 2004

Sorry to clarify but let me get this straight. This Glassman fellow objects to a policy of buying drugs for use in the developing world - not in the States - from as cheap a source as is possible thus enabling as many people as possible to be treated. Instead he wants the drugs to be sourced from American companies holding still valid patents. Obviously this will reduce the number of people treated and lives will be senselessly lost.

This is clearly not about jobs but about American corporate profits being more important than African lives. I’m struggling not to use the c word in relation to this man but this epitomises what I abhor about the right; this is about money yet it’s dressed up as concern about jobs.

Randall Tobias on the other hand I would like to buy a beer.
posted by dmt at 9:13 AM on July 14, 2004

The only reason anyone is talking about it right now is because of the Bush's relief program.

"As our nation moves troops and builds alliances to make our world safer, we must also remember our calling as a blessed country to make this world better," he said. -NYTIMES

If there is a concern about how this is handled or if its not being taken seriously, is there any question where the confusion is coming from?

There are more problems to this solution then corporate profits. If some of these African counties had their way they would be getting a big fat check from Bush.
posted by xtian at 9:22 AM on July 14, 2004

Well, dmt, you might want to make that a lite beer...

Randy is one of America's most talented and respected executives. He was Vice Chairman of AT&T International and Chairman of ATT International, guiding the firm through immense organizational challenges. He went to head Eli Lilly and Company, one of our nation's largest and most innovative pharmaceutical companies.

Huh? Shouldn't an M.D. be heading the global HIV/AIDS response? This guy was a CEO for big pharma.

Mr. Tobias' experience as a pharmaceutical executive raises serious questions of conflict of interest in the procurement of the lowest-cost medicine. Mr. Tobias is not divesting from his holdings in Eli Lilly, one of the leading members of the pharmaceutical trade association (PHRMA). PHRMA has worked tirelessly to block AIDS sufferers around the world from having access to the lowest cost-generic medicine. In his testimony, Mr. Tobias misleadingly suggested that no further obstacles remained to providing access to the lowest-cost generic medicine in the developing world. Mr. Tobias' testimony raises serious questions about his fitness to serve as the AIDS coordinator. During his confirmation hearing, he misleadingly stated that the Global Fund could not effectively utilize additional funds. In fact, as he ought to know, the Global Fund requires billions more for its upcoming rounds of grants. Mr. Tobias testimony also revealed a rejection of comprehensive prevention strategies in favor of a policy giving priority to abstinence-only prevention. Responding to a question about the success of Uganda's balanced ABC approach to HIV prevention, Mr. Tobias clearly indicated that he would privilege abstinence and faithfulness over condoms as a means to prevent the spread of HIV despite overwhelming evidenced that a balanced approach to prevention is the most effective and best meets the needs of women and vulnerable groups. A well-balanced and fully funded US response to the HIV/AIDS emergency is needed now more than ever. For this reason, we respectfully urge your opposition to the nomination of Mr. Tobias.

Oh well... maybe he won't be so bad... after all, he's implementing expedited FDA approval for generic HIV drugs, right?

...until the recently devised U.S. PEPFAR policy was announced, there was no need for a generic company to obtain regulatory approval from the U.S. (or from stringent European, Canadian, or Japanese drug registration agencies) in order to register and sell its product in a developing country. Of course, the PEPFAR FDA rule changes all of that.... In addition, the U.S. and the U.S. drug
industry continue to espouse that clinical trials may be necessary to confirm the longer-term efficacy of a generic FDC [fixed-dose combination antiretroviral therapy], which miraculously, even though bio-equivalent, might somehow promote more resistance than an identical three-drug regime of single-dose products.... PEPFAR's pseudo-science of quality continues to confound a coordinated and proportionate response to the pandemic. Shame once again on ex-drug company exec, Randall Tobias, who should and does know much better.

In short (there is much more) this is largely smoke and mirror bullshit perpetrated by an administration full of corporate whores, at the behest of big pharma. You want to talk progress? Look at Canada's recent donation of $100m to the WHO 3x5 programme, a multilateral effort to get 3 million people on ARVs by the end of 2005.

On preview - xtian: nice false dichotomy. It's either give up the farm to those corrupt African regimes, or leave big pharma firmly in control, right? Wrong. The WHO and UNAIDS are the proper foci for states that want to take part in a productive, multilateral response. But the Bush administration has never really been about those values.
posted by stonerose at 9:30 AM on July 14, 2004

Reuters: About 50 protesters chanting "Bush lies, millions die" heckled U.S. AIDS coordinator Randall Tobias at a major international AIDS conference on Wednesday, delaying his speech by 15 minutes.

The protesters, who responded eventually to appeals from organisers to let Tobias speak, also carried a giant cheque to the speaker's podium, made out for $15 billion and payable to "big pharma & right-wing extremists".
posted by stonerose at 9:46 AM on July 14, 2004

The background to this issue is that the drugs are ridiculously cheap to manufacture. And drug discovery is not the big pàrt of the cost, either. A family member who works for a big pharma company tells me that corporate policy is now determined by the fact that a dollar spent on drug marketing generates much higher returns for the company than a dollar spent on R+D.
posted by fuzz at 10:09 AM on July 14, 2004

Big pharma spends much, [i]much[/i] more on advertising than it does on research, development, testing, manufacturing, and distribution.

Which is to say that most of the cost of purchasing a drug goes towards paying for its marketing.
posted by five fresh fish at 10:15 AM on July 14, 2004

You're right stonerose, this is not simple. Bush's approach is a simple solution to deep problems-- deep to need and red tape.
posted by xtian at 10:20 AM on July 14, 2004

Damn. I wish blogs and bbses and such would all settle on the reStructured Text markup standard.
posted by five fresh fish at 10:20 AM on July 14, 2004

Dr. Marcia Angell, former editor of the New England Journal of Medicine, wrote:

"Some underdeveloped countries, overwhelmed by the human immunodeficiency virus (HIV) epidemic and unable to afford brand-name antiretroviral agents, have sought exceptions to patent protections, so that they can manufacture or import generic drugs. The pharmaceutical industry, with the support of the U.S. government, has fought these efforts. The industry has also been notably uninterested in developing drugs to treat tropical diseases that afflict millions of people with low purchasing power. A recent story in the New York Times described the reluctance of manufacturers to maintain production of drugs to treat trypanosomiasis in Africa. According to a spokesman for one of the drug companies, "The industry has never been philanthropic. It has always produced products with an aim to getting a return on investment."
"The top 10 drug companies are reported to spend on average about 20 percent of their revenues on research and development. ... The top 10 drug companies are reported to have profits averaging about 30 percent of revenues -- a stunning margin. Over the past few years, the pharmaceutical industry as a whole has been by far the most profitable industry in the United States."
"According to its annual report, Pfizer spent 39.2 percent of its revenues on marketing and administration in 1999; Pharmacia & Upjohn is reported to have spent about the same."
"What about the picture of the drug industry as an exemplar of the free market? That image is very far from the truth. On the contrary, the pharmaceutical industry enjoys extraordinary government protections and subsidies."
"The industry also enjoys great tax advantages. Not only are its research and development costs deductible, but so are its massive marketing expenses."
posted by stonerose at 10:32 AM on July 14, 2004

Can anyone explain to me why the philanthropists don't develop, manufacture, and distribute their own drugs, and stop wrestling with the patent and profit issues?

If the industry enjoys all these government subsidies and tax breaks and so many of their expenses come from marketing and still they're just so goddamn disgustingly profitable that it makes people sick (literally), then why don't the philantropists get into the industry instead of constantly whining about how greedy it is?
posted by techgnollogic at 11:18 AM on July 14, 2004

and where are the drugs we take here manufactured?

This is an issue of price-gouging--HIV drugs are extremely expensive The average AIDS patient takes a combination of drugs that costs around $14,000. Yearly treatment for people in advanced stages of the disease costs between $20,000 and $27,000.

If an Indian manufacturer can make them for less money, it means more people will get them and live longer. It also doesn't affect people here, who could actually use those cheaper drugs, but will never get them.
posted by amberglow at 11:28 AM on July 14, 2004

In other words, techgnollogic: "There are 42 million people dying, but we'd like to keep making obscene profits. So, we're going to do everything we can to put a stop to the generic drug industry, which doesn't charge enough, and which cuts into our profits. You, the champions of the suffering, are free to start a company, come up with completely new HIV drugs, and compete with us. We'll do everything we can to put you out of business, but don't take that (or the dying kids) personally - it's just the invisible hand of the market."

The philanthropists ARE involved - in socially productive ways: donating to UNAIDS, the Global Fund for TB, AIDS and Malaria, and supporting efforts to buy generic drugs in order to bring this epidemic to heel. Would you rather they waited and implemented your idea?
posted by stonerose at 11:31 AM on July 14, 2004

"And if the fast-tracked drugs turn out to be unsafe, I expect the same protestors to start howling "genocide" at Dubya and the pharma industry."

Of course they will. Even if the drug is fast tracked and then badly manufactured they'll still blame the problems on the US... hell, they'll probably blame it on the drug companies for not spending a bunch more millions researching drugs that they will never now see a dime on.

Its the old story ya know? Someone is supposed to work their guts out, spend their money and invest their time and talen so someone can tell them they are greedy for expecting a return on all that. We see a lot of it these days.

That being said, there IS a lot of moral weight behind doing all we can to stop this epidemic. It's the right thing to do.

What is amazing to me is how people will complain about HOW the US spends all the hundreds of millions we are giving away to fight this thing and manage to call us "greedy" and "evil" because we aren't spending the money we are giving as essentially charity the way they want us to.

At this point it is such a common expectation to blame the US and expect us to foot the bill for solving the worlds problems (while complaining about every other move we make) that no one even feels it worth commenting anymore how much money we are dumping into this.
posted by soulhuntre at 11:33 AM on July 14, 2004

What I thought I had in mind when I posted this was not to stop drugs from reaching those in need but rather to point out that the US govt goes along with the drug industry in preventing Americans from buying drugs from Canada and elsewhere because the claim is that drugs made outside the country are unsafe, not be relied upon! Thus, an American pays more for a drug that can with ease be bought in Canada for significantly less--and it is the same drug made by the same company. Here thne the Govt is being hypocritical! it uses drugs made in India but refuses to make out-of-the-coutry drugs available for our elderly. ps: the two largest selling drugs (made by Pfizer) are made in Ireland! and not allowd to be bought via Canada!
posted by Postroad at 11:49 AM on July 14, 2004

and compete with us

What do you mean compete with them? According to what I've read in this thread and in links from this thread, these big greedy drug companies enjoy a 30% profit margin and their advertising is 20% of their expenses. If that's true, the philanthropists could break even at half price. I'm being told that the big drug companies don't like developing drugs for third-world patients who'll never be able to afford them - so where's the competition? Take the big drug companies out of a business they supposedly don't want to be in, and operate a non-profit drug companies funded by donations from all these philanthropists that care so much. Assuming I'm being told the whole story, why is that so difficult?

You're telling me that it's too expensive to develop and distribute these drugs at cost, but the drug companies should have to? Why?

What's keeping the philanthropists from making money on erectile-dysfunction pills and other bullshit cosmetic "quality of life" medications and using those huge profit margins to subsidize the treatment of epidemics in the third world? Why is it fair or reasonable to demand that someone else's business do so?
posted by techgnollogic at 11:54 AM on July 14, 2004

Why is it ok for an entrepreneur in India to steal a patented drug formula and get rich off of it by selling it to philanthropists, but the philanthropists can't steal it and manufacture it themselves?
posted by techgnollogic at 11:55 AM on July 14, 2004

trharlan (and techgnollogic, although I hesitate to engage with someone as wilfully dense as you), I know you want it to be that simple, but it isn't - otherwise, we wouldn't have trade and intellectual property lawyers. :-)

Here is a short primer on what has been happening.

Basically: according to the rules of international trade, countries are allowed to circumvent patent protections in order to deal with a public health emergency. It's not good practice for them to do this generally, because patents are important, and because it's hard to do business if you have a reputation as someone who, for example, nationalizes property at the drop of a hat. But in an emergency, countries are definitely allowed to take extraordinary measures.

So, while I certainly think the ends would justify the means even if this were theft, it is in fact not theft. The law is clear, and the Bush administration, as usual, is doing what it can to circumvent the law in order to ensure that large, U.S.-owned corporations profit.
posted by stonerose at 11:59 AM on July 14, 2004

But the FPP article says the $15 Billion will be used to buy drugs from anywhere - so what's Bush doing that's so wrong? Your Time link says he hasn't changed Clinton's declaration.

And how am I being dense? I think it's dense to act like the whole problem is that American drug companies are greedy assholes.
posted by techgnollogic at 12:17 PM on July 14, 2004

I'm not entirely sure that a corporation -- which is just an invention of law -- can truly be said to own a design, nor that the unapproved use of that design can truly be said to be theft.

I guess what I'm saying is that corporations are a rather abstract legal idea rather than a physical being. Can a mere idea be said to own anything?
posted by five fresh fish at 12:28 PM on July 14, 2004

What is the U.S. doing that's so wrong? According to Nobel-prize-winning economist Joseph Stiglitz (NYT): "...in negotiating the trade agreements with Morocco, Chile and other countries, the Bush administration has used the same approach that earned us the enmity of so much of the rest of the world. The bilateral agreements reveal an economic policy dictated more by special interests than by a concern for the well-being of our poorer trading partners.
The new agreement, many Moroccans fear, will make generic drugs needed in the fight against AIDS even less accessible in their country than they are in the United States. According to Morocco's Association de Lutte contre le SIDA, an AIDS agency, the agreement could increase the effective duration of patent protection from the normal length of 20 years to 30 years.

Morocco is not the only country that is worrying about access to life-saving drugs. In all its bilateral agreements, the United States is using its economic muscle to help big drug companies protect their products from generic competitors. For a country like Thailand, which is facing a real AIDS threat, these are issues of more than academic concern.

President Bush's policy in this area seems puzzling and hypocritical. While he talks about a global campaign against AIDS, and has offered substantial sums to back it up, what he is giving with one hand is being taken away with the other. Most Americans, I believe, would support greater access to life-saving generic drugs. The loss to the drug companies would be small, and must surely be dwarfed by the huge tax breaks they get."

And ('tho I'm sure you won't accept this, because it involves criticism from the cheese-eating surrender-monkeys, the French): Since Doha, Washington has adopted a bilateral trade approach which critics say could close the door on cheap AIDS drugs. "Making certain countries drop these measures in the framework of bilateral trade negotiations would be tantamount to blackmail," Darcos said....

Washington has already concluded trade deals with Jordan, Chile and Singapore which include provisions to strengthen patent protection for costly brand-name drugs.

Key to new deals under negotiation with Thailand and five countries in southern Africa -- the epicenter of the AIDS pandemic -- are thought to be five-year "data exclusivity" clauses that bar companies making generic medicines from the original developer's test data.

Without access to this data, generic drug companies would be unable to copy the AIDS medicines of the future, making long-term treatment of sufferers in the developing world unaffordable.

"These Free Trade Agreements contain provisions that will kill people with HIV/AIDS," said Asia Russell of Health GAP, an AIDS activist group. "Through stipulations included in the FTAs, the U.S. is putting patent rights over patient rights.

posted by stonerose at 12:42 PM on July 14, 2004

So these new trade deals close the "public health emergency" loophole you mentioned above?
posted by techgnollogic at 1:11 PM on July 14, 2004

I think it's dense to act like the whole problem is that American drug companies are greedy assholes.

No, that's not the whole problem, it's a straw man (which is unfortunately propped up by some of the anti-corporate ranters on the other side). The real problem is the practical failure of today's government regulation of the drug industry. The current system of financing drug discovery has ended up creating unintended incentives for companies to spend their energy and capital on marketing and on finding ways to limit the availability of their discoveries.

Today's intellectual property regime deviates from an open and competitive market, by providing a government-enforced limited monopoly on drug manufacturing and distribution to companies. The concept was that this monopoly would provide a financial incentive for companies to invest more in drug discovery. The practical result today is that people are dying because there is no free market in drug manufacturing.

Like any monopoly market, the current system generates excess profits to monopoly holders. Those profits come at the expense of people dying, even though it is economically feasible to provide them drugs at a reasonable profit over the manufacturing cost.

Manufacturing costs have plummeted. We are now at the point where it is possible to generate supply to meet the demand from people who are too poor to pay monopoly prices, but the current system does not allow a competitive market in drug manufacturing to emerge. Worse than that, the US is trying to impose its broken system of regulation on other countries.

As a point of comparison, most people wouldn't be able to afford a PC today if IBM had been able to prevent a competitive market for PC manufacturing by patenting its PC design. That free market has led to a better economic equilibrium for everyone, with lower prices and greater availablility, while still generating more innovation which has led to more overall profits in the market. The drug industry needs a similar system, not the extension of the current system that is designed to support the special interests of big pharma companies.
posted by fuzz at 7:06 PM on July 14, 2004

The shit on Jim Glassman.

Please note that Merck is a funder of TCS. See. It says so right on the about page.
posted by putzface_dickman at 7:16 PM on July 14, 2004

I think it's clear what's happening in this case, the drug companies are trying to use Governmental pressure to ensure profits in one segement of the business, but potentially with ramifications across all levels of business. If I wanted to solve this problem, and I were the CEO of a major drug company, I would introduce an entire unit of the company (or perhaps an industry-wide consortium) whose only goal is to develop drugs for public health emergencies, without regard for profit. True, they would only make up a small percentage of the total number of workers working on more profitable drugs, but I would not need to depend on government regulation for an large percentage of profits and would be standing on much higher moral ground to claim patent infringement on the drugs that are profitable. Also, goodwill means a lot in the long run in business. If your mission is greed, you will be successful, but there will be consequences.
posted by cell divide at 7:20 PM on July 14, 2004

July 14, 2004

US PHARMACEUTICAL group Merck signed an agreement yesterday to grant a non exclusive patent licence to local empowerment company Thembalami Pharmaceuticals to manufacture and sell a generic copy of its AIDS drug efavirenz.

The agreement means that Merck, the parent company of MSD in SA , becomes the third company to grant Thembalami a licence to produce and sell AIDS drugs.

UK company GlaxoSmithKline announced last week that it had issued a voluntary licence to Thembalami to make generic copies of its patented drugs lamivudine, zidovudine and a combination of the two.

In April German company Boehringer Ingelheim licensed Thembalami to make copies of its drug nevirapine. The licence agreements follow a competition commission settlement reached last year between pharmaceutical companies and AIDS activists.


Merck is offering Thembalami a royalty-free license to help further the goal of improving access to HIV/AIDS care and treatment.

posted by techgnollogic at 12:34 AM on July 15, 2004

Glaxo sets cheaper AIDS drugs

FRANKFURT (Reuters) - GlaxoSmithKline and Boehringer Ingelheim plan to offer the poor a cheap package of anti-AIDS drugs, Boehringer said Monday, as pressure grows on drugmakers to do more to fight the spread of the disease.
Multinational drugmakers have often been criticized for not doing enough to help solve the AIDS problem. They have responded by cutting prices by more than 90 percent in some countries, but face demands to cut prices further.

Humanitarian relief organization Doctors Without Borders said Monday further price cuts were needed for patients who develop a resistance to initial therapy.

Boehringer has in the past offered to give Viramune free to poor countries and GSK offers cheap anti-AIDS drugs in over 60 very poor countries.

posted by techgnollogic at 12:37 AM on July 15, 2004

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