[Ip-health] Statement of Bill Haddad at EC Roundtable

[Mike Palmedo]

Statement of William F. Haddad, Representing Cipla and Biogenerics, Inc.
Chairman/CEO Biogenerics, Inc. at the EC Roundtable, Brussels, April
28th, 2003

"Have We No Shame?"

In this place, at this forum, on September 28, 2000, Dr. Hamied of Cipla
promised to provide AIDS medicines at affordable prices. At that time,
the price for a year's treatment in the poor nations of the world,
ranged from a prohibitive $12,000 to $15,000 per patient. Cipla has now
reduced the price to $300 and other generic companies followed with
similar reductions.

Here today, in this forum, we reiterate what was pledged in September,
2000: we remain committed to providing medicines on a humanitarian basis
to combat and alleviate the pain and suffering of HIV-AIDS victims.

As President Bush acknowledged in his recent State of the Union message,
the price of $300 a year now made it feasible for the United States to
contribute fifteen billion dollars to the worldwide effort. That was a
remarkable pledge for a nation with unmet needs of its own.

Here today, in this forum, we reiterate what was pledged in September,
2000: we remain committed to providing medicines on a humanitarian basis
to combat and alleviate the pain and suffering of HIV-AIDS victims.

What has happened in the interim between September, 2000 and our meeting
today? The scale reads between "nothing and not much." The statistics
tell the story.

Three years ago, between less than 20,000 HIV or AIDS patients were in
treatment in sub-Sahara Africa. Now, a hundred or more Conferences and
Commitments later=85of the 30,000,000 persons afflicted=85only 50,000 are i=
n
treatment. Everyone in this audience knows that 8,000 people die each
day in Africa of AIDS and its consequences every day, many of them
innocent children.

In Barcelona last year, former President Clinton summed up the lingering
tragedy in one sentence.

"=85we have the medicines to convert a certain death sentence into a
chronic illness and we are not using them=85"

And this from President Bush: "=85seldom has history offered a greater
opportunity to do so much for so many=85"

In the response to these comments, haw can the world leaders continue
the endless debate over what needs to be done? At times it sound to me
like the erudite debate of how many angels can dance on a pinhead.

What prevents us from taking positive and realistic actions that will
deliver the medicines to the patients dying from AIDS?

First, in medical terms, what is the demand?

 From my "boots on the ground" experience in AIDS plagued nations, two
low priced, readily obtained medicines are in urgent demand: an
affordable generic triple antiretroviral similar to Cipla's Triomune and
Nevirapine in suspension.

(For the media here, the triple tablet is used twice a day. Cipla has
also developed a one-a-day version. These treatments=85 circumventing the
complicated regime formerly required=85 can keep a patient alive to enjoy
a good quality of life until a vaccine or a cure is found, either by a
University, or a chance discovery, but more likely by one of the
multinationals.

(Nevirapine administered to the mother during childbirth and the newborn
afterwards=85.one dose for each=85 can reduce the chances of passing the
virus from mother to child from fifty to ninety percent...

(We have also gone beyond generics, creating triple ARVs that the AIDS
clinicians' desire, but products the multinationals, to date, cannot
clone due to their unwillingness or inability to cooperate across patent
restrictions. These are legal barriers we can cross both legally and
commercially in many third world and developing nations.

(The World Health Organization has also instituted a pre-qualification
standard for AIDS medicines that includes review of scientific data, on
site inspection of the plants producing the medicines, and of the final
product itself to certify that the medicines are safe and effective and
the process and the plant conform to current GMP requirements).

Yet these generic medicines=85the triple ARV and suspension
Nevirapine=85that sell at a fraction of the multinational cost=85 sit,
unused, in warehouses around the world. Facilities dedicated to their
production are often idle.

I fully understand that in Africa even $300 a year per patient is not
affordable=85but it is subsidizeable as President Bush acknowledged. I
applaud the fact that the multinationals have followed our lead and
continued to reduce prices in face of the generic competition=85as Glaxo
has done again today=85that is how a free trade marketplace should
operate=85but the multinationals must drop prices further if they are to
remain competitive. In fairness, we on the other side of the discussion,
should be aware that the multinationals, often with too little public
acknowledgement, do provide free medicines for certain life-threatening
African diseases.

Today I will focus on what I know best: the cost and denial of these
life prolonging, pain alleviating medicines to those who will die
without them.

I will not be drawn into the side debates over the alleged inadequate
health systems in some countries, or the issue of diversion, or an
endless discussion of tier pricing, or to question the motives of the
multinational companies and their executives, or to question whether
lower prices for these medicines will restrict their willingness to seek
a vaccine=85it has not restrained Merck=85or to discuss the morality of
allowing children to die in pain, or to dignify conversations that
contend "if Africans do not take these medicines properly, or stop
taking them, a mutation may take place and we in the West do not have
the medicines for that contingency."

There are real problems=85manned political barricades=85that prevent these
medicines from reaching the victims who need them. The problems to be
solved include financing, WTO stipulations and manipulations, and the
globalization treaties and bi-lateral agreements negotiated under
pressure that prevent generic competition, a campaign often led by the
United States Trade Office serving as the convenient kabuki mask for
some multinational pharmaceutical companies and for other western
nations who comprise the silent chorus. Those are the hard facts.

It is no secret that adequate financing is not currently available even
if we were to rely entirely upon generic production. Having said that,
for the first time I am seeing the rim of hope around the world as the
Global Fund monies are beginning to flow. I have witnessed creativity in
dealing with the problem from persons now motivated by this hope. If the
Global Fund carries out its commitment transparently, I believe this
should become a major focal point for financing. We do not have to
reinvent the wheel for each allocation of funds for AIDS. Countries can
earmark their funds for this illness if required or desired. Not a big deal=
.

There was a period of time recently, if truth be told, that the Global
Fund was closed to generics. Now that the policy is clear and generics
can be purchased nations like Malawi say they can treat twice as many
patients with the lower priced products. How can you argue with those
facts when financing is difficult to find?

President Bush's sincere commitment of substantial financing is now
being held hostage by narrow political interests. Candidly, the issue is
trapped in the political net of family planning and birth control=85what
some in Washington call "condom politics." Leading the fight to fulfill
the President's pledge is an outspoken conservative, Congressman Hyde.
To those who argue those "condom" concerns=85as is their right=85I ask them
to come with me to a hospices for children dying from AIDS=85I would like
them to hear and see for themselves a five year old holding the hand of
a nun and innocently asking if she can come on this journey to heaven
with him. And in my briefcase I have the single bottle of Nevimune=85often
provided without cost=85 that might have saved the child's life.

One of the reasons several of us have been meeting with the EC on a
monthly basis was to surface the problems we are discussing today,
helping the EC to prepare for the forthcoming G8 meeting. At the top of
that list should be financing.

("I have a dream" that Bush and Circa at the forthcoming G8 meeting=85like
Arafat and Rabin on the White House lawn=85 will reach across their
differences and President Circa would say: "President Bush, we of the G8
accept your pledge and we in the G8 will up it by one"=85thirty-two
billion can help to build the wall to contain AIDS. It is my
understanding that France will present this issue to the G8).

On one of these issues, I am beginning to have serious doubts=85as does
Merck=85about "tier pricing" a process easily turned into a monopoly as
happened in the Caribbean, a closed process we were able to abort at the
last minute in the Caribbean and in the Andes. Now we have reason to
believe there will be true price competition between the multinational
and generic companies.

Instead of focusing on "tiered pricing" let us discuss "tiered patents,"
patents issued on a national basis for a decade or even for half a
decade in the countries in need and for the countries that can produce
the medicines. These special patents would enable worldwide
accessibility to these medicines in those places where they constitute
the difference between life and death. Is this a pathway to preserve the
concept of patent rights and meet the moral obligation not to deny life
saving medicines to those in need? Is this a concept that can provide
grounds for compromise rather than conflict?

Make no mistake about it, I support patents to protect innovation, but
not as a devise to restrict competition. We do not believe in creating
monopolies in these special circumstances. Let the originators get their
just reward by way of suitable royalties. No one grudges this. Let us
open the door to obligatory licensing.

I have never been able to understand why companies that routinely
license their products in parts of the world where registration and
marketing do not warrant the expense, refuse to do the same with
products in the poor nations of the world that find themselves plagued
by raging epidemics? We on the other side of the issue need to
understand the fears of these companies that the platform of discovery
held aloft by patents is built on quicksand. People and nations of honor
and compassion should be able to find a compromise.

The second barrier to access is the political manipulations of the World
Trade Organization. Not the entire world is entranced by globalization=85a
concept I personally favor. We know the poorer nations of the world were
dragooned into accepting a twenty year pharmaceutical patent law=85one
more severe that we had in the United States at the time. These
restrictions are the harbinger for dramatically increased costs for
essential medicines in countries without adequate resources.

The protests of the poor nations were mollified by the escape hatch in
TRIPS. the so-called Paragraph 6=85a promise yet to used by nations in
need... that allowed them to set aside patent laws in cases of a
declared national health emergency. That promise was enhanced by a
United States pledge at Doha last year to increase the grace period=85due
to end in 2005=85 until 2016 for the "lesser developed nations"=85 a
Catch-Twenty-two definition developed in an obscure UN Committee that
politically excluded nations with populations over 75 million=85a
definition that excluded the very nations prepared to help
Africa=85nations such as India=85 until African nations can accumulate the
capital resources and the know-how to manufacture the raw materials for
AIDS medicines.

That pledge was immediately undercut by a secret clause inserted into
President Bush's "fast track" legislation that not only wiped out the
pledge but inserted stricter and narrower conditions that those already
in the law, something we call "TRIPS Plus."

You should know that Brazil and Cipla have offered to transfer
technology and know-how to manufacture AIDS medicines without cost to
third world countries and I am now personally engaged in this process.
What is required now is to confirm the granting of the grace period not
by voluntary actions but by enforcement of the TRIPS agreement and
extend that grace period to the producing nations, Brazil, China and India.

The situation was not enhanced by the recent WTO vote in Geneva=85the
notorious 143-1 vote=85the majority favoring broadly defining of the
escape hatch and the one vote opposing it. We now know that this
position was dictated at the highest levels of my government in what
would seem to an outsider as an upside down version of democracy=85and
certainly a vote that stands in stark contrast to the Bush commitment.
As you all know, that one vote won the day and now we must await another
go around the track in Cancun. This process brings to mind the picture
of a dog chasing its own tail.

My government needs to get its act together. What is national policy,
the pledge of Bush or the "behind-closed-doors" kabuki actions of the
Trade Office acting on behalf of the multinationals? When is the Trade
Office going to awake and learn that in the United States there is a
vital generic drug industry that needs to be heard?

Along the way those who participated in those Geneva discussions changed
what might have become the basis of a compromise into one that evoked
national sovereignty=85what formerly colonized nation is going to allow an
outsider to define a national health crisis?

While I blame my country=85the one vote=85 but in the background I hear the
chorus of certain western nations including many in the Common Market
represented here today to allow the United State to fight their battles
and let my nation take the heat.

This is not diplomacy but duplicity.

If the WTO does not escape from the grasp of special interests, one of
these days, the poor world is going to create a third world WTO with a
TRIPS North and a TRIPS South.

Time limits prevent me from citing chapter and verse but the bottom
line, the summation, is that we have talked and talked and talked for
years, silent to the screams of the 8,000 persons who die each day in
Africa.

What can we do?

For thirty years in the United States, generics were kept out of the
marketplace by politics. After a patent expired, we only gained two to
seven percent of the market resulting in the discovery by a New York
legislative committee that 160 essential drugs were off patent without
competition. Congressman Henry Waxman and then Congressman Al Gore began
the campaign to allow generic competition. In the final battle one man,
Senator Orin Hatch, a conservative Senator and often a spokesperson for
the brand name pharmaceutical companies, lured both sides into a room
without an exit and we settled the issue.

What was the common ground of that agreement? Predictability. That is
what is required for the generic industry to be competitive and it is a
word that underlines the needs, as I see them, of the multinationals.

So, I ask, where is that leader to lock the fifteen people=85yes, only
fifteen people=85 who can make the decision to provide affordable or
subsidizeable AIDS medicines into a discussion with no exit? Will that
leader attend the G8 meeting and demand an equitable solution? That
should be our focus here today.

You should know that generic manufacturers of affordable AIDS clones
often feel used. We are dangled before the multinationals as a threat,
with little or no attention focused on sustaining the competition, now
often humanitarian based. Stop using us as a threat. Give us a level
playing field and we will take it from there. We're big boys familiar
with the competitive marketplace. We also have the freedom to be
innovative as we have done in going beyond generics and creating the
triple ARV most in demand.

I fear most a universal problem=85I fear we may not have the active raw
materials=85the APIs=85 that create the medicines we need in the quantities
required even to meet the short term goals of the World Health
Organization, three to five million in treatment by 2006. At three
million, this represents only ten percent of the victims in sub-Sahara
Africa alone, leaving out the explosions of AIDS in other countries not
yet in our count. I suspect that this is a problem facing the
multinationals as well. Can they produce the raw materials required for
non-Western markets? Is this an arena for cooperation?

Candidly, neither the multinationals nor the generics alone can meet the
mounting demand for AIDS medicines without the help of each other.

In 2005, when TRIPS becomes a binding law and newer medicines are
subsequently discovered, we will be right back to where we were prior to
September, 2000 a world without generic competition.

(Let me use a personal analogy. My grandfather died of influenza after
World War One when my mother was a year old. Twenty million people died
worldwide, 500,000 in the United States. Do you think if we had
medicines that would have prolonged my grandfather's life, they would
have been denied to him? Do you believe they would have been locked in
warehouses while millions died? I doubt it).

Finally, in my country in the not too distant past we had a demi-god
emerge to challenge our system of right and wrong. He was destroyed by a
soft spoken country lawyer who used one phrase that hammered at the
conscience of a nation when he asked the demi-god in a nationally
televised Congressional hearing one question:

"Have you no shame?" he asked.

I ask those in the world community who have the power to decide the same
question:

"Have we no shame?"

Thank you for listening to an angry man who sees in the dying children
of the world, his own children and grandchildren and asks himself:

"Have we no shame."