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Big fuss over big pharma

By Andrew Hewett - posted Tuesday, 31 July 2007

As Australians we expect our government to provide us with medicines that improve health and save lives. Good health is, after all, arguably what we all cherish most in life. No surprise then that people in less developed countries also want to have universal access to medicines, especially to treat HIV and AIDS. Yet at a major international conference on AIDS last week in Sydney, the news from the developing world was bleak.

The world’s largest pharmaceutical companies are working to prevent developing countries from reducing the price of high-cost medicines. Put simply, in some cases “big pharma” places profits before lives.

Spending on health care is limited in most developing countries, particularly those ravaged by HIV and AIDS. People are forced to pay out of their own pocket to meet some or all of their health care costs. And that means high prices for life-saving anti retro virals, ARVs, can make the difference between life and death for poor people.


Thailand, for example, has been a model of HIV treatment across the developing world. Years before some western governments, pop stars and corporations campaigned for the rights of poor people to have universal access to treatment, Thailand was treating thousands living with HIV as well as rolling out massive education and prevention programs.

Admittedly many people have died or suffered from HIV in Thailand. But thousands of new infections have been prevented and 80,000 Thais, many of whom are poor, are alive today thanks to government sponsored treatment and the affordability of first line anti-retroviral medicines. Sadly though this didn’t last. Pharmaceutical companies jacked up the price of second line anti-retroviral drugs beyond the reach of poor people who had become resistant to earlier generation drugs.

The Thai Government faced a difficult decision. Accept the price hike but severely limit treatment to people living with HIV; or act out of compassion and ensure no one was denied access to life saving medicines through issuing what’s known as a compulsory license to import or produce a generic version of the medicine. Thailand chose to save lives, thereby provoking fierce responses from some multinational drug companies.

Abbott Pharmaceutical de-registered seven medicines from the Thai market, effectively withdrawing them from sale. One medicine was a heat-stable version of Kaletra used to treat patients in tropical areas where there is little or no capacity to refrigerate medicines, such as in rural Thailand.

But that’s not all. Since Thailand acted to protect the lives of vulnerable people, members of the US pharmaceutical industry lobbied the government to bully Thailand to capitulate. As a result the US Government placed Thailand on its “most wanted list” of intellectual property violators. And that opens the door to the US slapping future trade sanctions on Thailand.

Despite big pharma’s strong arm tactics, the Thai Government’s decision to stand between big corporations and its vulnerable people has paid dividends. Abbott had to reduce its worldwide price for Kaletra by more than 50 per cent and Thailand now has access to a cheaper version of the medicine. The government’s treatment of thousands of existing and new patients is assured and, with the savings, there are even plans to launch a new prevention program to prevent thousands of Thais from contracting HIV.


Meanwhile competition between pharmaceuticals to produce generic medicines has reduced the cost of first line HIV medicines by up to 80-90 per cent. Today, Indian companies supply much of the world’s ARVs needed to keep people living with HIV and AIDS alive. Even the US Government relies heavily on India’s cheap generic medicines. Indeed as much as 80 per cent of the medicines used in the US AIDS program, which treat nearly one million AIDS patients globally, are manufactured in India.

Although the Australian Government has said little recently about big pharma’s impact on the people of developing countries, it has committed $600 million over four years to treat and prevent HIV and AIDS in our region. But if Australia fails to act to prevent the harmful actions of some pharmaceutical companies, taxpayer dollars will continue to be spent subsidising the high prices demanded for ARVs by multinational pharmaceuticals.

The cost of second line ARV treatment is set to become a major issue in delivering medicines and care for people living with HIV and AIDS. And it’s time that a responsible global citizen, such as Australia, took decisive action to guarantee the supply of cheap drugs to the world’s poor where ever and whenever needed. After all, what better way is there of saving lives than to ensure Australian aid dollars are spent efficiently on low-cost generic drugs?

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About the Author

Andrew Hewett is Executive Director of Oxfam Australia.

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