Gore article - by Ralph Nader

[Shivan Mehta <shivan.mehta@yale.edu>]

July 22, 1999
By Ralph Nader
______________________

     For years, consumer activists have asked Al Gore to reverse
the U.S. policy of punishing developing country governments that
tried to make essential medicines more affordable for sick
people. And Gore ignored the calls.
     Matters suddenly changed on June 16 when a small group of
AIDS activists began clamoring and demonstrating at events by
Vice President and presidential candidate Al Gore.
     The activists focused on Gore because he oversees a
U.S.-South Africa binational commission. The United States has
used the commission meetings and structure to exert enormous
pressure on South Africa, urging the country to abandon efforts
to promote generic drug competition in AIDS and other essential
medicines that are priced out of reach of most consumers.  (The
United States has similarly imposed or threatened trade sanctions
against other countries seeking to take steps to make essential
medicines more affordable.)
     With the protests prompting some of the major media to wake
up and pay attention to this critical issue, Gore and the
pharmaceutical industry have issued a series of defenses of the
retrograde U.S. position on the pharmaceutical access issue.
The underlying question is countries' rights to employ compulsory
licensing and parallel import policies.
     Compulsory licensing involves a government giving a
manufacturer a license to produce an item for which another
company holds a patent or exclusive rights, in exchange for the
payment of a reasonable royalty to the patent holder. The effect
is to introduce generic competition, and drive prices down.
     Parallel imports involve a government or other party
shopping on the world market for the lowest priced version of a
product, rather than accepting the price at which it is sold in
their country. In the pharmaceuticals market, prices tend to vary
dramatically between countries.
     Gore and the industry's first defense was that compulsory
licensing and parallel imports are bad because they decrease drug
companies' profitability and thereby hurt their research efforts.
But Gore, at least, soon abandoned that argument -- an especially
weak claim given that Africa constitutes on the order of 1 or 2
percent of the global drug market, hardly enough to affect the
industry's R&D expenditures.  Now the industry is emphasizing
that lower prices for drugs will not be sufficient to solve the
global AIDS plague which is now killing more than 2 million a
year. This is surely true -- poor countries desperately need to
emphasize AIDS prevention and education. But for those infected --
up to 25 percent of the population in some African countries --
access to affordable drugs is vital. Without access, virtually
all people with AIDS are sentenced to die.
     The industry trade association, PhRMA, is also trotting out
the line that making drugs affordable to poor people may create
drug-resistant strains of the AIDS virus. The concern is that
poor health care systems will prevent proper administration of
the drug treatments, and mutant strains will develop that are not
susceptible to pharmacological treatments.
     But as Dr. Peter Lurie of Public Citizen points out,
virtually everyone now who goes without drugs will die --
drug-resistant strains, which are no more aggressive than non-
resistant ones, can't make things worse for them.  "If the
problem is lack of infrastructure, the solution should be
improving infrastructure, not denying poor people life-saving
medicines," says Lurie. "One would never withhold effective
therapy for tuberculosis or malaria for fear of inducing drug
resistance.  Why should AIDS be any different?"
     Moreover -- some kinds of treatments, for particular
AIDS-related infections, or short-course treatment to prevent
mother-to-child HIV transmission, are easier to administer -- and
could save many lives and ease considerable preventable
suffering.
    In late June, with pressure building, Gore told the
Congressional Black Caucus that he supported South Africa's right
to use the controversial policies of compulsory licensing and
parallel imports. But, he said, in employing these policies,
South Africa must comply with the international trade rules
established by the World Trade Organization (WTO).
    That was a disturbing caveat, which leaves unclear the real
meaning of Gore's statement. At times, the United States has
argued that compulsory licensing and parallel imports are not
permitted by the WTO. No serious and honest trade lawyer believes
this to be the case, however. Is Gore still making this claim?
    It is true that the WTO sets certain technical conditions for
countries to employ compulsory licensing. But South Africa has
repeatedly pledged that it will ensure that its compulsory
licensing policies comply with WTO rules. Since South Africa has
not yet issued a compulsory license, it is hard to know what more
the government could do satisfy Gore --  if his proclaimed respect
for South Africa's right to use compulsory licensing and parallel
imports is genuine.
     In the policy world, talk is cheap. One in seven South
Africans is HIV positive. Twenty-two million Africans are
estimated to be infected with HIV/AIDS; and eight million more
are infected in Asia and Latin America.
     Yet the U.S. Trade Representative (USTR), Charlene
Barshefsky, insists on placing South Africa on the "watch" list
for countries supposedly interfering with U.S. trading rights,
and is even conducting a special, out-of-cycle review of South
Africa. Other countries have received similar treatment for
pursuing policies similar to South Africa's.
     If Vice President Gore wants the public to believe his
claims of compassion for those with HIV/AIDS in the developing
world and his asserted respect for countries' right to undertake
policies to make drugs more affordable and to save lives, then he
must see that the abhorrent U.S. policy is changed.