Current Issue

In Praise of Illegal Drug Trafficking
By Michael Astor
Is the battle against AIDS changing the idea of who "owns" lifesaving drugs?

Think of Nubia Boechat, MD, as a topflight bartender in reverse. Instead of putting together complicated cocktails, she takes them apart to find out what they’re made of. Only the cocktails Boechat deconstructs aren’t alcoholic beverages, they’re antiretroviral medications used to fight HIV/AIDS. Thanks to Boechat’s work at the Brazilian government’s Far-Manguinhos laboratory, a drug like Nevirapine can be produced for around 5 percent of the US price: US$204 instead of US$3,891 for a year’s supply. Brazil manufactures seven of the 14 drugs it distributes and uses the threat of manufacturing the rest as a bargaining chip to negotiate dramatic price cuts with the multinational pharmaceutical companies that hold the patents,
resulting in savings that have allowed the government to give antiretroviral medications away.
     Since 1997, the Brazilian government has been handing out free drug cocktails — as the combinations of three or more drugs needed to keep the HIV virus in check are known — to anyone who needs them. Thanks to the handout, Brazil has been able to cut the number of its AIDS-related deaths in half, from 11,024 in 1997 to 4,136 in 2002, the last year for which statistics are available. Brazil’s program has been hailed as a Third World treatment model by the United Nations.
     But manufacturing lifesaving generic pharmaceuticals is, some would say, as illegal as the drug trafficking carried out by the heavily armed gangs in the favelas that ring the Far-Manguinhos laboratory on the outskirts of Rio de Janeiro. Because the formulas for the drugs are protected

Paulo, 48
PHOTO BY Paulo Fridman
by intellectual property laws, making cheap copies of patented drugs could present a major legal problem — even if it helps save lives.
     Pharmaceutical companies argue that these patents, which give them the exclusive worldwide right to manufacture their trademarked drugs for 20 years, are necessary if they are to continue innovating and creating newer and better drugs. But still-to-be-developed drugs mean little to those who can’t get their hands on those already invented. “I was lucky enough for the government to start giving out the drugs just when my health was beginning to deteriorate,” says Flavio Guilherme Pontes, 37, one of the 130,000 Brazilians who receive the free cocktail of anti-AIDS medications. “My friends in Peru and Argentina don’t have access to anything.”
     Pontes, who has been an official spokesperson for the Ministry of Health, is doing better than ever.
Brazil has
helped make antiretrovirals cheaper worldwide because it proved that
it is possible
to make a
triple drug combination
for less
than US$3,000 per person
per year.
After receiving the cocktail, his weight climbed from a skeletal 103 lbs to a healthy 150 lbs. And his Kaposi’s sarcoma, a rare form of cancer that often accompanies AIDS, hasn’t come back after being treated with expensive chemotherapy.
     Brazil can afford to keep giving out cocktails because it doesn’t respect patents on AIDS drugs produced before 1996, when the country passed its intellectual property laws in order to join the World Trade Organization. Still, an estimated 600,000 Brazilians are infected with HIV/AIDS, and currently fewer than a fourth of them are receiving the free cocktail — either because the disease is still in the initial stages or because people don’t yet know they are sick. As time goes by, the number of Brazilians needing AIDS treatment will only grow, and so will the costs. These discounts are sufficient to keep the giveaway
program affordable through 2005. “But after that,” says Alexandre Grangeiro, director of Brazil’s anti-AIDS program, “ either drug companies will have to cut prices further or we will have no alternative but to begin producing the drugs ourselves.” Brazil is reluctant to take such a step, because it would mean taking advantage of a WTO “health emergency” clause, which would strongly compromise the government’s relationship with the pharmaceutical industry at large.
     Brazil’s anti-AIDS program has helped make antiretrovirals cheaper worldwide because it proved that it is possible to make a triple drug combination for less than US$3,000 per person per year. Since then, many pharmaceutical companies have cut prices for developing countries. But even at reduced prices, treatment would still be out of reach for about 80 percent of HIV-infected Brazilians if the government did not provide the drug cocktail for free. The

Rafaela, 10
PHOTO BY Paulo Fridman
situation is even worse in countries like Malawi, where almost one in seven adults has been infected with the disease and the annual per capita income is about a twelfth of what it is in Brazil.
     Maybe the oddest part of the equation is that treating patients with the cocktail is cheaper than not treating them. Grangeiro estimates that by providing the cocktail, Brazil has saved some US$2 billion in hospitalizations and the cost of medicine for the opportunistic infections that accompany AIDS. So why don’t other governments follow Brazil’s lead? The answer is largely bureaucratic: it’s always easier for politicians to fritter away billions of dollars in dribs and drabs than it is to commit huge sums of money, like the US$200 million Brazil spends every year on the antiretroviral drugs in an annual budget. And many countries don’t have the means to manufacture their own cheap generics.
     Patents don’t only keep prices up by giving drug companies a virtual monopoly, they also create other problems. Because different companies own the patents for each of the AIDS drugs that go into the cocktail, patients have to take several different pills, often at different times of day. In India, which won’t be respecting drug patents until 2006, companies are combining the drugs into one easy-to-take pill. India has begun distributing its generic pill to several African countries, but countries that want to take advantage of the US$15 billion in AIDS-relief funding promised by the Bush administration are required to respect international patent laws. So most poor countries can forget about getting their AIDS drugs in a single dose. “This is a classic case of intellectual property being at odds with health concerns,” says Michel Lotrowska of Doctors Without Borders. “You can’t put three drugs together in a single pill, because
the patents belong to three different companies. A single dose isn’t only easier for the patients, it costs about a quarter of the price. In places like Africa, the single dose is essential.”
     That US$15 billion promised by the Bush administration will keep many countries from taking advantage of a law recently passed in the Canadian senate allowing that country’s pharmaceutical industry to produce cheap generic versions of many patented drugs.
     Pharmaceutical companies argue that if they lower prices too much in the developing world, there will be a clamor for lower prices in developed countries. That may not be such a bad thing, though. “Because we reverse- engineer the drugs, we know how much it costs to make them. Compared to what the companies charge, it is significantly less. It’s not necessary to raise prices in the United States and Europe to sell anti-AIDS drugs in developing nations and still
maintain a profit margin between 10 and 20 percent,” explains Grangeiro.
     Even if the drug companies aren’t in business to save lives, aren’t they in business to make money? The pharmaceutical companies’ logic seems puzzling in a free-market context. By pricing themselves out of the market, they’re losing millions of potential customers. But to be fair to the drug companies, they need to make some sort of profit, otherwise they may not be able to find a cure for some really serious disease — like, well, AIDS.  

Back to Table of Contents