[Pharm-policy] NGO letter against Ex-Im proposal (fwd)

[Robert Weissman]

Yesterday, the US Export-Import Bank announced a new initiative to make $1
billion in loans per year to African countries to purchase HIV/AIDS drugs.
Below follows a letter from the Health GAP coalition denouncing the new
plan.

Robert Weissman
Essential Information			|   Internet:	rob@essential.org


HEALTH GAP COALITION 
http://www.durban2000march.org
e-mail: healthgap@durban2000march.org

JULY 20, 2000

Dear President Clinton:


We are writing from the Health GAP coalition to express our strong
opposition to the just-announced initiative from the Export-Import Bank to
provide financing to African countries for AIDS drugs purchases.

Health GAP is a coalition of individuals and organizations, which works to
assure access to essential medicines by people with HIV/AIDS in the
developing world. We have played a leading role in persuading the U.S.
government to abandon its opposition to countries undertaking policies --
known as compulsory licensing and parallel importing --- that could
dramatically reduce the price of pharmaceuticals and which comport with
country obligations under the World Trade Organization's Trade-Related
Aspects of Intellectual Property (TRIPS) Agreement.

We believe today's announcement by the Ex-Im Bank represents a substantial
and unacceptable step backwards from the administration's commitment not
to interfere with TRIPS-compliant compulsory licensing and parallel
importing, mocks the administration and G-7's purported effort to provide
debt relief to developing countries, and runs directly counter to the
consensus at the just-completed world AIDS conference that the key to
addressing the AIDS epidemic lies in ensuring poor countries gain access
to medicines, not more debt.

The Ex-Im Bank proposal, coming on the heels of the XIII International
AIDS Conference in South Africa, is a striking example of past and current
policies clearly and forcefully repudiated by the public health, economic
and political leaders in Durban last week. Peter Piot, General Secretary
of UNAIDS, announced that the most important factor in increasing drug
access is competition between generic and patented drugs. He also cited
heavy debt burden as a crucial impediment to effective action against the
escalating African and Asian AIDS epidemics.

Additionally, the Durban conference brought together thousands of people
with AIDS and activists from all continents who have united around calls
for debt relief and full treatment access, including access to quality
generic medication.

We demand that the United States heed the growing consensus for policies
of economic aid based on public health imperatives and not the
profit-driven agenda of pharmaceutical corporations. We will not allow
retrograde proposals such as this to pass without widespread condemnation.

We are writing to urge you to take the necessary steps to cancel the Ex-Im
Bank initiative.

While there has been a laudable increase in US contributions to combat the
global AIDS epidemic, we agree that billions, rather than millions of
dollars a year are necessary to begin to significantly address this
challenge.

However, rather than offering spurious loans that perpetuate the debt
spiral, the United States must provide billions of dollars in grants for
comprehensive treatment access programs, based in sound public health and
scientific standards, including cost-effective bulk purchasing of generic
medication; TRIPS-compliant mechanisms for generic production or parallel
importation; and significant, structural-adjustment free debt relief. Such
grants must be administered and overseen by an international public health
organization, such as UNAIDS or WHO, not by a financial institution.

 We oppose the current initiative on three primary grounds.

1. A New Debt Burden for Africa

It makes no sense to burden African countries with loans, when existing
debt burdens are undermining their ability to prevent and treat HIV/AIDS
(and to address other diseases, and other critical needs) and when the
AIDS epidemic is itself already undermining their economic capacity. The
Ex-Im loans would be made at commercial rates, meaning the debt burden
would be very high.

The United States and the G-7, through their Cologne Initiative, are
supposedly seeking to relieve poor countries of their presently
unmanageable debt burdens.   If the intent of the initiative is to be
taken seriously, (despite inappropriate structural adjustment conditions
and an insufficient scale of debt relief), there is no plausible rationale
for piling new commercial-rate loans on poor countries at the same time
some of their debts are being forgiven.
,
2. Treatment Money Should Not Be Used for Corporate Welfare

All indications are that the Ex-Im loans will be used to buy drugs from
U.S. companies at a discounted rate similar to that which may be offered
to the United Nations.

Since money is clearly an enormous constraint in providing HIV/AIDS
medication, funding for HIV/AIDS treatment must be well spent, and only on
medicines at the lowest prices achievable. As reported, the industry offer
to the UN does not come close to meeting this standard.

Although there has been no distinct confirmation of the discount amounts
since the non-specific announcements from five pharmaceutical companies in
May, many published reports suggest the UN discounts will be in the 80-85
percent range. Such price levels, which we believe are far above
production and distribution costs, will enable the pharmaceutical
companies to continue to profiteer from drug sales, yet still keep
treatment unaffordable for the vast majority of people living with HIV.

Several well-researched studies, including a recent report from Medicins
Sans Frontiers (Doctors Without Borders), have shown that the cost of
HIV/AIDS medicines could decline an additional 90 percent from the
estimated drug industry discounts, so that the cost of combination
HIV/AIDS drug therapies would be on the order of $200 per person per year.

3. No U.S. Government Initiative Should Interfere with African Efforts to
Undertake Compulsory Licensing and Parallel Importing

Linking the U.S. financing to purchases of U.S. or Western brand-name
drugs appears to be a means to preempt efforts by African and other
developing nations to lower prices through compulsory licensing and
parallel importing.

As the New York Times reported yesterday, "It seems unlikely that Brazil,
India or other nations that produce such drugs for home consumption would
have the export financing available to help African nations buy the goods.
The American loans, along with a recent commitment by the World Bank to
provide at least $500 million to help African nations set up anti-AIDS
initiatives, give added incentive to African nations to treat many of
their AIDS cases with Western medicine."

Actually, the example of Brazil emphasizes the need for generic
competition. Through the use of generic production, Brazil has provided
combination anti-HIV treatments to over 90,000 people, and seen an over
50% drop in the AIDS death rate. The savings on hospitalizations and OI
treatment avoided were US$472 million from 1997 -1999, and net cost per
patient declined by 50% over the same period as savings were increasingly
realized and use of generics became more widespread.

We would have hoped that by now the administration had abandoned the
impulse to prioritize U.S. corporate commercial concerns over the public
health imperatives of the African HIV/AIDS crisis. Such hope appears to be
misplaced.

As best we can tell from initial reports, the Ex-Im initiative is a plan
to supply overpriced drugs to Africa while burdening African nations with
new debt. That may be good corporate welfare policy, but it is disastrous
public health policy.

We urge you to terminate the Ex-Im policy before it gets underway and
makes the HIV/AIDS crisis worse.

Sincerely,

Dr. Alan Berkman, Health GAP Coalition 
Julie Davids, Critical Path AIDS Project 
Asia Russell, ACT UP Philadelphia
Robert Weissman, Co-Director, Essential Action

Cc:
Al Gore, Vice President of the United States
James A. Harmon, President and Chairman of Export-Import Bank
Jackie M. Clegg, Vice Chair and Chief Operating Officer
William M. Daley, Ex Officio Board Member and former Secretary of Commerce
Charlene Barshefsky, U.S. Trade Representative
Members of the United States Senate
Members of the United States House of Representatives